Thousands of older Australians are set to qualify for the Age Pension for the first time while others will be able to earn and own more without affecting their pension payments.
In response to rising inflation and cost-of-living pressures, pension income and asset limits have been lifted.
Age Pension payments increased from Monday, 20 March, after the biannual pension indexation. Asset and income disqualifying limits were also lifted, meaning some might now qualify for the pension while others may be eligible for an increase in their pension payment.
The Age Pension will now cut out when assets reach $634,750 for a single homeowner, and $859,250 for a non-homeowner (increases of $12,500), and at $954,000 for couple combined homeowners and $1,178,000 for non-homeowner couples (increases of $19,000).
Income disqualifying limits increased by $75 per fortnight for a single person to $2318, and by $112.80 per fortnight to $3544 for a couple combined. For an illness-separated couple combined the limit is now $4592 per fortnight – an increase of $150.
If you didn’t qualify for a pension before, or were on a reduced rate due to your income or assets, it’s worth re-examining your financial position to see if you qualify.
While the increased asset and income limits mean more older Australians will receive a pension, the increase is too little, comes too late and doesn’t happen often enough, according to Ian Henschke, chief advocate for National Seniors Australia (NSA).
“NSA recognises our system adjusts for rising cost of living, but it is critical during times of high inflation that we adjust four times a year instead of two,” he says.
“For pensioners struggling to cover necessities such as food, fuel, and electricity, how often is as important as how much.
“CPI [Consumer Price Index] figures were published in late January. It isn’t until two months later that indexation increases are actually paid.”
In addition to the increased indexation frequency, Mr Henschke and NSA are pushing for the government to relax income rules in relation to the Age Pension, arguing that seniors who want to work should be able to do so without impacting their pension payments.
NSA wants to do away with income reporting for the Age Pension entirely, opening the door for many more to be eligible for the pension.
“We need an NZ-style system that eliminates Centrelink reporting and requires pensioners to pay an agreed rate of income tax,” Mr Henschke says.
“It’s simple, fair, will help solve critical workforce shortages and boost the budget bottom line.”
In New Zealand, the Age Pension is open to all residents aged 65 and over and is not governed by income or assets tests.
“We will continue to fight for a system that improves people’s lives,” Mr Henschke says.
“In our budget submission, we have called on the government to index the pension quarterly during times of high inflation and to let pensioners work. Both measures will boost confidence in the retirement system and grow the economy.”
The 2023 Federal Budget will be handed down by Treasurer Jim Chalmers on 9 May.
The next indexation of the Age Pension is on 20 September.
Has your financial position changed in recent years? Have you tried applying for the Age Pension? Let us know in the comments section below.
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