What is the cut-off limit for Centrelink benefits?
The Centrelink means test consists of the Income Test and the Assets Test. The test which results in the lowest entitlement is the one which applies. Each test has cut-off limits and different limits apply to different types of benefits. In this Money Insights® Fact Sheet, we focus on Newstart Allowance and the Age Pension. All figures are current as at 21 January 2014.
The eligibility criteria for Newstart Allowance
You may get Newstart Allowance if you are aged 21 or over and under Age Pension age (i.e. 65), are unemployed, and satisfy the Activity Test as well as the Income and Assets Tests.
The Income Test for Newstart Allowance
The income test limits are:
For full allowance
For part allowance
Single, no children
up to $62
less than $942.50
Single over 60
(after nine months)
up to $62
less than $1,022.50^
up to $62
less than $860.00
- Fortnightly income between $62 and $250 reduces fortnightly allowance by 50 cents in the dollar. For income above $250 per fortnight, fortnightly allowance reduces by 60 cents in the dollar. Partner income which exceeds cut-out point reduces fortnightly allowance by 60 cents in the dollar.
- These figures may be higher if you are eligible for Pharmaceutical
Allowance or Rent Assistance. Child maintenance is not included as income for the personal income test.
- This figure includes Pharmaceutical Allowance.
The Assets Test for Newstart Allowance
Newstart Allowance is not payable if assets exceed:
Activity Test for people aged 55+
What is deeming?
Activity Test for people aged 55+
To qualify for Newstart Allowance you must prove to Centrelink you are actively seeking paid work, or retraining yourself or doing acceptable voluntary work.
The eligibility criteria for the Age Pension
You may get Age Pension if you are aged 65 years and over, and your income and assets are below a certain amount.
The Income Test for Age Pension
For full payment
For part payment
up to $156
less than $1,810.20
up to $276
less than $2,769.60
- Income over these amounts reduces the rate of pension payable by 50 cents in the dollar (single) or 25 cents in the dollar each (for couples).
# These figures may be higher if you also get Rent Assistance with your payment.
The Assets Test for Age Pension
For full pension
For part pension#
up to $196,750
less than $748,250
Partnered (combined) up to $279,000
less than $1,110,500
up to $339,250
less than $890,750
Partnered (combined) up to $421,500
less than $1,253,000
# Limits will increase if Rent Assistance is paid with your pension.
- Assets over these amounts reduce pension by $1.50 per fortnight for every $1,000 above the limit (single and couple combined).
Income only partially assessed by Centrelink?
- Income from allocated pensions, account based pensions, term allocated pensions and complying pensions.
- Income from other investments which earn in excess of the deeming rate.
What is deeming?
Centrelink assesses your income from financial assets (e.g. bank accounts and shares etc) not by the actual income you receive but by deeming. Centrelink deems you to earn
2.0% p.a. on the first $46,600 (single) or $77,400 (couple) of financial assets and 3.5% p.a. on all financial assets above that level. Retirement income streams are not yet subject to deeming.
What’s not assessed as an asset by Centrelink?
You might currently exceed the assets cut-off limits, however it’s possible you could arrange your finances to pass the assets test. That’s because there are a number of key assets which are not assessed. They are:
- Your home… and renovations you make to it.
- Money you have in – or roll over into – a super fund while you are less than Age Pension age.
- If you are Age Pension age and your partner is not, then any money your partner has in – or rolls over into – a super fund won’t count as long as they remain under Age Pension age and have not commenced an income stream with the funds.
- Half of the money you have invested in a term allocated pension or complying pension/annuity – as long as it was purchased after 19 Sept 2004 but before 20 Sept 2007
– is not counted as an asset. Money invested into these investments after 19 Sept 2007 is fully assessed as an asset.
- All of the current value of a complying pension/annuity which was purchased prior to 20 Sept 2004.
- Money you have paid as an Accommodation Bond at an age care facility.
- Money you have paid into a Funeral Bond (up to $11,750).
- The difference between the insured value and the garage sale value for your car and home contents may not be assessed.
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Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial advice relevant to your circumstances before making investment decisions. Where a particular financial product is mentioned you should consider the Product Disclosure Statement before making any decisions in relation to the product. Whilst every care has been taken in the preparation of this information, Australian Unity Personal Financial Services Ltd does not guarantee the accuracy or completeness of the information. Australian Unity Personal Financial Services Ltd does not guarantee any particular outcome or future performance. Australian Unity Personal Financial Services Ltd is not a registered tax agent. If you intend to rely on any tax advice in this document you should seek advice from a registered tax agent. Australian Unity Personal Financial Services Ltd ABN 26 098 725 145, AFSL & Australian Credit Licence No. 234459, 114 Albert Road, South Melbourne, VIC 3205. This document produced in November 2013. © Copyright 2013.