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 Fact Sheet, we focus on JobSeeker Payment and the Age Pension. All figures are current as at 1 July 2020.

Eligibility for JobSeeker Payment

You may get JobSeeker Payment if you are aged 22 or over and under Age Pension age, are unemployed, and satisfy the Activity Test as well as the Income and Assets Tests.

The Income Test limits for JobSeeker Payment

* Fortnightly income between $106 and $256 reduces fortnightly allowance by 50 cents in the dollar. For income above $256 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 JobSeeker Payment

Activity Test for people aged 55+

To qualify for JobSeeker Payment 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 65.5 years and over, and your income and assets are below a certain amount. Age pension age will increase to age 67 by July 2023. (see table over page).

The Income Test for Age Pension

* 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

# Limits will increase if Rent Assistance is paid with your pension.

* Assets over these amounts reduce pension by $3.00 per fortnight for every $1,000 above the limit (single and couple combined)

Which types of income are only partially assessed by Centrelink?

  • Income drawn in excess of the deductible amount of some annuities, grandfathered income streams such as some allocated/account based pensions, term allocated pensions and complying pensions.
  • Income drawn on new and non-grandfathered income streams up to the amount of income deemed by Centrelink (NOTE: income drawn in excess of the deemed amount is not assessed by Centrelink).

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 0.25% p.a. on the first $53,000 (single) or $88,000 (couple) of financial assets and 2.25% p.a. on all financial assets above that level. NOTE: Account based pensions (ABP) that commenced on or after 1 January 2015 are subject to deeming. 

ABPs commenced prior to 1 January 2015, where a person was not receiving an income support payment from Centrelink/DVA before 1 January 2015, will be deemed. For ABPs commenced prior to 1 January 2015, provided that the ABP recipient was receiving an income support payment from Centrelink/DVA immediately before this date and they continue to receive an income support payment, the ABP will continue to be assessed under the old rules (i.e. not deemed).

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:

  1. Your home… and renovations you make to it.
  2. Money you have in – or roll over into – a super fund while you are less than Age Pension age.
  3. 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.
  4. 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.
  5. All of the current value of a complying pension/annuity which was purchased prior to 20 Sept 2004.
  6. Money you have paid as an Accommodation Bond/Refundable Accommodation Deposit at an age care facility.
  7. Money you have paid into a Funeral Bond (up to $13,250).
  8. The difference between the insured value and the garage sale

Increase to Age Pension Age

This information has been produced by Australian Unity Personal Financial Services Ltd (‘AUPFS’) ABN 26 098 725 145, of 271 Spring Street, Melbourne, VIC 3000, AFSL 234459. 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. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. AUPFS is a registered tax (financial) adviser and any reference to tax advice contained in this document is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing in this document represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and AUPFS and its related bodies corporate make no representation as to its accuracy or completeness. Published: July 2020 © Copyright 2020