From 20 September 2024, the maximum rate of the Age Pension has increased by $28.10 (single rate) and $42.40 (combined rate) per fortnightly instalment period. The Age Pension is increased each 20 March and 20 September.

The maximum fortnightly rates which will apply on and from 20 September 2024 are

• Single Age Pension Rate - $1,144.40 (previously $1,116.30) and

• Partnered Age Pension Rate (combined) - $1,725.20 (previously $1,682.80).

The Partnered Age Pension Rate (combined) is the maximum rate payable if each partner is entitled to the age pension).

The actual pension rate payable depends on the application of both incomes test and the asset test. Additionally, the actual pension rate may be adversely affected if the pension recipient is absent from Australia for a period greater than 6 weeks.

The indexation of the age pension is by reference to the increase in the Consumer Price Index or the increase in the Pensioner and Beneficiary Living Cost Index (which ever is the greater). The increased rate is then benchmarked against MTAWE for the previous May (in the case of the 20 September adjustment) and the previous November (in the case of the 20 March adjustment). The benchmarking is to ensure that the adjusted rate is not less than 25% of MTAWE.

In case you are wondering what MTAWE is – well it is the estimated figure of “Male Total Average Weekly Earnings” determined by the Australian Bureau of Statistics.

Finally, the adjusted and benchmarked amounts are then rounded to the nearest multiple of $2.60.

The increase in the maximum age pension will have a flow on effect on the Pension Disqualifying Income Limits which, on and from 20 September 2024, increase to $2,500.80 per fortnight (previously $2,444.60) for individuals receiving the age pension at the single rate and $3,822.40 per fortnight (previously $3,737.60) for individuals receiving the age pension at the partnered rate (both eligible for the age pension).

The Pension Disqualifying Income Limit is the amount of fortnightly income which will disqualify an individual or a couple from receiving even part age pension due to their income.

Similarly, the increase in the maximum age pension will have a flow on effect on the Pension Disqualifying Asset Limit which, on and from 20 September will increase for the following situations:

• Single, homeowner increase to $695,500 (previously $686,250)

• Single, non-homeowner increased to $947,500 (previously $928,250)

• Couple (combined), homeowners increased to $1,045,500 (previously $1,031,000)

• Couple (combined), non-homeowners increased to $1,297,500 (previously $1,283,000)

The Pension Disqualifying Asset Limit is the value of assets which will qualify an individual or a couple from receiving even a part age pension due to their assets.

Why not give Humble Goode Financial if you are interested in learning more about how this change will affect your pension. We are always available to discuss your options and will provide balanced advice in a timely manner. 

Original Source: https://www.supercentral.com.au/resource-centre/newsletters/supercentral-news/age-pension-rates-increased/

General Advice Warning:

The information on this website is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product.