Changes to the age pension came into effect on 1 July 2023. Here’s what changed and how it could affect Australians entering retirement.
A couple of age pension changes recently came into effect:
- Age pension age has increased from 66.5 to 67
- Income and assets thresholds have increased for the income and assets tests So what does this mean for Australians planning their retirement?
The first change means that if you were born after 31 December 1956, you will qualify for the age pension only at 67 years. The government has taken this step to encourage Australians to stay in the workforce longer in light of labour shortages.
The second change means that some who previously earned or owned a higher amount may now be eligible for at least a part pension. Here’s a quick snapshot of some of the threshold changes.
Full age pension — income threshold
Part age pension — upper income threshold
|Singles threshold increased from $190 per fortnight to $204 — up by $14
Couples (combined) threshold increased from $336 per fortnight to $360 — up by $24
|Singles threshold increased from $2,318 per fortnight to $2,332 — up by $14
Couples (combined) threshold increased from $3,544 per fortnight to $3,568 — up by $24
Full age pension — assets threshold
Part age pension — upper assets threshold
|Single homeowners threshold increased from $280,000 per annum to $301,750 — up by $21,750
Couples homeowners (combined) threshold increased from $419,000 to $451,500 — up by $32,500
|Single homeowners threshold increased from $634,750 per annum to $656,500 — up by $21,750
Couples homeowners (combined) threshold increased from $954,000 to $986,500 — up by $32,500
You can find all threshold figures on the Services Australia website.
While the increase in thresholds is welcome news for Australians planning retirement, many still won’t be eligible for the age pension, and those who are could still find it difficult to get by on. This is why it may be important to have your own retirement safeguards in place.
We can create a plan unique to your specific needs and circumstances to get you on the right track for a comfortable retirement. While incorporating the age pension can be useful for some, we can also look at making the most of your superannuation and any investments you have and create projections to give you an idea of how far your money can stretch based on various scenarios, along with options to convert some of your superannuation into lifetime income. We can also get your insurances in order — a crucial but often forgotten step in protecting your financial future. Get in touch with the team at ADR Wealth, and we can plan ahead.
Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement. Superannuation, tax and social security law is complex. You should take advice from a professional, considering your own personal situation, before deciding a course of action.