Millions to get more Age Pension starting from 20 March 2024

Government Age Pension payments increased on 20 March, so if you’re one of the millions of eligible Australians, you’ll have a little more to spend.

The increases are designed to help address inflation and cost of living increases. Here’s what happened.

Age Pension payments increase in March 2024 due to indexation

Here are the maximum Age Pension payment rates that came into effect from 20 March, which are paid fortnightly, along with their respective annual equivalents. Single payments rose by $19.60 per fortnight, while combined payments for couples increased by $29.40.

Maximum Age Pension payments from 20 March 2024

  Fortnightly* Annually*
Single $1,116.30 $29,023.80
Previous payment $1,096.70 $28,514.20
Couple (each) $841.40 $21,876.40
Previous payment $826.70 $21,494.20
Couple (combined) $1,682.80 $43,752.80
Previous payment $1,653.40 $42,988.40

*Includes basic rate plus maximum pension and energy supplements

The payment rate increased 1.8%, indexed to inflation. Payments last increased in September 2023 and are likely to change again when they are next assessed this coming September.

Tip: Depending on how much super you have, you may be eligible to receive Age Pension payments in addition to income from your super savings.

Income and assets test thresholds increase for the Age Pension

The government reviews the Age Pension income and assets test thresholds in July each year. The upper thresholds also increase in March and September each year in line with Age Pension payment increases.

Whether you are eligible for the Age Pension depends on your age, residency and your income and assets.

If your income and assets are below certain limits (also known as thresholds), you may be eligible.

When determining how much you’re entitled to receive under the income and assets tests, the test that results in the lower amount of Age Pension applies.

Following are the income and assets test thresholds that apply as at 20 March, compared with previous thresholds.

Assets test thresholds comparison

The lower assets test threshold determines the point where the full Age Pension starts to reduce, while the upper assets test thresholds determine what the cutoff points are for the part Age Pension.

If the value of your assets falls between the lower and upper assets test thresholds, your entitlement will reduce.

The higher your assessable assets, the lower the amount of Age Pension you are eligible to receive.

Your family home is exempt from the assets test but, your investments, household contents and motor vehicles may be included.

Asset test thresholds from 20 March 2024

  Full Age Pension limit Part Age Pension cutoff
Single – Homeowner $301,750 (unchanged) $674,000
Previous threshold $301,750 $667,500
Single – Non-homeowner $543,750 (unchanged) $916,000
Previous threshold $543,750 $909,500
Couple (combined) – Homeowner $451,500 (unchanged) $1,012,500
Previous threshold $451,500 $1,003,000
Couple (combined) – Non-homeowner $693,500 (unchanged) $1,254,500
Previous threshold $693,500 $1,245,000

 

Income test thresholds comparison

The lower income test threshold determines the point where the full Age Pension starts to reduce, while the upper income test threshold determines what the cutoff point is for the part Age Pension.

Income includes things like payment for employment or self employment activities, rental income, and a deemed rate of income from financial investments such as managed funds, super (if you are over the Age Pension age) or account-based pensions commenced after 1 January 2015.

Income doesn’t include things like emergency relief payments.

Income test thresholds from 20 March 2024

  Full Age Pension limit Part Age Pension cutoff
Single $204 per fortnight (unchanged) $2,436.60 per fortnight
Previous threshold $204 per fortnight $2,397.40 per fortnight
Couple (combined) $360 per fortnight (unchanged) $3,725.60 per fortnight
Previous threshold $360 per fortnight $3,666.80 per fortnight

If you have income between the lower and upper income test thresholds, your entitlement will reduce as your level of income rises.

For example, the Age Pension payment for a single person earning more than $204 per fortnight will reduce by 50 cents for each dollar earned over $204.

For a couple earning more than $360 per fortnight combined, the Age Pension payment for each person will reduce by 25 cents for each dollar earned over $360.

Tip: The Work Bonus may allow you to receive more income from working, without reducing your Age Pension.

The maximum Work Bonus balance that you can accrue is $11,800.

Source: Colonial First State

Kalpa Wealth Management