The Australian government has announced that the age pension and eligibility criteria for part pensions will be updated, effective 20 March. This adjustment includes an increase in the base age pension rate as well as an upward revision of the income and asset limits for those eligible for a part pension.
How Much Will the Age Pension Increase?
Starting 20 March, single age pensioners will receive an extra $4.20 per fortnight, increasing the base rate to $1,051.30 per fortnight. Couples will receive an additional $3.20 per person per fortnight, raising their base rate to $792.50 per partner per fortnight.
For those eligible for the supplement payment and the energy supplement, the total payment will increase. Single pensioners will now receive $1,149 per fortnight, while couples eligible for these supplements will receive $866.10 per partner per fortnight.
Eligibility and Asset Test Changes
As part of the indexation changes, the asset limits for a part pension will rise slightly. Single homeowners who have assets greater than $314,000 but less than $695,500 will now be able to qualify for a part pension up to an upper asset limit of $697,000. Non-homeowners will see their asset limit increase from $947,500 to $949,000.
Couple homeowners, whose assets exceed $470,000 but fall below $1,045,500, will now be eligible for a part pension up to $1,047,500 in assets. Similarly, couple non-homeowners will be able to own assets worth up to $1,299,500, a rise from the previous limit of $1,297,500.
It’s important to note that the value of the home is not included in the asset test. Additionally, for non-homeowners, the allowable asset limits are higher, which offers some financial flexibility.
Income Test Changes
Australians in retirement must meet income limits to qualify for the full or part age pension. For a full age pension, the income limits will remain unchanged until 30 June. However, for those qualifying for a part pension, the income limits will increase starting 20 March.
Single pensioners will now be able to earn up to $2,510 per fortnight, an increase of $9.20 from the previous limit of $2,500. For couples, the new combined income cap to qualify for a part pension will rise to $3,836.40 per fortnight from $3,822.
Single pensioners earning more than $212 but less than $2,510 per fortnight will now be eligible for a part pension, while couples with a combined income of more than $372 but less than $3,836.40 will also qualify for a part pension.
Impact on Pensioners
These changes are designed to support pensioners as they navigate the rising cost of living. The age pension asset and income thresholds have been adjusted to ensure that those on the age pension or receiving a part pension are better equipped to manage their financial situation in retirement.
The increases in both the age pension base rate and the asset/income limits for part pensions will benefit thousands of Australians in retirement.
While the full age pension eligibility criteria will remain the same until 30 June, the changes for part pension eligibility open up greater opportunities for those whose assets and income levels are close to the eligibility cut-offs.
