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Assets Test for partnered pension customers 108-03010100

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Rates

Guide to Australian Government payments

Examples and historical information

Asset Test rate calculation example and historical data

This table describes how to use the Assets Test to work out a customer's member of a couple pension rate and contains the historical rate information that existed immediately prior to 20 September 2007.

These amounts may not be current. They are examples only. For current payments, see Rates and thresholds.

Item

Description

1

Example of Assets Test rate calculation

For pension customers, their asset tested rate is compared to their income tested rate and the lower rate paid.

Manual calculation (using annual rate):

Zuberi and Kesi have assets to the value of $675,100 and are Homeowners. For the purposes of this example, the asset free area amount is $375,000 and the maximum pension rate is $17,191.20 each.

  1. Work out the excess assets
    Couples total assessable assets $675,100 minus the Homeowner couple assets free area of $375,000 = $300,100.
  2. $300,100 is excess for the couple, so half that - Zuberi's excess = $150,050
  3. Rounded down to nearest $250 = $150,000 (Note: halve combined assets before rounding down)
  4. Annual reduction = $150,000 x 19.50/250 = $11,700 (each)
  5. Annual rate = Maximum less reduction = $17,191.20 - $11,700 = $5491.20 (each)
  6. Fortnightly rate = $5491.20 / 26 = $211.20 (each)
  7. Minimum rate: if the rate is more than nil but less than the minimum, the minimum rate ($35.00 singles, $24.60 each member of a couple) applies

2

Rate calculation 20 September 2007-31 December 2016

For pension customers, their asset tested rate is compared to their income tested rate and the lower rate paid. Note: this rate calculation may not reflect current rates or limits and is for example purposes only.

Non-homeowner couple

  • Jeff and Susan have assets to the value of $425,500
  • Combined non-homeowner's assets free area used in this calculation is $412,500 and the maximum rate is $15,844.40

As value of assets is over the assets free area, the difference = $425,500 - $412,500 = $13,000 ($6,500 each)

Rounded down to nearest $250 = $6,500

Reduction = ($6,500 x 9.75) / 250 = $253.50 (each)

Maximum per annum pension rate less reduction = $15,844.40 - $253.50 = $15,590.90 (each)

Fortnightly pension rate = $15,590.90 / 26 = $599.65 (each)

3

Rate calculation prior to 20 September 2007

Prior to 20 September 2007 the rate of pension payable was reduced by $3.00 per fortnight for every $1,000 dollars of assessable assets above the pension assets free area.

Determine pension reduction amount per annum:

  • Pension reduction amount = Excess assets (as per Step 5 of Detail, rounded down to nearest $250) x 19.50, then divided by 250

To convert to a daily amount divide result by 364 (not 365).

For historical thresholds for pensioners, see Policy link on the References page.