A quick guide to the new age pension rules

With the new Age Pension assets test having taken effect from 1 January 2017, it’s important to understand what impact the new rules could have on your retirement lifestyle.

With the new Age Pension assets test having taken effect from the beginning of this year, it’s important to understand what these changes could mean for your retirement income.

Your Age Pension is means tested using both an income and assets test, with the lower result being the age pension you are entitled to. As a result of the new upper and lower thresholds, your Age Pension entitlements may have gone up or down, or even been reduced to zero.

Therefore, if you rely on the Age Pension as your primary source of retirement income, any change to the amount you receive could have a major impact on your retirement lifestyle.


Which assets are assessed?

The Government takes most of your assets into account when calculating your Age Pension under the assets test, including superannuation (an exception applies if you’re under the Age Pension age), income streams, financial investments (such as shares, managed funds and savings accounts), investment properties, household contents, cars, boats and caravans.

While your family home is still exempt from the assets test, other property and items you or your partner own or have an interest in, including assets held outside Australia, can affect your payment. The value of your assets is what you would get for them if you sold them at market value.

For more information about the different types of assets assessed and how they are used to calculate your Age Pension entitlement, visit the Department of Human Services website.


How the new assets test works

The assets test uses an upper and lower threshold to work out whether you’re eligible to receive a full Age Pension, a part Age Pension, or none at all.1

Different thresholds are used, depending on whether you’re a single person or a couple, and whether or not you own your own home.

Here’s how the new thresholds work, if the total value of your assets is:

  • Less than or equal to the lower threshold amount, you may be eligible for the full Age Pension under the assets test
  • Between the lower threshold and upper threshold, you may be eligible for a part Age Pension under the assets test
  • Above the upper threshold amount, you’re not eligible for the Age Pension.


As a consequence of these changes, some people currently receiving a part Age Pension will have lost their entitlement from 1 January 2017.

If this has happened to you, the Government will automatically issue you with both a Health Care Card and the Commonwealth Seniors Health Card if you’re over the pension age.


The new assets test thresholds

Here are the new thresholds effective as of 20 September 2017.

Lower threshold Upper threshold
Single homeowner
$253,750 $552,000
Single non-homeowner
$456,750 $755,000
Couple homeowner
$380,500 $830,000
Couple non-homeowner $583,500 $1,033,000


Get help from an expert

When you’re relying on the Age Pension to fund your retirement, every dollar you receive from your entitlement has an impact on your standard of living.


And while you’re seeking to enjoy a comfortable retirement lifestyle, it can be tricky to know exactly how the new thresholds might affect your financial position.


That’s why it’s worth speaking to a financial adviser. By talking through your options and making any adjustments to your financial strategy to adapt to the new thresholds, your adviser can help to ensure you can still meet your retirement goals.