Age Pension to increase from 20 March 2021
This month, Centrelink released new benefit and payment rates for the Age Pension, effective from 20 March 2021. Single clients receiving the maximum Age Pension will benefit from an increase of $8.40 per fortnight and partnered clients will each receive an increase of $6.30 per fortnight. As a result of this increase the means test disqualifying rates have also increased.
New maximum pension rates
Changes to payments rates will effect the Age Pension, Disability Support Pension (except if aged under 21 without children), Carer Payment, Aged Service Pension, Invalidity Service Pension and Partner Service Pension.
|Marital status||Base pension rate |
Maximum pension supplement and energy supplement
|Maximum pension |
|Maximum annual pension|
|Pensioner couple (each)||$654.50||$63.60||$718.10||$18,670.60|
|Pensioner couple – separated by iIlness (each)||$868.30||$84.40||$952.70||$24,770.20|
Clients who were previously not entitled to a benefit and were marginally above the upper income and/or asset test threshold may now be entitled to a benefit which could also entitle them to a Pensioner Concession Card.
Now is good time to review your clients who may have previously just missed out on the Age Pension and assess their eligibility again.
New pension disqualification limits from 20 March 2021
Asset test disqualification limits
|Marital status||Asset disqualification limit|
|Pensioner couple (combined)||$1,095,000||$880,500|
|Pensioner couple – separated by illness (combined)||$1,251,500||$1,037,000|
The lower asset test threshold being the amount of assets from which entitlements begin to phase out remains unchanged.
Income test disqualification limits
|Marital status||New income disqualification amount|
|Pensioner couple (Combined)||$3,188.40|
|Pensioner couple–Illness separated (Combined)||$4,126.80|
The lower income threshold being the amount of income from which entitlements begin to phase out remains unchanged.
New maximum pension falls short of a modest lifestyle
Despite this small increase, the new maximum Age Pension falls short of a modest or comfortable lifestyle based on the Association of Superannuation Funds Australia (ASFA) estimated budgets for various households and living standards for those aged around 65.
|Age Pension||Modest lifestyle*||Comfortable lifestyle*|
To this end clients cannot rely solely on an Age Pension to achieve a modest or comfortable lifestyle and will likely need to draw on personal savings to achieve their desired way of living.
If you’d like more information, please speak to your IOOF Client Solutions Manager.
For more information on the assumptions and methodology of ASFA Retirement Standard please see their ‘Detailed budget breakdowns – December quarter 2020’.