Age Pension changes: will my pension reduce?

We clarify for Kay what the Age Pension asset threshold changes mean.

Age Pension changes: will my pension reduce

The changes to Age Pension asset thresholds that will take place from 1 January 2017 have Kay concerned that her Age Pension payment will reduce so we clarify what they actually mean.

Q. Kay

I am very confused about changes to the Age Pension for singles without superannuation. I have been on the Age Pension since 2005. Am I likely to have my pension reduced?

Can you also clarify the rental allowance for retirement villages?

The changes to the Age Pension asset thresholds and associated taper rate, which will happen on 1 January 2017, may result in a reduction to your Age Pension payment. However, if you are single, you would need to have assessable assets over $250,000 for your Age Pension to be reduced. In fact, if your assets are limited, you may even find that you will qualify for a full Age Pension, if you don't already. The asset threshold for a full Age Pension for singles is currently $205,500. This means that from 1 January 2017, you can have a considerable amount more before your Age Pension is reduced under the asset test.

In regards to rent allowance, you can receive this payment towards service and maintenance fees as long as you are paying more than the minimum eligible amount of rent.

You can view the current thresholds here.



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    30th May 2016
    So, effectively the new legislation is retrospective to existing part pensioners.
    Unfairly, the changes apply to existing part pensioners who elected to purchase a modest (appropriately sized) retirement home, or who elected not to invest in expensive existing home renovation but to hold assets over the assets test limit to cover future medical and aged care costs.
    In hindsight, these citizens were too naive to realise that the government would renege on the agreement into which they originally entered.
    30th May 2016
    And; what's the government's slogan for the forthcoming election? TRUST US! TRUST US!
    Sure, I'll trust them as far as I can throw them!
    30th May 2016
    For further clarification, go to this Website
    30th May 2016
    Spot on eckac. The Libs are a bunch of morons, and so are Labor - they won't restore the assets test, so they're just as bad.
    I'am voting for the Callithumpian Party, or anyone else as long as Labor and Libs don't get into power.
    That'll fix 'em.
    30th May 2016
    What if they next decide we should have paid land taxes and make those retrospective back till the purchase date of the property.

    Or declare something we all do illegal and fine us all retrospectively for it.

    I could go on but you get the idea.

    This retrospective thing should have had us in the streets rioting.

    Then again democracy died in NSW a fortnight ago and no one even mumbled about it so I suppose anything is fair game now.

    Interesting times. Don't lose your heads.
    5th Jun 2016
    Of course we can trust them, eckac.
    We can trust them to make our life more and more difficult.
    20th Sep 2016
    I love the heading on this Item !! :-) My Pension Reduces on Every Pension Adjustment lately ! :-(
    30th May 2016
    When I learned of this decision, through a letter from CentreLink, on 23/12/15, I spent 2-3 months trying to get the correct story from Centrelink officers and members of parliament. No many of these people were helpful at all. This has been a very shady move by the LNP and the Greens to cheat seniors yet again. I suggest that members of parliament lose 22% of their salaries, just like I did. We'd soon hear some squealing then!
    30th May 2016
    Regardless how mad or how dangerous the extreme right is they'll be getting my vote.
    The targeting of all those who have worked hard and received very little from both Labor or Liberal and when all those who have finally retired are discriminated against is the biggest criminal offence, while billions are flooding out of this country in foreign aid and all those so called refugees are living on the gravy train that both Labor, Greens and bleeding hearts support.
    The world is in a crisis and at this point in time I do not give a damn, it will give us the opportunity to hunt down the criminal dogs.
    30th May 2016
    Have been waiting with a sledgehammer to pay back the Libs for what they have done to our retirement plans over this broken promise with the hope that Labor would honor their commitment to overturn or adjust the rules . Now that has been lost as well.
    Message out of all this is not to make too many long term plans with your Super as you really have no control over it. Bet the polies didn't change they own Super entitlements !!
    30th May 2016
    I have read many of the comments on super threshold changes with great interest and I really wonder what the big fuss is about the proposed changes. Firstly , I wonder just how many individuals and couples are currently at or above the current threshold. My husband and I aged 72 and 76 are Self Funded retirees are now just under the current threshold and in view of the proposed changes, we have elected not to apply for what will be a small part pension. We have no need to. We have a very comfortable life style which includes regular holidays inside Australia and overseas , visits to the theatre and dining out. We qualify for a Commonwealth Seniors Health card which gives us pharmacy at the same price as a pensioner and we do get the winter concessions. Any self funded retiree who is not eligible for a pension at this stage certainly ought to be able to afford to pay rates and car registration. It seems to me that some folk are just being greedy.
    30th May 2016
    Or perhaps you are making wild assumptions with no research and no facts to back up your claims, patmax??

