Assets and the Age Pension – what you need to know


How can your assets affect your pension payments?

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Key Points


  • Personal assets are anything you own in your name or joint names.
  • The value of assets affects Age Pension eligibility and payments.
  • Some assets count towards the assets test only, and others count towards both the assets and income tests.

It can be difficult to understand how your assets might affect your retirement income. There are many ways of defining assets—personal assets, assessable assets, and deemable assets—and there can be a lot at stake if you misunderstand or inadvertently misreport.

We take a closer look at personal assets and how they are viewed when it comes to Age Pension entitlements.

What are personal assets?


Broadly speaking, personal assets cover anything an individual or household owns in their own name, or joint names (such as money, investments, cars, insurance, works of art and more).

Centrelink assesses your Age Pension eligibility in two ways using both an income and an assets test. Importantly, some assets count towards the assets test only, and others are taken into consideration for both the assets test and are then also deemed to contribute towards your total income.

For the purpose of planning or managing retirement income, it’s easiest to understand personal assets as either financial investments or personal assets.

Financial investments (assessable and mostly deemable)


These are financial assets assessed by Centrelink to establish whether you meet the required assets threshold for the Age Pension. Most of these assets are also deemed to earn income, which will be used in your income assessment for the Age Pension as well. Such financial investments include:

  • Cash on hand
  • Bank accounts
  • Term deposit accounts
  • Managed investments
  • Shares and securities
  • Superannuation
  • Annuities and income streams.

Personal assets (assessable and not deemable)


Separately, you may have personal assets which are not deemed, but can still be assessed under the assets test.

Such assets include:

  • Home contents (e.g., furniture and appliances)
  • Personal effects (e.g., jewellery and laptops)
  • Licences (e.g., taxi and commercial licences)
  • Surrender value of life insurance policies
  • Collections
  • Motor vehicles, caravans, and boats.

The asset that is the exception to the rule, and does not need to be declared, is your primary residence. Your home is not assessable, regardless of valuation.

All assets must be declared on your Age Pension application. But there are tips and traps of which you should be aware.

The actual value of your items is their market value (i.e. if you had to sell them all in a garage sale tomorrow) as opposed to replacement value. What would they really fetch? Most people do not have more than $10,000 of furniture and personal effects – but many will place a sentimental value which is much higher on their Age Pension application. This can end up costing them money, as it could reduce their Age Pension entitlements.

Another common misconception is that Centrelink will update your assets declaration with annual depreciation. It does not. You will need to do this. It can be a very worthwhile exercise because, if, say, your car depreciates, the total value of your assets will also reduce. As long as you report this, you might then qualify for a higher pension payment.

As household costs continue to increase, it’s important to stay up to date on your entitlements and ensure you are maximising your fortnightly payments.


Source: Retirement Essentials


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