What is the difference between the income and assets test?

Marjie is currently assessed under the income test and wants to know if that can change.

What is the difference between the income and assets test?

Marjie is currently assessed under the income test and wants to know what she needs to do to be assessed under the assets test.

•••

Q. Marjie
Can you please explain what is considered income for Aged Pension purposes for a couple? We are currently assessed under income rather than assets (which are around $385k). We do not work, but we receive around $15,000 per annum in super pensions and I receive $4000 per annum from a UK pension. I just need to understand when it would change to the asset test. We are only a few dollars under full pension, but it is frustrating trying to work it out. Previously, I was assessed incorrectly and had to repay $1400 because Centrelink forgot to include my partner's super pension (I was retired, and he was working) so I am trying to ensure they don't make such errors in the future. Any help in this area would be much appreciated.

A. Your Age Pension eligibility is calculated by applying both the income and assets tests, with the resulting lower payment determining under which rules you are paid. If, under either of the calculations, the resulting payment is $0, then you will not receive an Age Pension.

Currently, the income threshold for a couple’s Age Pension is $79,736.80. This includes income from investments, property rental or as a salary from employment, as well as several other means.

The assets test, like the income test, has two thresholds and is split into two categories. The full Age Pension is received when a lower assets test threshold is not exceeded. The threshold for non-home owner couples is $594,500. The lower threshold is for home-owning couples, and is set at $387,500.

Once the lower thresholds are exceeded a person or couple's entitlement to the Age Pension is reduced by $3 a fortnight for every $1000 their assets exceed that threshold. No Age Pension is received once an upper threshold is exceeded. The upper threshold for non-homeowner couples is $1,027,000. For couple homeowners, the upper threshold is $848,000.

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    fearlessfly
    19th Apr 2019
    11:13am
    What deranged Australian dipshit devised these bloody rules ?? Why can't the fools scrap all this crap system and just use the NZ system where everyone eligible gets the pension and there's no such thing as asset tests and income tests ? I'm on a part Australian Age Pension plus a part NZ Age Pension plus my own modest Allocated Pension. My wife is on Newstart. Every fortnight the amount of money we receive bounces around like a donkey's dick, we never know what we get paid until we log in to the bank and check the amounts. Absolute Monty Python farce of a system, should apply these rules to Politician's Pensions !
    sunnyOz
    19th Apr 2019
    3:11pm
    fearlessfly - I know EXACTLY what you mean! I am single, on Aged Pension, and was doing a casual job 2/3 days a week 12 months ago. BUT - I gave the job up because like you, the amount that ended up hitting my bank account was simply like picking an amount from a barrel. Even my accountant could not reconcile it, and that is an area she specialises in.

    Even using the CL calculators, the amounts never made sense. And CL do NOT have to give you a breakdown. Why are we supposed to let them know fortnightly our income, when I was told (upon querying) - that it was annualised out? Is this why there are so many Rob- Debt problems?

    Yes - I would like to have some work part time - but NOT if I am going to be constantly stressed about what my fortnightly pay will be, and when they will hit me (in years to come) - because they made a mistake. There is NO encouragement to work, and the Work Bonus is a total joke! If I hear one more politician boast how we can earn $150 a week (for a single) before the pension is cut - I will throw something at them! Because if you do earn that - you are then taxed on both your pension, and your income! Some incentive! God forbid if you go over that $150 - reduced pension, and tax - makes it not worth working.
    Rae
    19th Apr 2019
    5:37pm
    The only reason they would do that is to fudge unemployment figures. They don't want retirees earning extra money. They want them poor and under the thumb.
    Cheezil61
    20th Apr 2019
    12:55pm
    Well said Fearless Fly! What a screwed up, confusing system, no doubt designed to avoid paying recipients, be they elligible or in elligible-TOTALLY UNFAIR!! So glad i don't need to undergo their bullshit rules just yet! Hope it's been simplified by the time I'm 60!!
    GeorgeM
    24th Apr 2019
    11:50am
    Absolutely correct, fearlessfly!
    Old Man
    19th Apr 2019
    11:55am
    Well, fearlessfly, there is a number of ways around all of this. Lobby your local member to change the rules, get yourself elected to work the change from the inside or go to NZ which has all you want it seems.
    fearlessfly
    19th Apr 2019
    12:26pm
    Yes, predictable reply!
    Rae
    19th Apr 2019
    5:40pm
    Someone will. The system now is stupid and no other country does these silly things that discourages working. Even the US has a universal aged pension based on working life income and taxes paid.
    Cowboy Jim
    20th Apr 2019
    9:46am
    It is not only NZ where a universal pension applies. Most civilised countries have that. What the difference here is: all those freebies and reductions with a pension card. In my old place your pension payments are rather good but you have to have private health insurance by law. No council rebates and no rental allowance and no bulk billing. Your pension payment is added to all your other income and then you pay tax on everything. A great incentive for achievers. Here we are encouraged to spend a lot to achieve the freebies. Not a good example for the next generation
    Sundays
    19th Apr 2019
    11:56am
    Yes, and when you add in the Work Bonus, the different rates for singles, couples where only one member is a pensioner, those separated due to illness and various Granfathered rules, the whole mess is an administrative nightmare.
    Thoughtful
    19th Apr 2019
    1:08pm
    It most certainly is. I have honestly never heard a compelling argument for staying with this system. The one-off amount of work required to change it and the associated taxation laws would surely be worth the effort.
    in2sunset
    19th Apr 2019
    2:59pm
    Agree Sunday - and then you will get hit in a few years time with a Robo-Debt. I have NO confidence in the current system. I went to a CL seminar recently and this is was told the following - (was on a web site they pointed out) -

