Centrelink Pension Asset Test changes from 1 January 2017
Essentially the Assets test “taper-rate” will increase from $1.50 per $1,000 to $3 per $1,000 of excess assets over the initial threshold. This means the reduction in the maximum Age Pension due to excess assets will increase. While the initial thresholds are increasing, the increased taper-rate will lower the cut-off levels for the Age Pension. So, while some pensioners may gain an increase in payments many others (as much as 91,300) may find that the no longer receive any Age Pension because of the changes. 
Initial and Cut-off assets test thresholds from 1 January 2017
The Department of Social Services has now released the actual thresholds that will apply from 1 January 2017, and the cut-off are lower than originally estimated. The following tables show the assets test thresholds that apply from 1 January 2017 as well as the current assets test thresholds.
ASSETS TEST THRESHOLDS: 1 JANUARY 2017
| SINGLES | ||||
| Current Initial asset threshold | New Initial asset threshold | New Cut-off asset threshold (actual) | Cut-off asset threshold (current) | |
| Homeowner | $ 209,000 | $ 250,000 | $ 542,500 | $ 793,750 |
| Non-homeowner | $ 360,500 | $ 450,000 | $ 742,500 | $ 945,250 |
| COUPLES | ||||
| Current Initial asset threshold | New Initial asset threshold | New Cut-off asset threshold (actual) | Cut-off asset threshold(current) | |
| Homeowner | $ 296,500 | $375,000 | $816,000 | $1,178,500 |
| Non-homeowner | $ 448,000 | $575,000 | $1,016,000 | $1,330,000 |
NB: homeowner figures excludes family home value.
As you can see, for a homeowner couple the cut-off threshold for the Assets Test is around $362,500 lower under the new rules.
NB: Concession cards issued when pensions cancel
The Government estimates that approximately 91,300 pensioners will have their pensions cancelled on 1 January 2017, due to the assets test changes. Centrelink have advised that impacted clients should receive a letter in October 2016 advising them of the likely impact. Centrelink have subsequently confirmed that:
- All pensioners will be automatically issued with a Health Care Card, and
- Pensioners over age pension age will also be issued with a Commonwealth Seniors Health Card (as well).
This means pensioners over age pension age whose pensions are cancelled on 1 January 2017 due to the assets test changes, will automatically receive two concession cards that are not income tested. This is important as there are several state-based concessions that are available to holders of a Health Care Card that are not available to holders of the Commonwealth Seniors Health Card. For example, in Victoria, holders of a health care card are eligible for an annual electricity concession of 17.5% off electricity bills. This concession would not be available if the client only held a Commonwealth Seniors Health Card.
If you think that this will impact you and you need advice to increase income from other sources please do not hesitate to contact your adviser, either Tom Weir or Rodney Johnstone on 9629-1433.
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