The age pension will increase, as will the upper limits of the assets and income tests for a part pension in retirement, on 20 March.
The Department of Social Services has just announced the next round of indexation changes.
Social security payments, such as the age pension, are indexed twice per year to keep up with inflation.
Let's take a look at the new rates.
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Here's how much the age pension will increase on 20 March
Single age pensioners will receive an extra $4.20 per fortnight, and couples will receive an extra $3.20 per person per fortnight under indexation changes to the base age pension.
This will raise the single age pension base rate to $1,051.30 per fortnight.
Single age pensioners who are also eligible for the supplement payment and the energy supplement will receive $1,149 per fortnight.
The couples' age pension base rate will rise to $792.50 per partner per fortnight.
Couples that are eligible for the supplements will receive $866.10 per partner per fortnight.
Australians become eligible for the age pension when they reach 'retirement age'. That's 67 years for people born on or after 1 January 1957.
To be eligible for the pension, you're not allowed to earn or own too much in retirement.
This is where the age pension assets and income tests apply.
As part of the indexation changes, the value limits on income and assets for a part pension have also risen.
How much can you own in retirement and still get the pension?
The age pension assets test incorporates ASX shares, international shares, bonds, investment properties, superannuation, and cash in savings accounts.
The value of your home is not included in the assets test. If you do not own your home, you are allowed to own more in assets and still get a full or part age pension.
According to Super Guide, the value limits to receive a full age pension will not change on 20 March. They will remain in place until 30 June.
However, the value limits to receive a part pension will slightly increase.
Currently, single homeowners can own $314,000 in assets and still qualify for the full age pension. Single non-homeowners can own $566,000 in assets.
Couple homeowners can own $470,000 in assets outside their home and still qualify for the full age pension. Couple non-homeowners can own $722,000 in assets.
Here's what's changing on 20 March.
Previously, single homeowners whose assets were worth more than $314,000 but less than $695,500 were eligible for a part pension. That upper limit will now increase to $697,000.
Previously, single non-homeowners whose assets were worth more than $566,000 but less than $947,500 were also eligible for a part pension. That upper limit will now rise to $949,000.
Previously, couple homeowners whose assets were worth in excess of $470,000 but less than $1,045,500 were eligible for a part pension. That upper limit will rise to $1,047,500 on 20 March.
Previously, couple non-homeowners whose assets were worth more than $722,000 but less than $1,297,500 were also eligible for a part pension. That upper limit will now increase to $1,299,500.
How much can you earn and still get an age pension?
Australians in retirement also need to clear an income test to qualify for a full or part age pension.
Once again, Super Guide reports that the income limits to receive a full age pension will not change on 20 March. The current limits will stay as they are until 30 June.
However, the income limits to receive a part pension will go up on 20 March.
Currently, single pensioners are allowed to earn $212 per fortnight, and couples can earn $372 combined per fortnight and still qualify for the full age pension.
For a part age pension, the new cut-off income point for single people in retirement will rise by $9.20 per fortnight to $2,510 per fortnight.
This means single pensioners earning more than $212 but less than $2,510 per fortnight will qualify for a part pension.
For couples, the new cut-off income point will rise by $14 per fortnight to $3,836.40 combined per fortnight.
This means couples earning more than $372 but less than $3,836.40 per fortnight will qualify for a part pension.
