Changes to the Centrelink assets test from 20 September 2007 could see an increase in your age pension.

There are two key asset test changes.

1. A reduction in the ‘taper rate’ so that you can have up to $176,000 more in assets and still be entitled to a pension.
   
   The aim of this is to give you an incentive to accumulate more assets to fund your own retirement.
   
   Before 20th September, if you are single, own your home and have more than $166,750 in assets, you lose $3 from your pension each fortnight for every $1,000 in assets over $166,750 you have. If you had $343,750 in assets, you would lose your pension entitlement altogether.
   
   Under the new rules, that $3 would become $1.50, so you could have up to $520,000 in assets before losing your pension entitlement.
   
   A couple could have up to $825,500 between them and still claim some pension.
   
   
2. To balance the benefit of the new taper rates, after 20 September 2007, 100% of assets invested into ‘complying income streams’ will be included in the assets test.
   
   A ‘complying income stream’ is a government-approved product that can be used to increase the likelihood of being eligible for the age pension. One of the features of a complying income stream is that you cannot withdraw lump sums.
   
   At the moment, only 50% of amounts invested into complying income streams count under the assets test. This means you can exempt more assets from assessment than if you invested in other products.
   
   The new rules remove this exemption for people who invest in complying income streams after 20 September 2007. If you’re already investing in a complying income stream, you’ll retain that benefit.

The new rules are complex, and you should consider getting professional financial advice so you don’t lose the chance to claim the pension for the first time or increase the amount you currently receive. It’s also important that if you have high levels of assets you understand the rules so you can make the choices that best suit your circumstances.