Don't forget: Asset test changes on 1 Jan 2017 for Age Pensioners

From 1 January 2017, over 90,000 part-pensioners may lose their Age Pension and over 230,000 part-pensioners’ payments will be reduced.

However, some pensioners may also receive an increase in Age or Disability Pension. It’s important that you understand how the changes could affect you. From 1 January 2017, some people will benefit and others will be worse off.

Change to the Assets Test threshold

The Assets Test threshold is the amount of assets pensioners can hold before their pension starts to reduce under the Centrelink Assets Test. The table below shows the new thresholds from 1 January 2017.


changes to asset test

Change to the ‘taper rate’

The taper rate is the rate at which the Age Pension reduces as assets increase. From 2017 the taper rate will increase from $1.50 per fortnight to $3 per fortnight. This means the maximum Age Pension a pensioner can receive will be reduced by $3 per fortnight for every $1,000 of assets they hold above the Assets Test threshold.

How the changes could affect your Age Pension

The higher Assets Test thresholds will generally mean:

  • Age Pension recipients with an asset value ‘around’ the thresholds are likely to see an increase in their Age Pension entitlement, and
  • Age Pension recipients with assets above the threshold are likely to see a reduction in their Age Pension (in some cases to zero) as a result of the increased taper rate.


Retired couple Betty and John are both 68 years old and own their home. They have $823,000 in total assets and currently receive a part Age Pension of $500 per fortnight. If their assets remain unchanged on 1 January 2017, their Age Pension is estimated to reduce to zero. If their assets either increase or decrease, the new rules could still impact their pension and the likely impact to Betty and John’s Age Pension entitlements at various asset levels is explored in chart 1.

Chart 1[1] – The effect of a couple homeowner’s Age Pension as at 1 January 2017

[1] Based on information released by the Government and can be found at -
The chart also assumes all assets are financial assets subject to deeming.

Do you receive a health care card if your pension is cut?

Those who lose their Age Pension should automatically be issued with the Commonwealth Seniors Health Card. The Commonwealth Seniors Health Card is available to those who have reached Age Pension age and it gives you discounts on prescription medicines through the Pharmaceutical Benefits Scheme (PBS). You may also be entitled to other concessions in areas such as health and transport, depending on your State or Territory.

How about the family home?

The Government has kept its commitment to continue to exclude the family home from the assets test.

Is there anything I can do to reduce the impact of future changes?

Reducing your assessable assets between now and 1 July 2017 may help to alleviate the impact of the future changes to the asset test however it is important that this is considered in light of your entire situation and overall goals and objectives.

Options that may be considered include:

  • Gifting within the allowable limits
  • Purchasing a funeral bond within the allowable limits
  • Purchasing a long term or lifetime annuity may assist in reducing assets over a period of time
  • Superannuation fund contributions on behalf of a spouse who is below age pension age
  • Bringing forward capital expenditure such as holidays and home renovations


The changes will leave pensioners with lower levels of assets better off in many cases,  however those with higher levels of assets may be worse off, or lose their pension as a result of the asset test changes.

Make an appointment

We will be discussing the impact of the changes based on your specific circumstances at your next review meeting if you have opted in to an annual review. The changes to the Age Pension can affect pensioners in a number of ways. To find out more about the likely impact of these changes on your entitlements and to explore strategies to help reduce the impact, please make an appointment to see us.