    Some retirees have assets that are not returning income (or very little income) and that are difficult if not impossible to sell in the current economic climate. That leaves them in dire straights. Others have medical needs or disabilities that imply high costs. (The CSHC doesn't cover non-PBS-listed medicines. I know folk who face costs of $300+ a month for essential medications!) Some sick or disabled retirees need costly home help or personal care. Some have homes that need very expensive maintenance or repairs.

    To assume ''greed'' is insulting and offensive and totally unjustified - quite nasty, in fact.

    The bottom line is that the changes were grossly unfair and made without proper research or consideration. They put retirees in the position of paying a huge penalty for having been responsible and frugal - losing 156% or more of the income they earn on their savings and forced to either live on - in many cases - half the aged pension, or drain their savings prematurely, compromising their ability to meet needs in later life. (Wouldn't taxpayers scream if taxed at 156%? Yet that's effectively what this stupid assets test does!)

    It is NOT greed to expect to benefit from having sacrificed lifestyle during your working life in order to enjoy a better lifestyle in retirement.
    5th Jun 2016
    You are being very unfair, patmax.
    There are many of us getting paltry returns on our super funds and the part pension we get helps a bit - even then we don't get near the equivalent of a full pension and are dissaving all the time even though we live carefully. My wife and I are really worried as to what will happen from next January.
    30th May 2016
    Patmax, r u bragging.....
    30th May 2016
    Its not a matter of being 'greedy" it is the issue of your hard earned savings being at the behest of short term thinking and planning politicians. No one is after more than they are entitled to ( we will leave that to the welfare dependent ) All we ask for is some form of consistency. On current form ,one would have to be somewhat naive to think this will be the last "adjustment" to be made.
    31st May 2016
    You are right Bakka, as the ratio of worker to retiree gets worse the Adjustments will become more frequent and the howl from those that are welfare dependent will grow louder.
    30th May 2016
    I have just been through this with centerlink, what is not mentioned in the article is the CL uses both the Asset Test and deeming and whichever takes the most money off you is the one they use.
    What also is not mentioned is the asset test free section is rising to $300,000. according to my maths if if you have less than approx $395k your better off, and above that worse off.
    When interest rates rise if they don't get you with the asset test they will get you with deeming.
    30th May 2016

    You may be slightly incorrect

    The Jan 2017 Asset Test Free areas(Lower Threshold) are as follows
    $250k for a Single Home Owner
    $375k for a Home Owner Couple
    $450k for a Single Non Home Owner
    $575k for a Non Home Owner Couple
    There is no specific $300k Figure

    In reference to your $395k Asset Figure -I have used $400k in the following example which will apply as from 1 Jan 2017
    A Single Home Owner will receive an annual pension of $11,021, down from $15,135
    A Single Non Home Owner will receive $18,687 No Change
    A Couple Home Owner will receive $32,302 , and INCREASE of $2300
    A Couple Non Home Owner will receive $32,093 No Change
    30th May 2016
    You expect interest rates to rise sometime this century?

    You are a true optimist.
    Not Senile Yet!
    30th May 2016
    The money that paid for all the retirees Assets was paid for with Income that had already been your mortgage etc!
    It's a bit rich to Not be grandfathering this change!
    It's a bit rich that they are penalising those that worked hard...paid their taxes...and built everything that everyone now enjoys but did Not pay for!
    So how many Retirees are actually prepared to Vote for any lieing Part Puppet or the Greens????
    Come on over 55' not vote any of the Party Puppets back in!
    Vote for an Independant.....and put the Party Puppets LAST!
    30th May 2016
    Unfortunately too many people between the ages of 55 to 65 and currently retired don't understand or realize the adverse impact the reduction of the asset threshold on 01/01/2017 will bring.

    It is estimated that 330,000 will be affected immediately on 01/01/2017, not the 90,000 that the Libs and Greens implied and as the asset threshold is frozen for 4 years, another 250,00 as a mimimum will also be affected.

