Pensions to change on January 1

Changes to the age pension assets test take effect from January 1. Those who are income tested will not be affected.

For a single home owner, the base will rise from $205,500 to $250,000 and for a home owner couple it will rise from $286,500 to $375,000. The upper cut-off points will be around $547,000 for single home owners, and $823,000 for home owner couples.

This will hit retirees with substantial assets hardest.

An age pensioner home owner couple with $750,000 of assessable assets should be receiving about $620 a fortnight pension. Under the new rules, this will drop to about $220 a fortnight - a loss of $10,400 a year.

The Centrelink rules allow gifts of only $10,000 in a financial year, with a maximum of $30,000 over five years. Using these rules a would-be pensioner could gift $10,000 before June 30 and $10,000 just after it, and so reduce their assessable assets by $20,000.

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