Government Update: Changes to pension payments and rules

We keep you up to date with retirement income changes and updates.

Government Update: Changes to pension payments and rules

Part of YourLifeChoices’ mission is to keep you up to date with retirement income changes and updates. From changes to deeming rates and pension rules, to increases in the Age Pension, the new income and assets test limits and the lowdown on downsizing legislation – we’ve got you covered.

Age Pension
From 20 March 2018, 4.7 million pension and allowance recipients received increases to their payments to help them keep up with rises in living costs. The base rate Age Pension for singles rose $12.20 to $826.20 per fortnight, and by $13.20 to $907.60 per fortnight including the pension supplement ($67.30, a $1 increase) and the energy supplement (static at $14.10).

The base rate for each member of a couple rose by $9.20 to $622.80 per fortnight and by $9.90 to $684.10 per fortnight including the supplement (a 70 cent increase) and the energy supplement (static at $10.60).

Income test limits
The new income thresholds are:

  • $1983.20 per fortnight for singles (up ($26.40)
  • $3036 per couple per fortnight (up $39.60).

Assets test limits
The new thresholds are:

  • single homeowner $556,500 (up $4500)
  • single non-homeowner $759,500 (up $4500)
  • homeowner couple $837,000 (up $7000)
  • non-homeowner couple $1,040,000 (up $7000).

Newstart
The income test cut-offs for the Newstart allowance for those aged 60 and over are:

  • $1139.17 for singles (up $12.67)
  • $963.50 each for couples (up $10.50).

Changes to Age Pension rules
From 1 July, to receive an Age Pension or Disability Support Pension, a person will need:

  • 10 continuous years of Australian residence, including at least five years during their Australian working life, or
  • 10 continuous years of Australian residence and proof they have not received activity-tested income support for cumulative periods of five years or more, or
  • 15 years of continuous Australian residence.
  • Residence during a person’s working life is the number of years he or she has lived permanently in Australia between the age of 16 and Age Pension age.

Existing exemptions to the residence requirements for Age Pension and DSP will stay the same.

Downsizing legislation
From 1 July, people aged 65 and over will be able to make a non-concessional (post-tax) contribution into their superannuation of up to $300,000 from the proceeds of selling their home.

The existing voluntary contribution rules for people aged 65 and older (work test for 65 to 74-year-olds, no contributions for those aged 75 and over) and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under this new special downsizing cap.

This measure will apply to a principal place of residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home.

Deeming rates
If you own financial investments and receive the Age Pension, or hope to claim the Age Pension, be aware that deeming rates are set to change on 1 July. The income you earn from your investments is generally not what is counted for the Age Pension income test, rather Centrelink deems your financial investments to earn a certain rate of income on those assets.

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    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 the 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 financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    indi
    22nd Apr 2018
    9:33am
    Be aware when downsizing if you have sold and awaiting for the property you wish to buy into, the moneys you bank is not counted against your pension but the interest is. That will reduce your pension for the period of waiting @ 3.5% the deposit you have paid for the property is counted as asset further reducing your pension.
    maelcolium
    22nd Apr 2018
    10:37am
    It's worse than that as it's not the earned interest, but the deeming rate which is applied to determine your theoretical Centrelink calculated income level.
    McDaddy
    22nd Apr 2018
    3:29pm
    If you get 2.5% on the money while you are waiting to buy, you'll make back more than you lose in Pension.As of 1/7/18 you may be able to get into Super too, probably make more money, happy days.
    Marian
    22nd Apr 2018
    3:22pm
    From Family Marchlewski to the gestapo minister Keenan & the gangrene Centrelink we is life in spain only on one single age Pension the Criminals from the minister office Human Services & centrelink is from 2010 fabricate all send documents by ours family & Spain Governments we is family whit very severe Disability from Governments Crime & the rotten criminals centrelink as Lee Mackay & the fascist hank office others all is in U.S & Interpol P.M. new
    GrayComputing
    22nd Apr 2018
    3:40pm
    Why do we still tolerate this broken and far better called insane pension scheme?
    We deserve so much better.
    Call your MP or MP staff and read out the below in a very load voice

    Dear PM MPs and senators

    It is time for the government (and for all of us to rant at them) to take action for human decency and a huge stress reduction for pensioners

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

    For the retired and retiring people in your electorate do you think they really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

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

    As an MP do you really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    As a MP you even stand to lose your chance at being part of the government unless all these criminal asset tests for a pension are dropped now.

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    McDaddy
    22nd Apr 2018
    6:07pm
    NZ 65 years and over: 15.25% (male 318,089/female 369,849) (2017 est.)
    Aus 3.7 million people (15% of Australia’s total projected population of 24.3 million) are older Australians. Expected to grow to 22% or 8.7million by 2050.
    Universal age pensions

    Universal "age" pensions The following 15 countries have such pensions:
    Bolivia ,Botswana, Brunei, Darussalam, Cook Islands, Guyana Kiribati, Kosovo, Mauritius, Namibia, Netherlands,New Zealand Samoa, Suriname,Timor-Leste & Seychelles.

    Hardly economic powerhouses, the rest have means tested Pensions. Use some of your own money to fund your retirement.
    libsareliars
    23rd Apr 2018
    2:55pm
    Well said!


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