If you are on the pension, or nearing retirement, it is extremely important that you review you assets. Changes are coming into effect this January that will affect hundreds of thousands of Australians.
Many Australians are unaware that the upcoming changes to the age pension assets test will affect them, however, in some cases, it could see some losing their pension completely.
What are the changes to the Australian age pension?
The main changes are the thresholds at which people can receive the part pension. They are as follows:
- The threshold for couples who own their own home will drop from $1.18 million to $823,000
- The single home owner threshold will drop from $792,000 to $547,000
The good news though?
The lower threshold at which people can receive the full pension will be increased from
- $296,500 to $375,000 for couples and
- $209,000 to $250,000 for singles
meaning up to 170,000 people will receive a higher pension. The threshold for non-homeowners are even more generous.
It is worthwhile speaking to your financial planner about how this will affect you. In some cases, it may be worth spending some of your assets, ie. taking a big holiday you had planned, buying a new car or doing some renovating, sooner than you had planned. This affects each person uniquely so it is important that you have your own case reviewed in detail to make sure your retirement is still on track.