Starting July 1, 2024, a major Centrelink increase will affect the age pension system, benefiting many older Australians. While the base pension rates themselves won’t rise, changes to income and asset test thresholds mean that many pensioners will see higher payments. These updates will also help more people qualify for the age pension or move from part pensions to full pensions.
Centrelink Increase: Age Pension Changes from July
Income Test Adjustments
From July 1, the income test thresholds will see some important updates:
Single Pensioners: The income-free area, which lets pensioners earn a certain amount without affecting their payments, will increase from $204 to $212 per fortnight. Earnings above this threshold will reduce the pension amount by 50 cents for every dollar over the limit.
Couple Pensioners: The combined income-free area will rise from $360 to $372 per fortnight. Similarly, any income above this threshold will decrease their pension amount by 50 cents for every dollar over the limit.
The maximum income limits before pension payments stop entirely are also increasing:
Single Pensioners: The limit will rise from $2,436.60 to $2,444.60 per fortnight.
Couple Pensioners: The combined limit will increase from $3,725.60 to $3,737.60 per fortnight.
Asset Test Adjustments
The asset test thresholds will also change, allowing pensioners to hold more assets without affecting their pension payments:
Homeowners:
- Single Pensioners: The asset limit for receiving the full pension will increase from $301,750 to $314,000.
- Couple Pensioners: The combined asset limit will rise from $451,500 to $470,000.
Non-Homeowners:
- Single Pensioners: The asset limit for receiving the full pension will increase from $543,750 to $566,000.
- Couple Pensioners: The combined asset limit will rise from $693,500 to $722,000.
For those receiving part pensions, the thresholds will also go up:
- Single Homeowners: The asset limit for part pensions will rise from $674,000 to $686,250.
- Single Non-Homeowners: The asset limit for part pensions will increase from $916,000 to $938,250.
- Couple Homeowners: The combined asset limit for part pensions will rise from $1,012,500 to $1,031,000.
- Couple Non-Homeowners: The combined asset limit for part pensions will increase from $1,254,500 to $1,283,000.
Deeming Rates and Thresholds
Deeming rates, which estimate income from financial assets, will stay the same until June 30, 2025. However, the thresholds for deeming will be adjusted, allowing for higher amounts of assets to be deemed at a lower rate:
- Single Pensioners: The first $62,600 of financial assets will be deemed to earn 0.25%, up from $60,400.
- Couple Pensioners: The first $103,800 of combined financial assets will be deemed to earn 0.25%, up from $100,200.
Amounts above these thresholds will still be deemed to earn 2.25%.
Additional Adjustments
Other specific pension-related changes starting from July 1 include:
- Retirement Village and Granny Flat Residents: The extra allowable amount for non-homeowners in retirement villages and granny flat arrangements will increase from $242,000 to $252,000.
- Special Disability Trusts: The concessional asset value limit will rise from $781,250 to $813,250.
- Exempt Funeral Investment: The threshold for exempt funeral investments will increase from $15,000 to $15,500.
Conclusion
The Centrelink increase starting July 2024 is set to offer greater financial flexibility and benefits to older Australians. By raising income and asset thresholds, more people can qualify for the age pension, and existing pensioners can receive higher payments. It’s a good idea for pensioners to review their circumstances to see how these changes might affect their payments and to take advantage of the new thresholds. For personalized advice, pensioners should contact Centrelink or a financial advisor.
FAQ’s
What is the Centrelink increase starting July 2024?
The Centrelink increase starting July 2024 involves changes to the income and asset test thresholds for the age pension. This means that more Australians will qualify for the age pension or move from part pensions to full pensions. While the base pension rates won’t change, the new thresholds will allow pensioners to earn more income and hold more assets without affecting their payments.
How will the income test changes affect me?
From July 1, 2024, the income-free area for single pensioners will increase from $204 to $212 per fortnight, and for couples, it will rise from $360 to $372 per fortnight. This means you can earn more without your pension amount being reduced. Any income above these thresholds will decrease the pension amount by 50 cents for every dollar over the limit.
What are the new asset test thresholds for 2024?
The asset test thresholds will also rise. For single homeowners, the asset limit for receiving the full pension will increase from $301,750 to $314,000. For couples, the limit will go up from $451,500 to $470,000. For non-homeowners, the limits will rise as well. These changes allow pensioners to hold more assets before their pension payments are impacted.