From 1 July 2023, the pension income free area is $204 a fortnight for single pensioners, and for couples combined, it is $360 a fortnight. This means a single pensioner over Age Pension age with no other private income could earn up to $504 a fortnight from work and still receive the maximum rate of pension.
A pensioner can receive an amount of private income before their pension rate starts to reduce. This is the income free area which, from 1 July 2023, is $204 for single-rate pensioners and $360 for couples (combined). For each dollar of income above the income free area, the single pension is reduced by 50 cents.
Full Age Pension income threshold increases by: Singles threshold $204 per fortnight, increase is $14 per fortnight, $364 per annum. Couples threshold $360 per fortnight, increase is $24 per fortnight, $624 per annum.
Deeming rates are set by the Federal Government. The deeming rates and thresholds effective at 1 July 2023 are: Singles - 0.25% on the first $56,400 of your total investment assets and 2.25% on your assets over $56,400.
Income Test
Once income exceeds $204 a fortnight, the pension reduces by $0.50 for every additional dollar earned. 1 July 2023 a pensioner couple could earn $360 a fortnight combined and still be eligible for the full pension of $1604 a fortnight, including all supplements.
If you're a homeowner, your asset value limit is lower than someone who doesn't own their home. The current asset value limit for the full Age Pension for a single homeowner is $280,000 and for a single non-homeowner is $504,500.
The first full payment at the new rates of pension will be payday 6 April 2023. The maximum rate of single service pension will rise by $37.50 to $1,064.00 per fortnight and the maximum rate for couples will increase by $28.20 to $802.00 per fortnight (each).
From 20 March 2023 the maximum full Age Pension increases $37.50 per fortnight for a single person, and $28.20 per person per fortnight for a couple.
The pension indexation rate effective Jan. 1, 2023, is 6.3 per cent. Federal Retirees was instrumental in establishing pension indexation back in 1970.
The Work Bonus income bank is useful for pensioners who wish to work, particularly those who undertake intermittent or occasional work. Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances.
The Government has provided two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. These payments will support households to manage the economic impact of the Coronavirus.
This was extended to 31 December 2023 as part of the Social Services Legislation Amendment (Enhancing Pensioner and Veteran Workforce Participation) Bill 2022. This income bank top up is a temporary measure that will see an additional $4,000 added to a pensioners Work Bonus Balance, to a maximum total of $11,800.
It comes down to the amount of savings you already have, plus all sorts of asset types combined. For example, if you are a single homeowner you can get a full pension with an asset limit of $270,500. As a couple with a home and combined assets your limit is reached at $405,000 to receive a full pension.
If you're 60 and over, the income will generally be tax-free. If you're between your preservation age and 59, the components of your super will dictate how it will be taxed.
Inflation Increases For Payments From 1 January 2023
Youth Allowance, Austudy, Abstudy and DSP and some other miscellaneous payments will increase from 1 January 2023. The full schedule of indexation adjustments is here.
If you're a pensioner currently receiving support through Centrelink, you may be eligible for extra help with bills and medicine costs through the Pension Supplement. This supplement is a combined payment of Pharmaceutical Allowance, Utilities Allowance, GST Supplement and Telephone Allowance.
Currently, a pensioner can only earn up to $240 per week before they lose the pension by 50 cents in the dollar. That means they can only really work one day a week before getting penalised (depending on their remuneration). If they earn more than about $33,000 per year—which includes their pension—they also get taxed.
It is your responsibility to update Centrelink if there are changes in your assets or income. Many people believe Centrelink has access to your bank account and will take it into consideration for your payment rate. This isn't true. Centrelink can't access your bank accounts to determine up to date figures.
If the inheritance you receive when added to your already assessable assets will not exceed your personal asset limit, then your pension won't be impacted. However, if it does then it likely will be.
Your assets include any property or possessions you own in full, in part, or have an interest in. This includes both: assets held outside Australia. debts owed to you.
Australians born on or after January 1, 1957, will have to reach 67 years of age before becoming eligible for the pension as part of the new rules. The July 1 changes will also mean singles can earn $204 a fortnight and couples $360 a fortnight, before losing their full pension.