Whether your balance is in a super account, super pension account, or bank account, it will be assessed by Centrelink.

Super is not assessed for people under the age pension qualifying age. This means that if an applicant’s spouse is under the qualifying age, the spouse’s super balance will be excluded from Centrelink’s assessment.

Centrelink tests overview

Centrelink applies two tests, the Assets Test and the Income Test – in effect, they work out your pension twice. They then use the lower amount arrived at from both tests to work out your pension entitlement.

What is the Assets Test?

The Assets Test looks at all the things you own (with a few exceptions, such as your principal home) to work out what the government thinks you’d have if you were to sell your assets. The test includes things such as investment properties, super, financial investments, cars, caravans, boats, and other goods of value.   

How much money can I have before it affects my pension?

Money you have in the bank or in investments (including super) counts towards the Assets Test.

Maximum assets used in the Centrelink Age Pension assessment tests

The figures below are applicable from 1 July 2020.

Centrelink Age Pension Assets Test FULL PENSION PART PENSION
  Homeowner Non-homeowner Homeowner Non-homeowner
Single $268,000 $482,500 $583,000 $797,500
Couple, combined $401,500 $616,000 $876,500 $1,091,000
Couple, separated due to illness, combined $401,500 $616,000 $1,031,500 $1,246,000
Couple, 1 partner eligible, combined $401,500 $616,000 $876,500 $1,091,000

What’s included in the Assets Test for the Centrelink Age Pension?

The list includes (but is not limited to):

  • Antiques, artworks and collections
  • Business assets
  • Cars, boats and motorbikes
  • Caravans
  • Computers and electronic equipment
  • Financial investments such as shares and bonds
  • Household contents
  • Investment and rental properties
  • Jewellery and bullion
  • Super
  • Surrender value of life insurance policies

Remember, your principal home is not included in calculations for the Assets Test.

The Income Test

The Income Test looks at what you earn and uses that to work out your pension entitlements.  

What’s included in the Income Test for the Centrelink Age Pension?

Items in the Income Test include:

  • Investment income such as dividends
  • Rental income from investment properties
  • Income from superannuation pensions or annuities
  • Royalties and commissions
  • Payment for work you do
  • Deemed interest from bank accounts and super

Since the actual amount of income from some of these may be hard to assess, the Government uses 'deeming rules' in some cases to come up with standard rates of income.

How much money can I earn before it affects my pension? 

Centrelink Age Pension Income Test Income per fortnight Amount your Centrelink Age Pension will be reduced by
Single Up to $178 $0
  Over $178 50 cents for every dollar over $178
A couple, combined Up to $316 $0
  Over $316 50 cents for every dollar over $316

What is deeming?

Deeming is a way for the government to make an estimate of what you're likely to earn from things such as investments  – regardless of what you might actually earn from them. Centrelink uses deeming to calculate your Age Pension, based on your estimated future income earnings.

The good news is, if you earn more than the deeming rate estimate, then the difference is not counted.  Of course, if you earn less than the deeming rate, the difference is counted.

The deeming rates are set as percentages depending on your circumstances and the value of your investments. Note that the rates in the table below are subject to the reduced deeming rates.

  Value of financial assets Rate deemed to earn each year
Single First $51,800 1%
Over $51,800 2.25%*
Couple with at least one on the Centrelink Age pension First $86,200 (combined) 1%
Over $86,200 (combined) 2.25%*
Couple with neither on the Centrelink Age Pension First $43,100 (each) 1%
Over $43,100 (each) 2.25%*

*Was 3.00% before May 2020.

Changes to the deeming rate

Deeming is the way the Government calculates income from financial assets. Deeming assumes that money you have invested in financial assets is earning a certain amount of income regardless of the actual return.

As of May 2020, the upper deeming rate is 2.25% and the lower deeming rate is 0.25%. The reductions reflect low interest rates and the impact on savings income. According to Treasury, around 565,000 people on the Age Pension will, on average, receive around $324 more from the Age Pension in the first full year that the reduced rates apply.

Treasury has provided worked examples on how these changes could help a single on a part-pension, and a couple on the full pension.

See worked examples

Other eligibility tests

As well as meeting the Assets Test or Income Test, to qualify for the Government’s aged pension through Centrelink:

  1. you must be an Australian resident, and
  2. you must have reached the qualifying age.

Speak with a retirement specialist

Instead of sifting through information to find out what's relevant to you, ask to speak to a retirement specialist. There's no extra cost to use this service. The team's available between 9am and 5pm (AEST/AEDT) on 1800 222 071.

Use the form below to request a call back. Note that the call back service is available for Australian residents only. If you're overseas, please call +61 3 9192 4414.

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