    What of those who sold their homes in order to go into Aged Care and had to pay enormous bonds to be admitted? In some cases they will end up with more than the asset threshold and as a consequence will lose their pension or have a reduced pension. I know of 1 case where a 91 year old will lose the pension entirely!

    Don't know if the bond amount is also classed as an asset?

    Any asset changes should have been grandfathered.

    This current government have surely ruined the retirement plans of many retirees who spent years preparing and planning for their retirement.
    31st May 2016
    Sad isn't it? It all falls on deaf ears. Decisions have already been made. Rotters will have blood on their hands and no one will forgive them.
    5th Jun 2016
    Yeas, I certainly will not vote for coalition or Greens, Not Senile Yet!

    They have treated us appallingly. It shows they not only not give a stuff about making life much more difficult for a not well off section of the community, but use us to help fund tax reductions to high income earners, businesses. It's incredible, even from this mob. And

    Labor is doing the rotten thing too by saying they won't rescind the changes.

    So they won't get my vote either.

    There is a problem with our Life Choice web site - most of us recognise the difficulties ( a few don't) and we white to each other about it, but the message doesn't go through to the present parliamentarians and to all the candidates in both houses in the upcoming elections. It would be good if Life Choices organised something where we could stay our views as well as petitions and have them sent on to all those I just mentioned throughout the country. It needs to be done s soon as possible.
    31st May 2016
    Hi Rae

    What was it that I wrote in a post that made you think this? ( If it was directed at me?

    You expect interest rates to rise sometime this century?

    You are a true optimist
    31st May 2016
    No Rodent it was a reply to Graeme Who said " when interest rates rise".

    I was being cynical. Quite possiby the Americans might squeeze a little inflation out of the system and be able to raise rates after September without crashing the share market. It won't be easy.

    We have interest rates going down and no prospect of rises any time soon.

    100 year bonds are selling for under 4% so what does that tell you the market expects to happen. This is a historical first.
    There is almost 200 trillion dollars of debt world wide.

    It is just so ridiculous that when anyone suggests normal cycles coming back into play I just can't help making a cynical comment.

    It was not directed at you nor at Graeme in any disrespect.
    31st May 2016
    Patmax, I'm glad that you and your partner have a comfortable lifestyle in retirement BUT MILLIONS OF AUSTRALIANS DO NOT. This was a very poor decision of the LNP Federal Govt. I've fought against it, but I didn't make any progress. My only way to get even is to vote against the buggers who made the decision. And any other conservative leaning MPs.
    1st Jun 2016

    Understand and thanks for the clarity
    1st Jun 2016
    The same old people whingeing! Oh dear! Some people are never thankful for small mercies like these refugees in disguise in Europe.
    Pensions are NOT for the well offs and good on ya if you have been fortunate enough to have made it because most women have not and consequently, homelessness is increasing rapidly for older women.
    It is not their faults but usually due to the old male fogies who form the so called 'old boys' club' who prevent women from obtaining equal pay and deserved promotions and view women as nothing more than inferior sexual doormats who merely exist to cook, clean and breed for them. No wonder there is increasing domestic violence and rapes and deaths from male partners! It is absolutely shocking and then when I see these whingeing complaints, it makes me very annoyed.
    It is better to vote for anyone or any party that is not Labour, Liberal nor Greens as long as they do not give preferences to any of the 2 major parties. However, as a swinging voter all my life, I am still undecided but will not vote for the Socialist parties of Labour and the greens. Australian Liberty Alliance is capturing my interest presently as are the independents, Nick Zenophon and Jacqui Lambie.
    Liberals would be the better choice for our economy but a country cannot run on welfare either like Labour and all Lefties seem to think that money grows on trees. That is why the carbon tax was invented otherwise scientists have known for a very long time that climate changes occur throughout history as a result of the activitie of solar flares on the sun's surface with its resulting electromagnetic rays reaching the earth.
    Generally, I think that the assets test is fair and equitable although the Rent Allowance is ludicrously small and not reflecting the true nature of the huge rent hikes as a result of property price increases and resulting shortages of housing.
    This needs urgent attention!
    Foreign aid as Dot mentioned HAS DECREASED but so should any defence aid overseas in Syria as it is having little or no effect for obvious reasons.
    1st Jun 2016
    Hi Mez

    Your Post is interesting, can I assume you are a Non Home owner? because you talk about CRA ie Rent Assistance. I don't disagree that it needs a review.

