Age pension rise for 2.6m seniors carries some extra benefits

Wednesday’s pension windfall is more than just a payment rise – some retirees will benefit from changes to assets and income tests.

Seniors will see another solid rise in pensions and other benefits. Picture: iStock

An increase in the age pension from Wednesday will deliver seniors more than just extra cash.

The indexation of pensions and several government payments also brings a lift in means testing thresholds and other limits, meaning people can own or earn more and still qualify for some benefits – or perhaps get a pension for the first time.

However, some seniors are not getting everything they are entitled to, according to financial specialists, so it is vital to check.

The September 20 indexation of pension rates and limits means a single full pensioner will receive a $32.70 fortnightly increase to $1096.70, while each member of a couple gets a maximum $826.70, up $24.70 each.

A single homeowner can now hold assets worth $667,500 and still get some pension, an increase of $11,000. The threshold for couple homeowners has climbed to $1.003 million combined, up $16,500, while asset thresholds for non-homeowners are higher still.

Later Life Advice founder Brendan Ryan said high inflation had increased pensions and thresholds more than usual, potentially making more people eligible for payments and the “whole suite” of extra benefits and discounts that came with a pension.

“If you are only eligible for a small amount of age pension - you will still be eligible for a pensioner concession card,” he said.

“The current asset limit for a couple is now over $1m – not that long ago it was $860,000. You can have $1m of assets and still be eligible for a smidgen of pension.”

Thresholds for the popular Commonwealth Seniors Health Card, which delivers cheap medicines and often other government and council benefits, also are climbing. This card is not asset tested and its income threshold on Wednesday rises $5400 to $95,400 annually for a single, and by $8640 to $152,640 for a couple combined.

Almost 50,000 people have signed up for a CSHC in the past year, according to Department of Social Services data, with cardholder numbers increasing from 450,000 to 499,000. In late 2019 fewer than 387,000 people held the card.

Mr Ryan said the key message for pensioners was “be on your game, and stay on your game” to avoid missing out on benefits.

UniSuper advice technical and strategy lead Brooke Logan said some opportunities might be passing people by, so it was important to check with a qualified adviser, Services Australia, super funds and or seniors’ organisations.

“It’s been a really hard few years for many retirees, with inflation running hot,” she said.

“Even some retirees with relatively large balances have found the uncertainty difficult. So this will make not just a financial difference to them, but also help to provide some peace of mind that there’s some help with expenses like medical care and medication.”

Ms Logan said some seniors had assets just exceeding allowable pension thresholds.

“Indexation of these cut-off thresholds in some instances by as little as $10,000 may be enough for some people’s assets to fall within the allowable limit and now receive a partial benefit – and they may not be aware,” she said.

• The Deal/Barron’s list of the 2023 Top 100 Financial Advisers will be published in The Australian on Thursday and will also be available online.

Originally published as Age pension rise for 2.6m seniors carries some extra benefits