Over the coming months Centrelink Australia wide will be forwarded notifications to current part pensioners advising them that from 1st of January 2017 their pension payments will be affected due to the new taper rates.
Assets Test thresholds above which Age Pension entitlements start to reduce will be increased from 1 January 2017. For some pensioners that where previously receiving a part pension they will actually receive an increase to they pension as per the below thresholds. This of course is great news and no action needs to be taken to gain this benefit.
| Current thresholds | New thresholds | Change | |
| Single, homeowner | $209,000 | $250,000 | $41,000 |
| Single, non-homeowner | $360,500 | $450,000 | $89,500 |
| Couple, homeowner | $296,500 | $375,000 | $78,500 |
| Couple, non-homeowner | $448,000 | $575,000 | $127,000 |
For many other part pension recipients this will however have a negative effect.
- Assets Test taper rate will be increased from $1.50 p.f. per $1,000 to $3.00 p.f. per $1,000 above the Assets Test thresholds from 1 January 2017
- Assets Test upper thresholds above which the Age Pension is not payable will be reduced from 1 January 2017
| Current upper thresholds | New upper thresholds | Change | |
| Single, homeowner | $793,750 | $542,500 | $251,250 |
| Single, non-homeowner | $945,250 | $742,500 | $202,750 |
| Couple, homeowner | $1,178,500 | $816,000 | $362,500 |
| Couple, non-homeowner | $1,330,000 | $1,016,000 | $314,000 |
- Measuring the impact (single, homeowner)
| Assessable assets | Current Age Pension | New Age Pension on 1 January 2017 | Reduction in Age Pension |
| $100,000 | $22,805 | $22,805 | $0 |
| $200,000 | $22,056 | $22,056 | $0 |
| $300,000 | $19,256 | $18,905 | $351 |
| $400,000 | $15,356 | $11,105 | $4,251 |
| $500,000 | $11,456 | $3,305 | $8,151 |
| $542,500 | $9,798 | $0 | $9,798 |
| $600,000 | $7,556 | $0 | $7,556 |
| $700,000 | $3,656 | $0 | $3,656 |
| $800,000 | $0 | $0 | $0 |
As stated above the worst affected Single Homeowners will loose $9798 per year in pension. In anyone language this is a very large amount to find elsewhere.
- Measuring the impact (couple, homeowner)
| Assessable assets | Current Age Pension | New Age Pension on 1 January 2017 | Reduction in Age Pension |
| $200,000 | $34,382 | $34,382 | $0 |
| $300,000 | $33,915 | $33,915 | $0 |
| $400,000 | $30,346 | $32,290 | ($1,944) |
| $500,000 | $26,446 | $24,632 | $1,814 |
| $600,000 | $22,546 | $16,832 | $5,714 |
| $700,000 | $18,646 | $9,032 | $9,614 |
| $800,000 | $14,746 | $1,924 | $12,822 |
| $816,000 | $14,122 | $0 | $14,122 |
| $900,000 | $10,846 | $0 | $10,846 |
| $1,000,000 | $6,946 | $0 | $6,946 |
| $1,100,000 | $3,046 | $0 | $3,046 |
| $1,200,000 | $0 | $0 | $0 |
For couple homeowners the worst effected will loose $14122 per annum. That is over $540 per fortnight and will be a major reduction to deal with. This will also become a major issue for those pensioners currently in an age care facility where the current pension in assisting to meet the age-care fees levied by the age care provider.
The good news, if there was to be any, is that with personal planning advice targeting each affected individual circumstances we can reduce the impact of these changes over time. With accurate management of financial data provided to centrelink, along with putting in place government approved capital guaranteed products, the above reductions in pension can be reduced and potential improved year on year to assist in regaining your lost income as a result of these changes.
If you would like to find out more about protecting your centrelink benefits overtime, please contact any of our 7 offices and one of our qualified centrelink experts will be only to happy to assist you. We provide a free analysis of your current financial circumstances and will also show you how we can assist you in improving your benefits going forward for those pensioners being affect by these changes.
To book an obligation free appointment to find out how we can potential assist go to contact-us