March 2023 Centrelink threshold changes and what it means for you March 7th, 2023
Netplan premium subscribers are amongst the first to know of a significant increase in Centrelink thresholds to apply from March 20.
Now’s the time to re-check your asset values and perhaps, think about re-assessing their current valuations if you’re close to the new increased thresholds.
That particularly applies if your benefit is affected by property values.
This change is all thanks to the six monthly increase in Centrelink payments and that’s because of Australia’s rocketing inflation rate. Since the last September Centrelink increase, payment rates are up by more than 3.6 percent.
New Pension Rates
The full rate of single pension now rises by $37.50 a fortnight to $1,064.00. For couples, each partner will see a rise of $28.20 each, lifting the combined couple’s rate from $1,547.60 to $1,604 a fortnight. For singles, the total maximum annual pension is now $27,664 and for couples, $41,704.00 per annum.
Don’t forget that there’s another increase due in September this year as well.
Significantly, these rate rises effectively lift the upper means test thresholds where your pension is cancelled altogether. It also means that people that may have just missed out previously, now might qualify.
And remember, if you get a part-pension and you also collect the Pension Concession Card which can save you thousands of dollars each year in medical, government and other fees and charges.
There are two means tests used and the means test that generates the lowest pension payable, is the one that Centrelink will latch onto.
New Income Test thresholds from 20th March, 2023
Under the income test, the income free area of $190 a fortnight for singles combined $336 doesn’t change. What does change, is the upper cut-off limit.
For singles, that’s now $2,318 per fortnight, effectively meaning a single can earn $60,268 per annum of Centrelink assessable income and still keep a part-pension. On top of that, there’s the $300 a fortnight you can earn from employment income and that’s also ignoring the extra $4,000 employment-earnings boost for this calendar year.
For couples, the combined upper fortnightly income-test limit lifts to $3,544 per fortnight or a reasonably generous $92,144 per annum. And just a reminder that combined, means that this income could be earned by just one member of a couple. Again, you can also each access the $300 working bonus but this figure can’t be rolled into one income earner.
New Asset Test thresholds from 20th March, 2023
Under Centrelink’s asset test, there’s been a sizable increase in the upper-cut off thresholds.
For a single home-owner, The upper cut-off level is now $634,750 or an increase of $12,500. For home-owning couples, the upper limit jumps by $19,000 to $954,000.
Remember that for most of us, this figure excludes the value of your primary dwelling no matter its value, providing the land area is less than 2 hectares or about 5 acres under the old currency.
Non-home-owners whether single or a couple combined are allowed an extra $224,500 which seems a little at odds with what a home would actually cost you to buy.
Don’t become too complacent.
There’s going to be a BIG increase for part-pensioners in July, when the lower thresholds are increased. In effect, that will capture an entire year’s worth of Consumer Price increases and it’s highly likely that a home-owning couple with more than $1 Million in assets other than their family home, will still be entitled to a part-pension form Centrelink.