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Unlocking the Government Age Pension: Eligibility, Income, Asset Tests and Strategies!

Updated: May 6



In this blog post, we simplify the intricacies surrounding the government age pension in Australia. From understanding the age eligibility criteria to unraveling the complexities of the income and asset tests. Furthermore, we'll explore strategies for qualifying! All figures are from January 2024. These figures are continually indexing up with inflation each quarter.


Age Eligibility


Firstly, to qualify you need to be 67 years of age or older.


Residency Eligibility


To get Age Pension you generally need to have been an Australian resident for at least 10 years in total. For at least 5 of these years, there must be no break in your residence.


If you receive a foreign pension, this income often reduces the amount the Australian Government pays.


Income and Asset Test


When being assessed for your payment rate, Centrelink assesses you both on how many assets you have and the amount of income you are receiving (or being deemed to receive). From these two calculations, you then receive the lower of the two calculation amounts.


Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn.


Your income can be up to $204 per fortnight (singles) or $360 per fortnight (couples) before your Centrelink Age Pension Payment rate will begin to reduce. You may also be able to increase these thresholds with the Work Bonus.


The table below shows your Asset Test considerations (remember your Primary Residence is typically not included in this figure):


Strategies for Qualifying


Advisers have a range of strategies available to help you qualify for the Age Pension. However, Advisers will only consider this benefit if it outweighs any downsides of the strategy. For instance, renovating your home just to qualify for Age Pension could be a materially worse outcome even by receiving extra Age Pension payments, than the opportunity cost of what those funds would do if they remained invested within your superannuation account tax free.


Another common trap that individuals fall into is breaching the 'gifting' rules, therefore loosing money (and investment returns) with no benefit for 5 years.


To book in your obligation free appointment to discuss your options, click here.

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