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Changes to Age Pension Threshold from 1 July 2024

It is not uncommon for changes to be made each year to the Age Pension, it’s a regular occurrence, but this year will see some other changes that will have an impact on retirees and your income over the next 12 months from 1 July 2024.

 

Changes to Threshold Limits

Each year the Australian Government updates the upper income and assets threshold in March to keep rates in line with inflation, and you will have recently received these updates to your payments.  The upper thresholds are those that disqualify some older Australians from receiving a part or any pension payments.

 

What we are eagerly awaiting now is the final figures for the lower thresholds which are likely to see an increase in the number of people eligible for a full age pension.  This means that if you were borderline on receiving an age pension entitlement previously, from 1 July, you may now become eligible and automatically receive a Pension Concession Card as well.

 

Age Pension Age

2023 was the final year for the legislative increases to the age pension age and there are no further increases on the horizon at the stage.  Therefore, the age pension qualification remains now at 67 to try and keep skilled workers in the workforce for a little longer.

 

Plan Ahead

It is always good to look ahead for the next 12 months when it comes to managing withdrawals from your super and retirement nest egg, and with these changes in the wind, now is a good time to review your financial position.   The current thresholds are listed below, and you may find you are entitled to a higher fortnightly payment from 1 July 2024. 

 

Income Test

A single pensioner can earn $204 per fortnight and may still be eligible for the full single pension of $1,116.30 per fortnight, including all supplements before any reductions occur.  The rate of reduction applied will be 50 cents for each dollar over $204 of income earned per fortnight.

 

A pensioner couple can hear a combined $360 per fortnight and may still be eligible for the full pension of $1,682.80 per fortnight, including all supplements before any reductions occur.  The rate of reduction applied with be 25 cents for each dollar over $260 of income earned per fortnight.

 

Assets Test

Full aged pension rates may apply for single homeowners with assessable assets under $301,750 and single non-homeowners with assessable assets under $543,750.

 

Full age pension rates may apply for coupled homeowners with assessable assets under $451,500 and coupled non-homeowners with assessable assets under $693,500.

 

Once the assessable assets exceed the lower threshold limits, the age pension reduces by $3 per fortnight for each $1,000 for assessable assets that exceed the lower limit.

 

Partial age pension rates may apply for single homeowners who have up to $674,000 of assessable assets, and single non-homeowners who have up to $916,000.


Partial age pension rates may apply for coupled homeowners who have up to $1,012,500 of assessable assets and coupled non-homeowners who have up to $1,245,500.

 

Changes to Deeming Rates

These are usually at the discretion of the Minister and are often reviewed on 1 July each year.  In recent times with the COVID pandemic impact, deeming rates had been frozen and were due to change from 30 June 2024, however, this freeze has been extended until 30 June 2025.


Current Deeming thresholds and Rates

Current thresholds
New thresholds
(1 July)

Change

Current rates


(frozen until 30 June 2025)


Singles up to

$60,400

$62,600

$2200

0.25%

Singles Above

$60,400

$62,600


2.25%






Couples up to

$100,200

$103,800

$3600

0.25%

Couples Above

$100,200

$103,800


2.25%


Pension Draw Down Rates

The Australian Government set the minimum amount Australians must draw from the super/pensions each year.  In recent times we have seen these rates halved during the COVID pandemic, however, rates have been brought back to ‘normal’ levels and are aged based.  It is important to ensure you are drawing the correct minimums from your nest eggs to ensure not penalties apply to you or your family in the event of your death.


Age on 1 July

New (standard) minimum drawdown rates from 1 July 2023

60-64

4%

65-74

5%

75-79

6%

80-84

7%

85-89

9%

90-94

11%

95 or over

14%


We strongly recommend if you currently receive an age pension or are over the aged of 65, that you speak with our team at Magnify Wealth to assist you with planning for retirement, income and assets testing and eligibility requirements or check out the free age pension entitlements calculator here.

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