Q I UNDERSTAND in January 2017 the age pension will change. It is to do with deeming rates. As yet I have been unable to ascertain how this will affect my part-pension I receive from Centrelink. Does this change mean that only $30,000 of my term deposit will be deemed, and the rest classed as income which, in my case, means I will hardly receive any age pension?
A THE big changes to come in next January are to do with the assets test. The taper rate will be increased from $1.50 to $3. At the same time the threshold where the pension starts to reduce will be increased but the cut-off point where a person loses the pension entirely has been reduced. For a single homeowner the lower threshold will increase from $205,500 to $250,000 while the upper threshold will reduce from $783,500 to $547,000. For homeowner couples, the lower figure will increase from $291,500 to $375,000 and the cut-out point will reduce from $1,156,500 to $823,000.
These changes only affect asset-tested pensioners. The effect is that pensioners with a lower level of assets should receive a higher pension than they are getting now, while those with a higher level of assets will suffer a drop in their pension. There are strategies such as giving money away, investing in funeral bonds, and spending money on travel or renovations that can offset the effect of these changes – but make sure you take advice before acting. The government is stretched for money and, in my view, there will be further changes as time passes.
