In Australia, the Age Pension is either income tested or assets tested, and this determines how much pension you’ll get.
Age Pension has income and asset free areas and limits. If you’re over the free area, you get a lower pension until you reach the limit or cut off point.
That’s why it’s a good idea to understand the connection between depreciating assets and your pension.
If you’re getting the full rate of the Age Pension, or you’re a part-rate pensioner because of your assessable income, changes to your assets’ value might not have any impact on your rate of payment. So, if the value of your assessable assets is under your assets free area, then any reductions in those assets will mean you still get the same maximum rate of payment.
But if your rate of pension is reduced because of your assessable assets, variations in the values can cause changes in your payment.
We take care of the revaluation of some of your assets ourselves. On 20 March and 20 September each year, we automatically revalue your shares and managed funds. In August and February, we update the value of most publicly available account-based pensions. We also automatically revalue assessable properties, like investment properties, on the anniversary of you claiming your payment.
You can get these assets revalued at any time if you feel their value has dropped. Just be aware that when we revalue one listed share, we revalue them all. One of your shares may have dropped, but if the rest have risen, you may get less pension than before.
The main assets we don’t revalue automatically are bank accounts, cars and home contents. Under our notification rules, you need to tell us if your financial assets, including your bank accounts, have increased by $2,000. There are no requirements for you to tell us if they’ve gone down, but keeping us updated if they’ve decreased could mean we pay you more pension.
When we assess your cars, home contents and personal effects, we base the assessment on the value you gave us with your claim. That also means that we keep it at that value unless you tell us otherwise. So, Services Australia doesn’t automatically include a depreciation component for your car or contents. If the value of your car or contents has fallen, then I’d recommend you use our online functions, like the Centrelink online account through myGov, myGov app, or Express Plus Centrelink app, to update them because it’s fast and convenient. You can also call us or visit your local service centre if you need to update the figures that way.
Remember, for cars and household contents, we are after a realistic value of those assets based on what someone would pay for it second hand. We don’t want your new-for-old value or your insurance value. Have a think about what you could get if you sold it in a garage sale, or on the second-hand car market.
Have you had your assets revalued? Did your pension go up or down? Why not share your experience in the comments section below?
Also read: Are you entitled to a Centrelink bereavement payment?
