Changes to the Centrelink Pension Income Test

From 20th September 2009, a number of changes will occur to the Income Test used to determine the rate of pensions by Centrelink. All in all, while the changes should provide a larger pension to many Australians, the use of transitional rules for the forseeable future will make assessing your Centrelink entitlement more complicated.

As widely publicised, the pension rate will be increased. The full single pension rate will increase by $65 per fortnight, and the full couples rate will increase by $20.30 per fortnight combined. However, this is somewhat offset by the increase in the Income Test taper rate. From 20th September, the rate at which excess income affects the pension will increase from 40 cents in the dollar to 50 cents in the dollar for singles and from 20 cents in the dollar to 25 cents in the dollar for each member of a couple.

Transitional arrangements will occur if the pension paid under the pre-20th September rules (lower maximum rate, lower Income Test taper) is greater than the pension paid under the post-20th September rules (higher maximum rate, higher Income Test taper) so that no pensioner is disadvantaged under the new rules.

There are a range of other Centrelink changes occuring from 20th September 2009;

  • gradual increase in the Age Pension age to 67
  • the new “Work Bonus” – half of the first $500 of fortnightly employment earnings for Age Pensioners is disregarded from the Income Test
  • closure of the existing Pension Bonus Scheme to new entrants
  • some consolidation of existing pension add-ons (Telephone Allowance, Utilities Allowance, Pharmaceutical Allowance)

These changes potentially make understanding the workings of the Age Pension more complicated. Our Centrelink expertise can assist you to understand how these changes impact you.

This website contains general advice which does not consider your particular circumstances. You should seek advice from Wakefield Partners who can consider if the general advice is right for you.