Are you currently receiving the age pension? Are you aware of the new legislation to take place from 1 January 2017? The new changes could see some pensioners having their pension payments reduced or cancelled altogether.
The age pension is aimed at providing support and access to a range of concessions for eligible older Australians. An individual must be 65 years of age or older to be eligible to receive the Australian pension. They must also be an Australian resident for a continuous period of 10 years, or for several periods that total more than 10 years with one of the periods being at least 5 years.
To determine the pension payment an individual receives, the government has two tests – income test and asset test.
Income received by an individual can affect the amount of pension to be received. There is no change to the income test with the new legislation to come into effect.
An individual is only able to hold a certain value of assets before it affects the pension payment received. There are several assets that are exempt from the asset test, with the principal place of residence being the main asset exempted. From 1 January 2017, the threshold for the asset test will increase. However, the reduction in the pension payment for those assets over the threshold will increase from $1.50 to $3 per fortnight for every $1,000 in assets held.
Do you think these changes will affect your current pension payments? Please don’t hesitate to contact our office on 07 5437 8888 to discuss what these changes may mean for your current pension entitlement.
Kristina Brown – Senior Accountant