    Pension­ers must advise the Department of Human Services of any changes of $2000 or more in their financial assets – if they add this amount to their bank account, they will need to advise the new balance. Similarly, they need to advise the department of any changes of $1000 or more to their combined assessable assets – that is, non-financial assets. This includes (but not limited to) the value of goods, cars, boats, furniture, real estate (including real estate in other countries), personal property, interest in any property, trust or company, and any other right or interest in any other asset (including assets in other countries). If a pensioner reduces their financial assets by a large amount without buying an asset, the department may ask for details and some form of supporting documentation.

    This is just ludicrous! So if you sold your big guzzler 4WD for $25,000 and bought a cheaper car for $18,000 (or for that fact - $23,999) - you are supposed to let Centrelink know. It's hard enough to get them on the phone anyway! My brother recently sold his towing car and caravan (practically no other assets, and rents). A complete waste of time going back and forwards to CL. The money he did get - sat in the bank for a few weeks till he found the car he wanted. And notice they say - 'if you add this to your bank'. What happens if you need to TAKE OUT more than $1000 - notify them again?

    Totally stupid, and if anything, all these stupid rules are stopping seniors from working in casual jobs.
    Sundays
    19th Apr 2019
    6:46pm
    Yes, you do but it can be done online using MyGov. I know Centrelink also do data matching with Super funds, banks and the ATO. Big brother is everywhere. Keeping people busy by being busy. Total waste
    Cowboy Jim
    20th Apr 2019
    9:07am
    Them's the rules, in2sunset! Had to go thru that as well last year, traded in a 1992 car for a new one, take $16'000 out of bank and informed C/Link, assets unchanged since the car was new but from now on the asset diminishes (car getting older).
    While fixing up the paperwork at the dealership a bloke came in with $20'000 in cash wanting to buy a new car. Dealer told him that it cannot be done without filling in a few forms (where does the money come from etc). Bloke left but somehow I am sure he will get his car from someone. As Sundays mentioned: big brother is everywhere!
    fairdry
    19th Apr 2019
    1:34pm
    Ihttps://www.dva.gov.au/factsheet-is164-service-and-social-security-age-pension-ready-reckoner-singles
    This web site will give you a table guide for your pension entitlements for assets or income and as mentioned above the government will always pay the lesser amount. It covers singles & couples home owners and non-home owners. It is an easier way to monitor the way you may receive income instead relying on centrelink.
    fairdry
    19th Apr 2019
    1:38pm
    Oh, this is the couples web site
    https://www.dva.gov.au/factsheet-is165-service-and-social-security-age-pension-ready-reckoner-couples
    Romeital
    19th Apr 2019
    1:52pm
    Well done fearlessfly this is the best comment I have read on this forum and dead right
    Just as well we have some of you New Zealanders in Australia to put the Aussies straight
    Paddington
    19th Apr 2019
    6:17pm
    So you can have $900,000 in assets apart from the family home or earn just under$80,000 and receive enough pension to get the benefits, have I understood that correctly? I guess that could be a combination as well for some people.
    SFRs could manage that surely? Why are so many on here complaining?
    For those who are unhappy with their situation maybe they need to look at rearranging their affairs because that is a lot to play with.
    Homeless or nearly homeless oldies have nothing.
    Full pensioners in their own home are also more fortunate than the ones with no home.
    Paddington
    19th Apr 2019
    7:25pm
    And the single pensioners without a home are the poorest!
    Rae
    20th Apr 2019
    7:25am
    I'm eligible fr a part pension and benefits but have chosen to remain independent. It will be interesting to see how many walk through Centrelink doors if Labor are elected. I imagine there are many like meh app to not claim if not needed but beginning to capitulate on that sort of community service. Seems in a lot of cases it's how much can I get for free with people these days. They aren't even trying to provide for themselves.
    Cowboy Jim
    20th Apr 2019
    12:54pm
    @Rae - I decided during the Rudd administration that it would be a waste of time to go independent without the health card. Shorten will ensure the decision would become very easy for the future C/Link customers. Aussies are not idiots, only treated as such.
    johnp
    19th Apr 2019
    7:13pm
    Agree with fearlessfly. Bring in universal aged pension then just pay tax same as workforce does. Simple, straightforward and fair !!
    Paddington
    19th Apr 2019
    7:50pm
    How will this help the poorest people? It still sounds like it benefits people with assets and some cash but what about those who have nothing? So many elderly singles are becoming homeless. I am not against it but homelessness would still be an issue for some.
    johnp
    19th Apr 2019
    8:33pm
    agree paddington, but that is another issue as aged pensioners without assets will still receive the full aged pension without tax
    Paddington
    19th Apr 2019
    9:24pm
    Single pensioners often cannot afford the rent which is why they are in danger of becoming homeless and the largest group now becoming homeless.
    Rae
    20th Apr 2019
    7:31am
    Homelessness is another issue that needs mental health help and to be cared for with others taking responsibility for the person in need and unable to cope.

