Changes mean good news for pensioners

THERE’S good news for pensioners with the biggest increase in pension payments for many years.

The new rate charts are available on my website for free download, and the pension calculator on the website has been updated with the new rates. Feel free to go to www.noelwhittaker.com.au and work out for yourself how much more pension you may be entitled to.

There’s also been a slight increase in the cut-off points for the assets test. The cut-off point for a homeowner couple has gone from $915,500 to $935,000. For a single, the numbers have risen from $609,250 to $622,250.

This is not some extraordinary largesse from the government – it’s simply the normal six-monthly indexation adjustment to the rate of the pension due to inflation.

To qualify you must be of pensionable age. For people born between January 1, 1954, and June 30, 1955, pensionable age is 66; for people born between July 1, 1955, and December 31, 1956, it’s 66.5 years and for those born on or after January 1, 1957, it is 67.

If one partner is eligible, and the other is under pensionable age, the eligible partner receives half the couple’s pension. For example, a 67-year-old with a 59-yearold partner could qualify for 50 per cent of the couple’s pension.

You are tested under both an assets and an income test, and Centrelink applies the test that gives you the least pension. Consider a homeowner couple with assessable income of $1000 a fortnight and assessable assets of $740,000. Their pension under the income test would be $607.80 a fortnight each – under the assets test $292.30 Therefore, they would qualify for a pension of $292.30 a fortnight each. The family home is exempt – chattels such as furniture, and car are valued at second hand value, not replacement value. This puts a figure of $5000 on most people’s furniture.

The income test includes employment income, overseas pensions and rents received – financial assets are given a deemed income. They are deemed to be earning .25 per cent for the first $93,600 ($56,400 for singles), and 2.25 per cent on the balance. For example, if a couple had $493,600 of financial assets their deemed income would be $9234 a year being .25 per cent for the first $93,600 ($234) and 2.25 per cent on $400,000 ($9000).

An individual can earn up to $300 per fortnight from employment income. This amount is not included in the age pension income test.

The government has announced an increase in this amount. As a temporary measure introduced in September 2022, age pensioners will be able to earn an extra $4000 this financial year. They can now earn a maximum income of $11,800 before penalties kick in.

There are three common mistakes pensioners make. The first is not making the application for the pension soon enough. There are a few hoops to get through and, if you apply late, months can pass while hiccups are sorted out. The next is failing to apply for the pension because your partner has a job and earns income. A couple can earn $89,211 a year before losing eligibility for the pension so make sure you know the criteria. The last one is failing to notify Centrelink of changes in your circumstances.