Starting on Tuesday, older Australians will be able to own more assets and earn more income while still qualifying for the age pension.
The Federal Government announced changes to the upper and lower thresholds of the pension assets and income tests this month.
Let's recap the changes.
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New assets and income thresholds
The asset and income tests help determine your eligibility for a full or part payment, or no payment at all, once you reach 67 years of age.
The pension payment and the thresholds for the assets and income tests are indexed to inflation.
The Department of Social Services announced the next lot of indexation changes to the assets and income tests earlier this month.
Here are the details.
How much can you own and still get the pension?
The assets test incorporates ASX shares, international shares, bonds, investment properties, superannuation, and cash savings.
The value of your home is not included in the test.
If you do not own your home, you can own a higher value of assets and still get the pension.
Under the changes, single homeowners will be able to own $321,500 in assets, up from $314,000, and still qualify for the full pension.
If you own assets worth more than $321,500, you will qualify for a part pension if your assets do not exceed $704,500, up from $697,000.
Single non-homeowners will be able to own $579,500 in assets, up from $566,000, and still get the full pension payment.
If you own assets worth more than $579,500, you will qualify for a part pension if your assets do not exceed $962,500, up from $949,000.
Couple homeowners will be able to own $481,500 in assets, up from $470,000, and still qualify for the full pension.
If you own assets worth more than $481,500, you will qualify for a part payment if your assets are not worth more than $1,059,000. That's up from $1,047,500.
Couple non-homeowners will be able to own $739,500 in assets, up from $722,000, and still get the full payment.
If you own assets worth more than $739,500, you will qualify for a part pension as long as the value does not exceed $1,317,000. That's up from $1,299,500.
How much income can you earn and still get the pension?
Under the changes, single pensioners will be allowed to earn $218 per fortnight, up from $212, and still qualify for the full age pension.
If you earn more than $218 per fortnight, you will qualify for a part pension as long as your income does not exceed $2,516 (up from $2,510).
Couple pensioners will be able to earn $380 per fortnight, up from $372, and still qualify for the full payment.
If you earn more than $380 per fortnight, you will qualify for a part pension if your income does not exceed $3,844.40, up from $3,836.40.
How much is the payment?
The single pension, including all supplement payments, is $1,149 per fortnight.
The couples' pension, including supplements, is $866.10 per partner per fortnight.
How much does retirement cost?
The Australian Retirement Standard has just been updated.
A 'comfortable' retirement now costs $73,875 per annum for couples and $52,383 per annum for singles.
A 'modest' retirement costs $48,184 for couples and $33,386 for singles.
These numbers assume you own your home mortgage-free, receive a part pension, and are relatively healthy.
If you're curious as to the definitions of a 'comfortable' and 'modest' retirement, you can read about that here.
Retirement costs are different if you're renting your home.
A 'modest' retirement costs $64,259 per annum for couple renters and $46,663 per annum for single renters.
