What assets are included in Age Pension Assets Test.
Understanding how the Assets Test work and what assets are included, how to maximise the Age Pension benefit can be a difference between a comfortable retirement with good level of income OR struggling financially.
In this video I will explain all little details about Assets Test and why it is so important if you want to improve you Age Pension payments.
I will go over all types of assets that are included in Assets Test and answer questions that I often get about treatment of different assets.
I will cover the following:
00:36 Assets Test problem
01:48 Basics of Assets Test
02:57 Origin of Assets Test problem
05:38 Current Assets Test limits
06:48 What assets are included in Assets Test?
06:54 Personal Effects
07:41 Financial Assets
07:44 Superannuation
08:31 Income Streams
08:53 Annuities
09:31 Other assets
10:15 Real Estate
12:53 Retirement Village
13:21 Gifting
13:54 Assets You Control
14:54 Business Assets
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Katherine Isbrandt of About Retirement
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Email: katherine@aboutretirement.com.au
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Age Pension Assets Test – THE TRUTH REVEALED!
Australia has a comprehensive social security system designed to provide financial support to older Australians who have reached retirement age and do not have enough income to sustain themselves. One of the key components of this system is the Age Pension, a regular payment made by the government to eligible individuals. However, in order to determine eligibility and payment amounts, the government uses an Assets Test. There have been many misconceptions and misunderstandings surrounding this test, so it’s time to unveil the truth about the Age Pension Assets Test!
First and foremost, let’s understand what the Assets Test actually entails. The Assets Test examines the value of an individual’s assets to determine how much pension they are eligible for. Assets can include real estate, investments, superannuation, and other valuable possessions. The test aims to ensure that those who have accumulated significant wealth over their lifetime and have sufficient assets to support their retirement do not receive the same level of government support as those who are less fortunate.
Contrary to popular belief, the Age Pension Assets Test is not a means to confiscate or punish individuals for having assets. Its purpose is to distribute limited resources fairly and effectively within the social security system. The government aims to strike a balance between providing adequate support to those in need and ensuring that the system remains sustainable in the long run.
To debunk some common misconceptions, let’s address a few points:
1. The Assets Test does not disregard the value of the family home: There is a “homeowner exemption” meaning that the value of the primary residence is not included as an asset under the test. This ensures that retirees can maintain their primary residence and have a secure place to live.
2. The Asset Test thresholds are adjusted regularly: The government understands that the cost of living and the value of assets can change over time. Therefore, the thresholds are adjusted periodically to reflect this. This ensures that the test remains fair and up to date with the economic climate.
3. The Assets Test applies to assets over a certain threshold: The government acknowledges that individuals may need some assets to maintain their standard of living, and only assets above a certain threshold are taken into account. This means that retirees can still have some assets while receiving the Age Pension.
It is important to note that the Age Pension Assets Test is just one part of the eligibility criteria for receiving the Age Pension. Other factors, including income, residency, and age, also play a role.
In conclusion, the Age Pension Assets Test is a vital component of Australia’s social security system, aiming to distribute resources equitably and sustainably. However, it’s crucial to understand that the test does not seek to punish or confiscate assets, but rather ensure that government support is directed towards those most in need. The government regularly reviews and adjusts the Assets Test thresholds to reflect changing economic circumstances, providing retirees with a fair and realistic assessment of their eligibility for the Age Pension.
Hi Katherine, thanks for your great videos which I’ve been watching with a lit of interest. I have a question about Centrelink Curtilage and the asset test. We have a conservation property which we live on. Our house is on a 5 acre section of the property. The remaining 95 acres are listed by LANDGATE the Govt Conservation Department as conserved land for wildlife and we are not allowed, by a covenant on the Property Interest Report over the entire 100 acres, to do anything with the land. We cannot touch the land in anyway, We live there for the quiet and privacy only. We are not farmers. We cannot cut a tree down, nor touch any bushes, wetlands, waterways nor any part of the 100 acres. The Government has stipulated that Nothing is allowed to be done with the land and it is there solely for conservation of the bird life and fauna. Therefore, our question is as the Government has stipulated it is unusable land, would the remaining 95 acres be included as an asset in relation to obtaining our pensions? If so, we will sell it and move before we apply for the aged pension. Looking forward to your reply. Thank you!!
Hi Katherine, It is possible to convert term deposits or Goal Saver Accounts in bank plus Superannuation into a partial asset investment property , that is buying 50 to 60% of the house of my eldest daughter located in Victoria due to constant travel from our house in NSW to help another daughter in looking after their newborn daughters, in the mean time we are helping our eldest daughter to go out of the mortgage. I think we need to register the stamp duty and our names in the title. The house in Victoria cost around 500K and our primary house in NSW continue to be the primary home.
