Income test
Age pension is a government funded lifetime annuity. It provides income support to a range of concessions for eligible older Australians. Age Pension is paid at different rates depending on a person’s circumstances.
To be eligible for age pension, you need to meet the following conditions:
Meet the Qualifying age
Centrelink has now discontinued the preservation age as a guideline and set 67 as the required age to qualify for the aged pension.
Satisfy the Income Test
To receive a either a part or full pension, there is a limit to the amount of income you can receive per fortnight which varies based on if you are single or a couple. The exact amount of income which can be received before the amount of aged pension you receive is lessened is:
Satisfy the Assets Test
To qualify for a full pension, the maximum allowable assets are as follows:
To qualify for a part pension, the maximum allowable assets are:
If you meet the above tests, Centrelink will then calculate your rate of pension or allowance based on the lower of the two amounts calculated under the Income Test and the Assets Test.
The Centrelink treatment of account-based pensions changed from 1 January 2015. Any account-based pension commenced on or after 1 January 2015 will all be treated as a financial asset and counted towards the Income Test. For any account-based pensions commenced prior to January 2015 where the pensioner is in receipt of Centrelink benefits at 1 January 2015, the account-based income streams you receive will be grandfathered under the existing rules and therefore partially exempt for the Income Test.
For more information on Age Pension, please see here.
Members of an SMSF can also start paying themselves benefits once they reach their preservation age. To know how to commence a pension in an SMSF, please see here.