Assets test is one of the requirements for Age Pension. This video explains what assets test is, how it works, and asset types with examples. Also, find out if your home is an asset, and how your super impacts the assets test.
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Numbers in the video are from June 2019. For the updated numbers please follow the link below to the article on our website.
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Age Pension Assets Test – EXPLAINED IN PLAIN ENGLISH!
The Age Pension Assets Test is an important component of the Age Pension system in Australia. It determines your eligibility for receiving the Age Pension and the amount you are entitled to based on your assets. In this article, we will break down the Assets Test in plain English, so you can better understand how it works.
The Assets Test takes into account the total value of your assets, including any property, investments, savings, vehicles, and household contents. However, not all assets are included in the assessment. Your family home, for example, is exempt and not considered as part of your assets. This is to ensure that retirees can maintain a place to live without affecting their pension entitlements.
The test sets upper limits on the value of assets that you can own and still receive the full Age Pension or a reduced amount. If your assets exceed these limits, your pension entitlements may be reduced or even eliminated entirely.
So, what are the current asset limits? For homeowners, the asset test limit is $268,000 for singles and $401,500 for couples. For non-homeowners, it is slightly higher at $482,500 for singles and $616,000 for couples. These limits are as of July 2021 and are subject to change each year.
Now let’s take a closer look at how the Assets Test affects your Age Pension payments. If your assets are below the relevant asset limit, you will receive the full Age Pension amount that you are eligible for based on other factors such as your income and personal circumstances.
If your assets exceed the limit, your pension entitlements will be reduced. For every $1,000 (or part thereof) that your assets exceed the limit, your pension will be reduced by $3 per fortnight for singles or $1.50 per fortnight for each member of a couple*. However, it’s important to note that your pension will not be reduced indefinitely. The maximum reduction is determined by a specific rate known as the taper rate. For every $1,000 above the asset limit, the taper rate reduces your pension by $78 per fortnight for singles or $39 per fortnight for each member of a couple*.
If your assets exceed the upper threshold, which is currently $583,000 for singles and $876,500 for couples, you will no longer be eligible for the Age Pension.
It is worth noting that the Assets Test is just one part of the Age Pension eligibility criteria. There is also an Income Test that takes into account your income from various sources, including employment, investments, and superannuation. The test that results in a lower pension payment (subject to Asset or Income Test) is the one that applies.
To ensure you are informed about your pension entitlements and understand how the Assets Test may impact your payments, it is advisable to consult with a financial advisor or contact the Department of Human Services.
In conclusion, the Age Pension Assets Test considers the value of your assets to determine your eligibility and payment amount. By understanding the test’s limits and rules, you can better plan for your retirement and make informed financial decisions.
Check out our AGE PENSION video/article: https://retireon.com.au/2019/age-pension-australia/
If I have a million dollars house and 900K loan, what's the asset value?
Very good
Very good
Thanks Sabrina, do you run a practise, what are your contact details ?
In other words. the Federal Government will screw us if we save.
If you don’t own a property but have 200000 in bank will it affect your pension if you live in old age home.?
WhT about disability support pension
If someone receiving age pension sell his home. From that time, how does the asset test change ? How much reduce his age pension?
While preparing for retirement, the wisest thing that should be on every wise individual's list is to invest in different stream of income; I am earning more this year because I have been investing while working at the same time. I invested through TERESA JENSEN WHITE, same woman that an anchor kept mentioning on CNBC, and made multiple of my start up capital within three months . She lives here in the USA and she is licensed
are u allowed to hide ur cash assets? Like lend ur money to some one so u can pass the assets test?
To general
How does inheritance affect your eligibility for the aged care pension?
Is any mortgage amount left on residential property deducted from assets test ?
The age pension is NOT a WELFARE payment NEVER was its YOUR age pension YOU paid for it! Superannuation is the governments gambling money that is replacing it!
They know how to screw you. After 35 years you still cant retire and live in another country, tied to Australia "Till death do yeh part". Surfdom, there are ppl here who worked all their lives and might want to return for health or family reasons, aree stuck because they no longer can make a living overseas. These phsycopaths in Parliament need to have a good look at themselves before passing such draconian laws.
Buy Gold before you retire, simple!
Does CES age pension payment in Assets test? or financial investment income ? CES age pension payment plus bank dividend & super pension annual income all including income test ?
According to the Human Services website, the lower assets threshold is $263,250 for a single homeowner and $473,750 if you don't own a home. For a couple combined, it indicates $394,500 and $605,000 respectively. Nevertheless, at least you explained the reduction rate of $3 per fortnight for every $1,000 over the threshold which seems to be rather elusive if not absent on the department's website.
Thank you.. most informative
thanks for your suggestion ! I hope to learn more good advice and information ^^
Very informative, I learned so much! Thanks Sabrina, you're a great help.