Pension assets tests are changing here's what it means

IN JANUARY, the pension assets test changes. The lower threshold will increase, but the higher threshold will decrease.

This means those at the lower end of the scale may receive more pension, while those at the upper end may even lose their entire pension.

For a single homeowner the lower threshold will increase from $202,000 to $250,000, but the cut-off point will fall from $775,550 to $547,000.

For a home owner couple the lower threshold will increase from $286,500 to $375,000. The cut-off point will fall from $1,151,500 to $823,000.

These numbers are approximate only because indexation should increase them a little by January.

While this may be good news for people at the lower end of the scale, it's important to understand the interplay between the income test and the assets test. One reader wrote to me to say their assets were now $375,000 and they were excited about getting an increase in their pension.

But when you analyse the assets of this particular person, their financial assets were $350,000 and their personal effects were $25,000. The deemed income on their financial assets would be $390 a fortnight, which is above the lower income test threshold. This means their pension in January should be $1268.40 a fortnight.

Yes, under the revised assets test it would have been $1317.40, but a pensioner is assessed under both tests and the one that gives the lowest pension is the one used.

To check out your own situation, go to my website Under Calculators, you will find both a deeming calculator and an age pension calculator.

The deeming rates will not change in January, unless they fall in line with the drop in the cash rate, so they should be valid.

Once you have calculated your deemed income, it's only a matter of going to the age pension calculator to work out what your pension is now and what it may be in January. As always, preparation is the key - if you think your pension will be affected, take advice sooner rather than later.

Noel Whittaker is the author of Making Money Made Simple. His advice is general and readers should seek their own professional advice before making any financial decisions. Email: