The value of assets you can own in retirement, while still qualifying for the age pension, will increase next week.
How much you can earn while still qualifying for the pension will also increase.
The changes reflect indexation adjustments, made twice per year, to keep up with inflation.
Pensioners will also receive a higher fortnightly payment under the inflation adjustments.
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Are you eligible for the pension?
Australians born on or after 1 January 1957 are eligible for the pension at age 67.
You do not need to be retired, however, most people are at or close to retirement by this age.
The pension is subject to both an assets test and income test.
If you own or earn too much, you may only qualify for a part-pension, or no pension at all.
Let’s dig into the details.
How much can you own in retirement and still get the pension?
Australians in retirement will be able to own a higher value of assets from 20 March and still qualify for at least a part-pension.
Your home is excluded from the assets test.
If you do not own your home, you can own more assets and still qualify for at least a part-pension.
Assessable assets include your superannuation, ASX shares, international shares, bonds, managed funds, rental properties, and cash.
Under this next round of indexation changes, single homeowners will be able to own $722,000 in assets, up from $714,500, and still be eligible for a part-payment.
Single non-homeowners will be able to own $980,000 in assets, up from $972,500, and still be eligible for a part-pension.
Couple homeowners will be able to own $1,085,000 worth of assets, up from $1,074,000, and still be eligible for a part-pension.
Couple non-homeowners will be able to own $1,343,000 in assets, up from $1,332,000, and still be eligible for a part-payment.
How much can you earn in retirement and still get an age pension?
In order to be eligible for at least a part-pension, singles will be able earn up to $2,619.80 per fortnight, up from $2,575.40 per fortnight, under the next lot of indexation changes.
Couples will be able to earn up to $4,000.80 per fortnight, up from $3,934 per fortnight.
As we’ve reported, the Federal Government is also implementing a second increase to pensioner deeming rates.
Deeming is used to estimate a pensioner’s annual investment income.
Deeming applies to all assets except investment properties (pensioners must report their actual rental income each year).
The lower deeming rate will rise from 0.75% to 1.25% for assets worth less than $64,200 for singles and $106,200 for couples.
The upper deeming rate will lift from 2.75% to 3.25% for assets worth more than these amounts.
How much will the pension increase next week?
Singles on the full age pension will receive an extra $22.20 per fortnight from Friday.
Couples will receive an extra $16.70 per person, per fortnight.
This will raise the full pension, with both supplements included, to $1,200.90 per fortnight for singles.
Couples will receive $905.20 per partner, per fortnight.