If you have retired or are fast approaching retirement and are a citizen of Australia, it is time you gathered information about the Australian Pension Assets Test System. Millions of Australians are now part of the pension system and are enjoying the benefits. However, as not everyone is eligible to get the pension, you must first learn about the basics of the pension assets test and assess their eligibility.
The Australian Pension Assets Test
The Government performs the assets test to determine the eligibility of the applicant once they have reached the qualifying age for the Government Pension. Specific questions are asked in the test to judge your personal situation and eligibility.
The pension is offered to the needy while considering few factors. It includes property, car, retirement income accounts, investments, shares, term deposits, and bonds. The test also considers assets such as private trusts and private companies, as well as any deposits you might’ve paid to live for retirement. Any cash gifts or assets you might’ve given or any prepaid funeral arrangements you might’ve made are also inquired upon.
The papulose behind those questions is to learn about your exact assets and their impact on your personal situation and finance. The information gathered based on the Australian pension assets test decides your eligibility and how much pension you should get. People are anxious about how much land they own and still get the pension. They are also keen to know as to what kind of assets are exempted from the Australian pension test.
Exempted assets from the test
Certain assets are exempt from the Australian pension assets test, and these include properties larger than 2 hectares, your primary residence, and accommodation bonds when you move into residential aged care, and any estate or wealth left to you in an estate. Any money you get from the National Disability Insurance Scheme is also exempted from the Centrelink age pension income.
If you have a home you live in and on less than 2 hectares of land, it won’t be counted as an asset. However, owning a home could still impact your chances of getting the pension because the Government sets different asset limits for homeowners and non-homeowners. Thus, the ownership of your house, your marital status, and the difference in asset value could lead to your pension being reduced or canceled.
Thus, one must be very clear about their assessable pension assets before giving the test and how some assets can reduce the chances of pension payments. The Australian pension assets test applies to all pensions and only applies when a person’s assets exceed certain areas for a full pension. Hence, the final pension entitlement assessment is based on a care receiver’s pension’s assets test, assets-free areas, and asset disposal.
If the person’s assets don’t exceed their assets-free area, the excess is considered nil, and if it exceeds. The difference is seen as the assets excess is checked appropriately to help the needful old age people. . From 1 January 2017 onwards, every $1,000 excess in assets reduces the pension rate by $3 per fortnight.
It is best to seek legal and expert guidance on such matters as it can be difficult to know what is included and what’s not in your property assessment when taking the Australian pension assets test. Look for an expert and experienced financial advisor who can offer you the right advice. Hence, if you are retired or approaching retirement, you may need to make some life-changing decisions, and the decisions you make now will impact the quality of the rest of your life.