    As someone who has been banging away on the "Pension subject" for a while, I don't agree with your comments about the Changes to the Assets Test being EITHER Fair or Equitable. I know better

    I recently posted this, you might care to reflect on it and draw you own conclusions from the data.

    Dear Barak

    I recent posted this information.
    I would be interested in you reading the following and then advising What do you consider Lesser Financial Circumstances?

    Dear Beyond Caring, and others. I and many others have written on this forum many times about the utter stupidity and inequities and unfairness of the Proposed Pension changes due 1 Jan 2017

    In relation to your $450k Asset figure this is what will apply

    A Single Home Owner will LOSE $6064 in annual pension, at the same Asset figure Single Non Home Owner ,and Couple Home Owners and a Couple Non Home Owners Annual Pension will not change.

    HOWEVER it become crazy as you have higher Asset Figures
    Eg at $550k a Single Home owner loses $9280 in annual Pension, a Single Non Home Owner only loses $175 in Annual Pension. At the same $550k figure a Couple Home Owner loses $3568 in Annual Pension. A Couple Non Home Owners Pension does NOT change.

    At $650k in Assets a Single Home Owner receives NIL pension, and a Single Non Homeowner Loses $4075 in Annual Pension. A Couple Non Homeowner Loses $7468 in Annual Pension and beyond belief a Couple Non Homeowner gets a small Increase in Annual Pension of $2321

    At $750k in Assets both the Single Home Owner, and Non Homeowner receive NIL Pension, The Couple Home Owner loses $11,368 in Annual Pension , and more beyond belief at the SAME $750K Asset figure the Couple Non Home Owner loses ONLY $1579 in Annual Pension

    I have all this information in $25k Asset Figures in a large Spreadsheet, but cannot post that here, so apologies for format. If anything is unclear just ask
    2nd Jun 2016
    Rodent - Interesting article if true and obviously the whole scheme is a complex issue to make it fair to all.
    I am unsure as to whether a dwelt in by the owner home has any limits set on the price of their property before part of it becomes assessable as an asst but if not, I think that it is reasonable that it should especially when many older homes have more than 2 bedrooms and so on.
    It is unreasonable to have unused bedrooms when many are better off selling and downsizing.
    It is being plain sensible in a time when many are homeless.
    Memories are memories and when sad and lonely it is better to move on in a selfless manner, I would think without being harsh???
    2nd Jun 2016
    Dear Mez

    all the Information and data I presented about the Assets Test/Age Pension is unfortunately very TRUE
    1st Jun 2016
    Hi Mez.

    Not a bad effort for someone who does not like" whingers"
    1st Jun 2016
    Ha ha!
    I guess I was bordering on the whingeing side. ????
    5th Jun 2016
    There is a problem with our Life Choice web site - most of us recognise the difficulties ( a few don't) and we whinge to each other about it, but the message doesn't go through to the present parliamentarians and to all the candidates in both houses in the upcoming elections. It would be good if Life Choices organised something where we could state our views as well as petitions and have them sent on to all those I just mentioned throughout the country. It needs to be done s soon as possible.
    5th Jun 2016
    Very good idea as well as being a very positive move!????
    10th Jun 2016
    I believe that is time to reconsider our voting decisions, the article below explain some liberal Brocken promises and the Labor party jumping to try to resolve the issue but at the end of the day both parties have a big problem with us pensioners.
    No matter if you are in Australia, Overseas or the Moon you will be affected big time in your supper and any other investments you may have and reductions all over in entitlements times and money so is time to reflect on who are we going to vote for and remember we are a good 10% ++ voting power.
    10th Jun 2016
    I can't believe the labor parties election slogan " a better life for all Australians " yet at the same time come 1st January, 2017 many thousands of pensioners are going to be faced with big reductions in their pension. The threshold will be reduced by $300,000 legislated by the LIberal Party under former prime minister Tony Abbott.and agreed to by both the Labor party and the Greens. As a result of this all the major parties can forget about getting my vote at the next election. But I guess this won't bother them to much unless a lot of other pensioners do the same and don't vote for them.

    10th Jun 2016
    yes mate certainly they do not get my vote maybe liberal democrats ???? I do not want to waste my vote but is so bloody hard to decide they are all a bunch of DH's

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