Age pension increase is just days away for many seniors

Centrelink’s age pension means testing will change on July 1 and deliver more cash to hundreds of thousands of retirees.

Changes to the age pension asset test will deliver many retirees more money from this weekend, prompting a warning for seniors to check if they are missing out.

Some people’s pensions will rise by more than $100 a fortnight, while others will become eligible for a part pension for the first time from July 1.

Retirees already receiving a full age pension will be unaffected – their payments rise in March and September, but about one-third of Australia’s 2.6 million pensioners receive a part pension and stand to benefit.

The changes reflect the rising cost of living, and high inflation over the past year means some asset test thresholds are increasing by 7.8 per cent.

Centaur Financial managing director Hugh Robertson said people who received an asset tested part age pension would benefit.

“For example, a couple who owns their home and has $500,000 in assessable assets will see their age pension go up from $680.50 per fortnight to $729.25 per fortnight, a $48 increase,” he said.

“By far the biggest winner is the non-homeowner single person. As an example if they had assessable assets of $724,500 their benefit will go up $117.75 per fortnight, from $404 to $521.75.

“This will help many people meet the rising costs of living we are all experiencing. It also helps those who are self-funded retirees – with the increase in the asset test cut-out limit, they may now qualify.”

Jumping for joy: any age pension rise is a welcome move. Picture: iStock

Now was the time for retirees to investigate their eligibility, “especially given the volatility in share markets and property markets”, Mr Robertson said.

“There is still great pride in being self-funded for many people, but entitlements available to you like a Seniors Card and Commonwealth Seniors Health Card can help offset some of the rising costs retirees face,” he said.

Currently an age pension starts to reduce when a homeowner couple’s assets eclipse $419,000, but this lower limit rises to $451,500 from July 1. For a single homeowner the threshold rises from $280,000 to $301,750, while non-homeowners have higher limits.

Later Life Advice founder Brendan Ryan said while full-rate pensioners would see no difference, part pensioners could see increased payments, some would become full-rate pensioners, and other who had missed out previously might now qualify.

“The maximum amount of assets for a couple who own their home is getting close to $1 million – a couple with up to $954,000 in assessable assets could apply for a part pension,” he said.

“While they still have to satisfy the income test – they can qualify for a small age pension and get a whole lot of benefit by having a pensioner concession card.”

Mr Ryan said July deeming rate changes might also help retirees, and seniors should stay vigilant and ensure they were up to date with Centrelink.

“Make sure you know how changes in your situation or the rules around your entitlements could impact you – especially if you are close to thresholds,” he said.

“It’s worth checking to make sure Centrelink has the correct data on your assets. If your assets have reduced in value – or you have spent savings – you may be eligible for a higher age pension.”

Mr Robertson said the certainty of income from an age pension could help to alleviate stress.

“There are strategies that can be implemented to help get under the asset test cut-out limit which could mean you qualify for age pension, or if already qualified, could maximise your age pension benefits, which may mean drawing down less of your own money, he said.

Mr Robertson said people should check MyGov to ensure their asset values were correct.

“We see many people have overstated values of things like cars, furniture, and other home contents,” he said.

“It’s not necessarily the insured value but the current market value to be recorded for asset test purposes.”

Originally published as Age pension increase is just days away for many seniors