What is included in the Age Pension income test? How does your super affect the Age Pension? The thresholds for the full Age Pension change in July, while thresholds for the part Age Pension change in March and September. Calculating adjusted income and threshold income. The market value of any assets you or your partner own will be assessed by the Centrelink to determine your potential eligibility for the Age Pension. Transitional pensions rates are paid to people who would otherwise be getting a lower payment after changes to the income test were introduced in 2009. Centrelink will then reassess your correct Age Pension entitlement. ... How the Age Pension assets and income tests work together. Published: 01.04.2020 Categories: News & Information, Latest news. “The Government’s priority right now must focus on health matters. Copyright for this article belongs to SuperGuide Pty Ltd, and cannot be reproduced without express and specific consent. However, from Monday 6 April the income threshold will be increased to £200,000, meaning anyone who earns under this amount will not be affected by the tapered annual allowance. Currently those earning above a certain income have the amount they can save into a pension reduced on a tapering scale. That meant for every £2 of adjusted income above £150,000 a year in 2019/20, where the threshold income of £110,000 was also breached, £1 of the annual pension allowance was lost. The Department of Social Services announced that there would be no changes to the Age Pension rates due to the CPI going down due to COVID-19 and it is expected that there is no change to means test thresholds for the same reason. Grab the latest deals, guides, tips 'n' tricks directly from Martin and the MSE team. To be eligible for either a full or part pension, there are limits on the value of the assets you (and your partner combined) can own. Be aware that if you’re currently residing outside Australia but are still eligible for an Australian Age Pension, different maximum income test thresholds and payment rates apply for the part pension. According to the Centre of Excellence in Population Ageing Research (CEPAR), only one-third of Australians receiving part pensions have too much assessable wealth (assets) to be eligible for the full pension. For example, investment properties or a granny flat that you own on a property that belongs to someone else, Household contents. You may also be required to confirm your earnings with Centrelink every 14 days to make sure you’re continuing to be paid the right Age Pension amount. Note: The examples include the Pension supplement and Energy supplement. Age Pension income test limits (July 2020 to March 2021). Chancellor Rishi Sunak announced the change in today's Budget. Please contact the developer of this form processor to improve this message. From the 1 April 2020, the cap at age 65 has been set at £41,461. Please get in touch if you’d like to talk to us about your retirement plans. Case studies. From 6 April 2020, the adjusted income figure increases to £240,000 and the threshold income increases to £200,000. The different maximum income test thresholds are outlined in the table below. The table below shows the maximum values of assets you can hold to still be eligible to receive any part pension payment. These assets will be included in your assets test. If you’ve been overpaid the Age Pension since the value of your assets has increased, you’ll be required to repay the excess amount. Discover the latest Age Pension rates here. In simple terms, adjusted income is all income plus any pension contributions paid by an employer. *Annual amounts are estimated by multiplying fortnight amounts by 26. The point at which tapering of the annual pension allowance kicks in will increase by £90,000 for both threshold income and adjusted income in 2020/21. From 1 April 2020, the cap has been set at £36,717. 62 Mill Street, © Otter Financial Services Ltd 2019. If you have a partner, their income will also be included in your income test assessment. The lifetime allowance – the maximum amount you can have in a pension over a lifetime – will also increase from £1,055,000 to £1,073,100 for 2020/21. Sunak also announced a reduction to the minimum annual allowance to £4,000 for those with incomes which breach both the threshold income and adjusted income limits. One element is the 'decoy effect' – where a higher-priced item is sold, to make items next to it look like bargains. Become a SuperGuide Premium member and access independent expert guidance on topics such as: SuperGuide Premium also includes performance rankings for 235 super funds and 166 pension funds, more than 500 articles, how-to guides, checklists, tips and strategies, calculators, case studies, quizzes and a monthly newsletter.