    I've wondered why motel style buildings with a shared dining room and recreation room and a caretaker couple can't be provided. Either unviable motels could be bought or new builds.

    It isn't that hard surely to care for those unable to care for themselves.

    The current rules make saving over decades unviable for many. It's a stupid idea to discourage people from saving for themselves by punishing them for doing so.
    Cowboy Jim
    20th Apr 2019
    8:18am
    Your idea, Rae, has merit. Alas, it has been tried here without many uptakes. The people I know do not like the behaviour rules like home by 10 pm, no alcohol, no smoking in bed and generally quiet during the night. People are on the pension and they tell me they want to spend their money on the pokies, ciggies and booze and prefer to live in their old cars, running or not.
    Quite a few have mental issues which could be addressed with medications if they lived in your suggested accommodation. It is legal in this country to live like a tramp - 50 years ago it was not. No visible means of support you were hauled in by the authorities. Loony bins were closed subsequently and the inmates set free as it was too expensive to house them. Now we have the problems, and solving them is a must sooner or later.
    Cowboy Jim
    20th Apr 2019
    8:36am
    What I still cannot comprehend is the difference between home owner and renter. We home owners sacrificed a lot to get the place in the first instance and not every renter is poor and some just never wanted to own a home. Also we home owners save the Govt a lot of dosh in rent assistance. A lot of owner myself included are living in affordable units which are worth about $250'000. The difference in asset testing is about $205'000. But only the big estates are mentioned in Melbourne and Sydney as if every home owner lived in one of those.
    No wonder retirees are up-sizing their residence before pension age - a sure way to leave your money to your children. Bought a place in Melbourne in 1978 for $42'500. Last June it was sold for $1'060'000. Should have kept it, that would have been worth the difference of $205'000 in being a home owner.
    Rae
    20th Apr 2019
    4:48pm
    Yes the rules and beliefs are not very clever here now. Too much fussing around. Paying everyone the same and taxing savings would be the sensible solution if we want to encourage saving. Right now that upgrading makes the most sense if holding wealth is the main aim. You can still get the full pension and concessions. Any other type of saving then forget it. You are punished for that saving. Makes no sense.
    GrayComputing
    24th Apr 2019
    2:32pm
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.
    johnp
    24th Apr 2019
    2:47pm
    Agree with GrayComputing 100 %
    Farside
    24th Apr 2019
    8:40pm
    I can see it now ... copy, paste, rolling on floor laughing ... you're such a comedian. But you could be right – s universal pension could be a sensible policy but don't hold your breath. And the age pension is welfare no matter how often you claim to the contrary.


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