Someone Please Explain Age Pension

Aerith-Waifu on 19/02/2025 - 08:19

From 20 September 2024, the full pension is available, under the assets test, for homeowner singles whose assessable assets are under $314,000 – for homeowner couples the number is $470,000. The numbers for non-homeowners are $566,000 and $722,000 respectively.

Once assessable assets exceed the lower threshold, the pension reduces by $3 fortnight for each $1000 by which assessable assets exceed the lower threshold.

A single homeowner can have up to $695,500 of assessable assets and receive a part pension – for a single non-homeowner the higher threshold is $947,500. For a couple, the higher threshold to $1,045,500 for a homeowner and $1,297,500 for a non-homeowner.

Please note: Calculated answers include all supplements and if calculated for a couple is the joint pension. It is also assumed that both parties are of pensionable age.

So what is assessable assets? Is a PPOR an assessable assets?

For example 1: A is single and retiring he has PPOR worth $750k, small super of $150k with no other income or savings, $150k is all he has. Does that mean he is not eligible for the pension or even part pension until his $150k is gone?

What about example 2: B is single retiring with PPOR worth $500k, no SUPER, saving of $100k. Then he is able to get part pension?

Education & Work

Comments

  • kmwa on 19/02/2025 - 15:12
    +1

    Even if you are uber-rich, and have assets which exclude you from getting a pension, it is worth applying to Centrelink.
    You won't get a pension, but you will get an Age Pensioner Concession Card, which will get you cheap scripts and bulk-billing and many other benefits.

    • sumyungguy on 19/02/2025 - 15:22
      +1

      I thought one needs to be receiving a pension or other eligible payment to get a pensioner concession card?

      • barbarella on 19/02/2025 - 18:46

        no

        • sumyungguy on 19/02/2025 - 18:48

          Does someone sell fakes?

          • May4th on 21/02/2025 - 08:55

            @sumyungguy: a lot of people confuse the seniors card with pensioners concession

      • Protractor on 19/02/2025 - 20:30
        +1

        Now you can see why one would choose Straya as a migrant destination.
        If a person is an abled person, the aged pension & concession should be based on the number of years of employment here.
        Starting at a minimum of 10 years residency & employment

        • tenpercent on 20/02/2025 - 07:17

          Do elderly parents of new arrivals (reunification visa) need to wait at the moment?

          Centrelink's Payment finder tell me that a 69 year old permanent resident and their 69 year old partner who both recently arrived in Australia are eligible for age pension.

          Don't forget to pay your taxes. There's more elderly arrivals to pay for who haven't contributed anything to Australia's economy, tax base, or society.

    • miwahni on 19/02/2025 - 23:03
      +3

      The Commonwealth Seniors Health card is available to 67+ singles earning up to $99k and couples $158k, and gives you a discount of 75% on prescription medicines and a lower Medicare safety net threshold. And if you live in WA, SA or NSW there are extra perks that come with it in the form of various govt discounts. Even if you don't need to fall back on an aged pension to survive, you may still qualify for this card.

    • Purp on 21/02/2025 - 07:52

      No you will not get a pension card if you aren't eligible for a pension payment. If you meet eligibility you may be able to receive a Commonwealth seniors health card which is similar. Nsw provides 1 rebate for cshc holders in the form of a seniors energy rebate 250 payment once per financial year

  • loropy9 on 19/02/2025 - 17:46
    +1

    Age pension in Oz is not a pension like in most other countries. It is a social welfare payment. The system simply rewards people who have little and penalises people who have a lot at retirement age.

    • Jolakot on 19/02/2025 - 23:49
      +2

      No, it rewards those who have little and those who are wealthy enough to hire a tax planner to sequester their assets. The middle is screwed.

    • tenpercent on 20/02/2025 - 07:17

      Does it penalise? Do you get taxed more? Do they take something off you?

      • loropy9 on 20/02/2025 - 11:11

        Yes, I do get taxed more.

  • barbarella on 19/02/2025 - 18:45
    +1

    You can make an appointment at Centrelink to see a Retirement/Pension expert….they can tell you exactly how it will work for you in your circumstances….worth doing :)

  • Aerith-Waifu on 19/02/2025 - 21:05

    Makes sense to see why people now live 50% of the time in Thailand with Pension, it goes a long way when compared to here. Especially if their PPOR is worth a few million dollars and still eligible for it.

    • Protractor on 19/02/2025 - 23:27

      Two troughs for the price of one someone else's tax or sacrifice.
      The reason it's cheaper to live in Thailand on a pension is the exploitation factor.

      • Aerith-Waifu on 20/02/2025 - 04:22

        But its legal. if its legal then its not an exploitation. just like many politicians

        • tenpercent on 20/02/2025 - 08:25

          Said the slave-owner to the slaves in 1832.

          • frewer on 21/02/2025 - 07:19
            +2

            @tenpercent: There is a difference between legality and morality.

            • tenpercent on 21/02/2025 - 07:21
              +1

              @frewer: I assume you mean morality. And yes, yes there is.

