Part-pensioners move to a full pension on July 1 to adjust for inflation

It's an interesting change; the pension rates themselves are not changing, but the thresholds that determine how much pension is paid have been adjusted for inflation.

The result is that many part-pensioners will now move to a full pension, and some people who are currently ineligible for a pension, because they are over the assets test cut-off point, will be eligible to start claiming a part-pension and all the concessions that go with it.

The big news is that every couple who are part-pensioners now should get a $50-a-week increase in their pension, while singles will get $35 a week. These benefits are available only to part-pensioners because they are due to a change in the taper rates - not to an increase in the amount of pension payable.

The assets test cut-off points will change too.

The lower level at which the pension starts to reduce has gone up from $419,000 per couple ($280,000 for singles) to 451,500 and $301,750 respectively.

The upper level at which eligibility for a pension cuts off moves from $954,000 for a homeowner couple to $986,500, and for singles the numbers go from $634,750 to $656,500.

The new numbers also increase the amount pensioners can earn before their pension starts to reduce under the income test. For a couple, the income test cut-off point rises from $336 a fortnight to $360 a fortnight - for singles it increases from $190 a fortnight to $204 a fortnight.

Deeming rates remain at generous levels: between 0.25 per cent and 2.25 per cent. The government promised a year ago that these would be frozen until July 1, 2024, but thresholds have been increased slightly in line with inflation, which will have a small benefit to all income-tested pensioners.

An important thing to note is the way the tests intersect. Centrelink tests you on both the income test and the assets test, and then applies the one that gives you the least pension. But the tests tend to be out of kilter, which can lead to some anomalous results.

For example, if you're asset-tested, deeming is not relevant - it's only used for the income test.

Furthermore, the rule that a pensioner couple will start to lose pension once income reaches $360 a fortnight does not affect an assets-tested pensioner.

Think about Jack and Jill, who own their home and have $600,000 in total assessable assets, of which $550,000 are financial assets and subject to deeming. The couple are subject to the assets test and their pension will rise from $530 a fortnight to $580 a fortnight each after June 30.

Because they are assets tested, they can earn $36,000 a year with no adverse effect on their pension. Under the proposed adjusted deeming rules, their $550,000 in financial assets would be deemed to be earning $10,000 a year, which gives them space to earn an additional $26,000 a year with no effect on their pension.

If you go to my website, www.noelwhittaker.com.au, you can download the new pension charts and also play with the age pension calculator and the deeming calculator, both of which have been updated with the new numbers.

Many pensioners deprive themselves of future income by overvaluing their personal positions. Do not value your furniture as if you had to replace it. The value of your furniture should be only what you would get for it if you sold it in a garage sale on a wet Saturday morning.

This puts $5000 - tops - on most people's furniture. For assets-tested pensioners, every $10,000 reduction in assets is worth about $15 a week in extra pension. So by investing $15,000 in a funeral bond and giving $10,000 to charity or your kids, your pension could be increased by $37.50 a week. That's a 7.8 per cent guaranteed return on your money.

Whatever your situation, as the rules change it is a good idea to review your position and see if a few small changes could your cashflow.