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Major Changes to Age Pension from July 1
Starting July 1, significant alterations to the age pension in Australia will impact millions, as income and asset thresholds increase by 2.4%. Although the actual payment rates remain unchanged, these adjustments will allow more individuals to qualify for benefits or receive higher payments.
Eligibility and Income Tests
To receive the age pension from Centrelink, individuals must be 67 years or older and pass both an income and asset test. The upcoming changes will provide increased earning potential and asset holding limits without affecting eligibility. This means many Australians might qualify for the pension for the first time due to relaxed criteria.
Currently, the age pension stands at $1,149 per fortnight for singles and $1,732.20 for couples, inclusive of supplements. These payment rates typically adjust semi-annually, in March and September.
Approximately 2.6 million Australians benefit from the age pension, which also qualifies recipients for the Pensioner Concession Card. This card grants access to reduced medicine costs, bulk-billed medical services, and various government benefits.
Updated Income Thresholds
The new income limits that determine eligibility will rise as follows:
- Singles can now earn up to $218 per fortnight, a rise from $212, without their pension being affected. Payments decrement by 50 cents for every dollar earned over this amount until reaching a cut-off threshold of $2,516 per fortnight.
- Couples can earn up to $380 per fortnight, up from $372, with a cut-off limit of $3,844.40 per fortnight.
Income encompasses earnings from employment as well as returns from financial assets like superannuation and savings. The Work Bonus allows pensioners to earn up to $300 in employment income fortnightly without impacting their pension.
Asset Threshold Adjustments
Limit adjustments for asset holdings effective from July 1 include:
- Single homeowners may now hold assets valued up to $321,500, increased from $314,000, while couples can have $481,500, up from $470,000.
- The cut-off for receiving a part pension will increase to $704,500 for singles (up from $697,000) and $1,059,000 for couples (up from $1,047,500).
- For single non-homeowners, the threshold will rise to $579,500, and for couples, it will be $739,500.
Changes to Deeming Rates
Effective from July 1, there will also be adjustments to deeming thresholds:
- The lower limit for singles will be $64,200, an increase from $62,600. For couples, it will rise to $106,200 from $103,800.
- Amounts below this lower threshold are assumed to earn an interest rate of 0.25%, while any amount above it is assessed at 2.25%.
This alteration allows a larger portion of income to qualify for assessment at the lower rate, potentially leading to slightly higher payments for some individuals.
Conclusion
These upcoming changes to the age pension system represent a significant improvement for many Australians, particularly amidst rising living costs. The adjustments not only increase the income and asset limits but also aim to provide greater financial support to those in need. For more details about eligibility, pension thresholds, and other related queries, you can visit the Services Australia website for comprehensive information.