I have lived in Australia for the last 10 years. I am now 78 years old. I live in my own apartment. I purchased it for A$720/- I have 30,000/- as saving in my bank account. What comes under the Assets Test? Thank You.
Can you explain the rules of pension receiving it abroad? One can retire anywhere in the world and receive full pension or there are some deductions, etc…
I am interested in how Retirement village entry contributions effect pensions. Please fo a video on this. Thank you
WHAT A LOT OF HASSLE, SOMETIMES I WONDER IF IT'S WORTH APPLYING AGE PENSION, I AM ABOUT TO TURN 67 NEXT YEAR I LOST INTEST OF APPLYING AGE PENSION. MY LATE DAD WHEN HE RETIRED IN THE PHILIPPINES, THERE WAS NO ASSET TEST OR ETC, HE USED TO WORK IN THE GOVERNMENT CONTRIBUTED SUPER AND WHEN HE RETIRED THERE WAS NO WORRIES ABOUT THIS ASSET TEST LIKE CENTRELINK, HE RECEIVED HIS PENSION EVERY FORTH NIGHT, WHEN I THINK OF FOR THE AGE PENSION I AM WORRIED IF I CAN ANSWERS IT RIGHT I AM ON MY OWN I DON'T KNOW WHO WILL HELP ME, I WORK FOR 37 YRS AND STILL WORKING. SORRY ABOUT MY COMMITMENTS .
Your videos are very informative, can I make a lump sum contribution to my wife's super she is 62 and I am 68 and about to retire (03/07/23) from work. Would this be considered gifting? are there limits? thank you Katherine.
I am in a retirement village where I lease the unit I live in. Centerlink classes me as a Home owner and consequently receive a lower deduction for assets. Unfair. Anything I can do about it?
Hi Catherine, great videos I wonder if my house and land in the Philippines is included in asset test? Do centre link know??
Hi Katherine thanks for your advice, I’ve started the transfer over to Age Pension, but with my Unisuper and savings in bank, I’m just a little over, I haven’t finished the online claim, I’m taking your advice, to legally pay a few bills,
How can your basic hlusehold goods are included in yoir asset test? So the shell of the house you live in exempt from your asset test.
Hi Katherine, I'm 74 and have now just applied for a Pension. I have a BT fund from which I draw the minimum allowed per year.
Since December 2015, I have not made any contributions to this fund.
I vaguely remember this policy was grandfathered Dec 2015 and that the income was tax-exempt and ALSO did not count towards pension.
Do you know if this is correct? Also, the funds are with BT can I move them,
Roland
How are assets held in a discretionary trust treated?
My question is about deeming. I still work part time and recieve the same job pay each fortnight. I dont understand deeming at all. I was told I had units for my super and that these were used by centrlink to determine the amount I'm paid each fortnight. I asked my super to explain to my how many units I have but they tolme none as I have no suuper insurance. So I don't get it.??
Your presentation has been a great help, thank you. In my situation my wife and I have been estranged for over 10 years and she lives in the family home and I pay the rates, while l house sit for friends or rent a granny flat on a friends property. How do I explain this to CentreLink ? and is there provisions for people like me ? Thanks again
The Australian pension is very stressful for us older people. It seems like we are prisoners. We paid into the pension when we were working so every pension aged person if they had PAID into this tax , should have a full pension without being mean tested. But it seems those who had paid little or none at all , get the full pension , council housing, extra payments….this unfairness only happens in Australia.
Hi Katherine, A couple of years ago I placed our overseas-based son's inheritance ($40,000) from his grandfather in a separate account in my bank, but in my name. I assume that Centrelink treated the money as part of my assets, with a commensurate reduction in our part-pensions. I have since transferred the money to him and I am wondering if I need to inform Centrelink of our "asset reduction" or is their monitoring of our bank accounts sufficient for an automatic re-assessment?
Hi Katherine. Thank you for for informative Videos. Can you please explain how assets such as cash in a joint bank account with my wife is calculated. Will it be calculated on the full amount or half? I will be eligible for the pension before my wife. Thanks!!
Hi Katherine. I'm really enjoying your videos. Can you tell me why you should get advice prior to talking to Centrelink? Won't they give you the information you need? Also, if you do need advice outside of Centrelink, where is the best place to get it? Thanks so much again.
We need to get rid of the myth that the family home is not included as an asset. The family home, regardless of its real worth, is assessed at $214500. The difference in assets allowed between "home owners" and 'non-home owners'. If this is not clear enough that the family home is an asset with an arbitrary value, , I don't know what is.