              • frewer on 21/02/2025 - 16:56
                +1

                @tenpercent: Every system has loopholes. And often created by the law makers/ruler makers, the knowing will exploit it to the kingdom comes, hence the "so and so rich person paid $100 income tax last year", hence giant cooperation has an army of lawyers/accountants for only purpose to 'minimize taxes', hence Apple barely paid tax in AU and so on …

        • soan papdi on 20/02/2025 - 17:55

          But its legal. if its legal then its not an exploitation

          Google and BHP would like to hire you for their lobbying team.

  • Chewy2221 on 20/02/2025 - 08:44
    +2

    Centrelink's Financial Information Service is free service which will answer most, if not all of your questions. They will provide you with a written report which outlines your options including tax implications for each option as well as any entitlement to Centrelink payments & services. The collective wisdom of Oz bargain is no substitute for talking with someone who does this sort of thing for a living. Good luck

    • bmxr on 20/02/2025 - 11:45

      This. I began to tap out exactly this reply. We did a video/phone call with them and the parents prior to preparing their pension application and it was very, very, very helpful.

  • tessel on 20/02/2025 - 18:29

    House is exempt if living there and it is less than 5 acres. If not living there then it is an asset. However, always exception to every rule but generally speaking…

  • SeVeN11 on 21/02/2025 - 01:10
    +1

    The biggest loophole in the age pension is that PPOR is exempt from the asset test.
    You can live in a $10m mansion, have a $5m Line of Credit/Reverse mortgage against the property and draw the age pension.

    Debt is not assessable nor is it taxable.

    • sumyungguy on 21/02/2025 - 01:22
      +1

      You can't reverse mortgage more than 1.5 times the pension so that's not a loophole.

      • SeVeN11 on 21/02/2025 - 01:40
        +1

        In that case, best to stick to a simple mortgage.

      • mungicide on 21/02/2025 - 10:52

        So it's about max for single $1,144.4 /fortnight + $572.2/ fortnight = $1,716.6 / fortnight ?
        I doubt you can service a 10M mansion such amount?

        • tenpercent on 22/02/2025 - 09:30

          Service? Do you mean maids and butlers?

          • mungicide on 22/02/2025 - 09:39

            @tenpercent: i mean usual house maintenance wear & tear, council rates, sewerage charges, strata fees, insurances etc etc

            • mungicide on 22/02/2025 - 09:50

              @mungicide: Even at 1% for all that, you are talking about $100k pa just for maintenance!

  • mdw000 on 21/02/2025 - 10:36

    Thats why you don't see $100 notes these days https://www.smh.com.au/national/hoarding-100s-to-ensure-a-pe…

    • tenpercent on 22/02/2025 - 09:30

      Mr Mair's best guess is the average pensioner couple holds around $50,000 in undeclared $50 and $100 notes in order to access the pension.

      Mr Mair is delusional. Unless he means "the average Sydney lower north shore or eastern suburbs pensioner couple"

  • Logical on 21/02/2025 - 11:24

    For a couple the best case is to buy 2 houses next to each other, divorce at 60. Each own their PPOR next to each other. Each have $314K cash. Each get full pension. Do sleep overs every other night or whenever it suits.

    • sumyungguy on 21/02/2025 - 11:49

      Why not divorce at 67?

      • Logical on 21/02/2025 - 20:28

        Yep, that won't arouse any suspicion… How about divorcing the day before entitled to a pension?

        • Windows7forever on 22/02/2025 - 01:16

          A logical explanation!

        • sumyungguy on 22/02/2025 - 08:27

          Sham divorce has to be legally executed, date is irrelevant

    • Aerith-Waifu on 21/02/2025 - 20:16

      How about this: Sell the house which is worth $3m, buy a smaller less maintenance place and then transfer the money to the kids as gifts (let’s just say the kids are trustworthy), keep $314k. Live on the pension and then when need the money get the money from the kids.

      Say 3M sold, bought a smaller place for 1m, give the kids $1686000 as gifts. Keep the $314k. And when need the money get the money from kids. (Provided the kids will give back the money) How is that for an idea? Win win for both

      Or once the house is sold, set up a family trust with 2 kids and let the kids get 99% of the family distributions. And when need the money ask the kids for money. Yes? No?

      • Logical on 21/02/2025 - 20:26

        Yeah. They can't just gift kids $1.6M. They check all these things. There is a cap on gifts … Something like $20K per few years max. Hence why I said divorce at 60. Gets you 5 years before pension and doesn't raise too many suspicions. Divorce a day before entitled to a pension and gift money and they will know it was a scheme to get rid of assets etc

        • Aerith-Waifu on 21/02/2025 - 20:54

          Really? You can’t gift the kids money? What about give the money to the kids to purchase a house (for them)?

          What’s this 5 year rule all about? Are you saying you can still gift the money to the kids but have to wait 5 years before you can get pension? How does the rich do it then?

        • tenpercent on 22/02/2025 - 09:25

          Can you live at the same address as your divorced "ex" ;) partner?

  • flyk on 22/02/2025 - 08:13

    I am a Certified Financial Planner, and can confirm PPOR is exempt from Centrelink means test.

  • duluxe2000 on 22/02/2025 - 09:40

    What stop someone from buying holiday houses overseas but undeclare and receiving age pensions so they can live 6 months in Australia and 6 months overseas ?

Login or Join to leave a comment
Login Join