Centrelink has recently sent out correspondence to recipients notifying them of the upcoming changes taking effect in January 2017.
This is one of the biggest changes to the social security system we have seen in recent years.
If you are retired or about to retire these may impact you. It will mean many will now lose their entitlements or not be entitled when they want to retire.
There are two major changes:
- The first change to the Assets Test relates to the threshold above which a pensioner’s entitlement will start to reduce. They will increase the Assets Test thresholds from 1 January 2017 so more pensioners will receive a full age pension. For example, for a pensioner homeowner couple the threshold will increase from $296,500 to $375,000. So now a couple may have $375,000 in assets and still receive a full age pension.
- The second change will increase the current taper rate from $1.50 to $3 per fortnight per $1,000 of assets over and above the Assets Test threshold. This means that the amount of assets a pensioner can have on top of their family home and still receive a part pension will be reduced. An example: a pensioner home owner couple may have up to $1,175,000 in assets at the moment and still receive a pension, whereas this will drop to $816,000 in January. You can see a significant number of pensioners will now lose benefits if they hold assets in the range of $816,000 to $1,175,000.
The government has allowed the people affected to maintain a Commonwealth Seniors health card so the health card benefits will not be lost. This is little consolation though if you were receiving an income of up to $10,000 per annum that you will no longer receive.
If you wish to obtain further information on your Centrelink entitlements or have any questions regarding this please give the staff at Ritchie Advice a call, we would be more than happy to help.
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided in this article is general advice only.
Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.
