Looking for info on the September 2024 pension increase? You can find information here.
The income and asset thresholds for the Age Pension, Carer Payment and the Disability Support Pension have increased slightly from the July indexation.
At the beginning of each financial year, the Australian Government indexes a number of different financial thresholds to keep up with inflation. This is separate from the March and September payment indexations that give small increases to the base rate of income support Payments like JobSeeker and the Age Pension, but they may still affect things for some people receiving an income alongside their payment.
As of July 1, pensioners and Carer Payment recipients can now earn slightly more money before their payments will be affected. The July indexation raised the income free area for the maximum rate of Age Pension, Disability Support Pension and Carer Payment from $204 per fortnight to $212 per fortnight. This means that a single person receiving any of these payments can earn $8 more per fortnight before their payment is affected.
For couples receiving a combined rate of these payments, the income free area has increased from $360 per fortnight to $372 per fortnight, meaning that a couple can earn $12 more between them per fortnight before their payment is affected.
Income limits for part payments
If you earn more than the income free threshold (and you don’t have any Work Bonus), then you can still receive a part payment. A single person will lose 50 cents from their payment for ever dollar they earn above the threshold, while a coupled person will lose 25 cents per dollar they earn above the threshold.
There is an upper limit on how much you can earn while still being eligible for a part payment. This limit has also been increased as part of the July indexation. For single payment recipients, the upper income limit has increased from $2,436 per fortnight to $2,444.60 per fortnight. For couples, the combined limit has increased from $3,725.60 per fortnight to $3,737.60 per fortnight. Any income over these levels will bring your payment down to $0 for that period.
Your payment won’t be stopped altogether though. You have to earn over the upper limit for 6 consecutive fortnights (12 weeks) for your payment to be suspended. After suspension occurs, you can notify Centrelink within 2 years if your circumstances change to reinstate your payment without needing to reapply.
Asset limits
The asset limits for full payments and part payments have also been increased in the July indexation. The previous asset threshold for single homeowners to receive a full rate of payment was $301,750. It has now increased by $12,250 to $314,000. For a couple who own their home, the threshold has increased from $451,500 to $470,000: an increase of $18,500. The threshold for homeowners who receive a part payment has increased from $674,000 to $685,250 for singles, and from $1,012,500 to $1,031,000 for couples.
The previous asset threshold for single non-homeowners to receive a full rate of payment was $543,750. That’s gone up by $22,250 to $566,000. The threshold for non-homeowning couples has increased from $693,500 to $722,000.
The upper asset limit for receiving a part payment was previously $916,000 for single non-homeowners, it’s now $938,250. For non-homeowning couples, the upper limit was $1,254,500 and is now $1,283,000. Above these limits, your pension will be reduced to $0 per fortnight.
Deeming rates
If you are not receiving an income but you have a certain amount in assets, your assets will be assessed based on an assumed rate of income that could be generated from them, regardless of the income that they are actually generating. This is referred to as ‘deeming’. Deeming rates will remain frozen at their current rate until July 1 2025, but the thresholds have increased as of the most recent July indexation.
If you have between $0 and $62,600 (or $103,800 for a couple) in assets, the income from those assets is deemed to be 0.25 percent of their overall value. These thresholds have increased from $60,400 and $100,200 respectively. This means that if you have $50,000 in assets, your annual income is deemed to be 0.25 percent of that value or $125, and your fortnightly income is around $4.80 ($125 divided by 26).
If you have over these thresholds in assets, any amount over the threshold will be deemed to generate an income of 2.25 percent of their overall value. This calculation is a bit more complex, as the amount below the threshold is still calculated at the lower rate of 0.25 percent. An example of the calculation can be found here.
While these changes will provide a very slight increase for payment recipients with another source of income, we will have to wait until 20 September for the base rates to receive an increase from indexation.
