The Federal Government has announced the upcoming changes to the Centrelink Age Pension that will come into effect later this year. Changes are expected to impact thousands of older Australians. These changes were announced in the Centerlink Age Pension welfare review. The adjustments, intended to reflect the cost of living, are aimed to provide greater financial stability for the retirees.
Pension Payments Set to Increase in September
Starting September 2024, eligible pensioners will see a small uptick in their payments. This increase will be a result of the pensioners payment biannual indexation that will increase either the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index. The changes are expected to help older Australians afford the rising costs of groceries, utilities, and housing.
Income and Asset Test Thresholds Adjusted
In accordance to the payment increase, the Government has also increased income and asset test thresholds, that will determine the eligibility for Age Pension. Along with increasing the income and asset test thresholds, the Government has also increased the eligibility limits. These moves could further increase the payment cap for the part-pensioners, while also allowing ineligible applicants, now eligible to apply.
Who is Eligible for the Age Pension in 2025?
The eligibility conditions remain more or less the same. Australians must be 67 years or older to apply, and must fulfill the residency and means test criteria. Applicants must have resided in Australia for a minimum of 10 years, including 5 years continuous, to satisfy the residency requirement. Centrelink is still processing claims using a more readily available online and in-person claim filing system, still assessing claims individually.
Impact on Australians Retiring from Work
Welfare advocates have praised the increases, but argue the amount still lags below what is essential to meet the increasing level of basic the needs of living. Advocates claim older Australians living on fixed incomes remain particularly exposed to rents and to healthcare costs. Government representatives, on the other hand, argue the changes strike a sensible compromise between economic and fiscal sustainability and the support required for an ageing society.
Preparing for the Shift
Pensioners and those nearing the retirement age have been urged by their financial advisers to evaluate their entitlements in light of the changes coming in September. Grasping the relationship between income, assets, and other incomes, particularly pension payments, is crucial for those working part-time or have moderate savings. Centrelink has actively recommended that seniors consult their online calculators and obtain personalized advice when required.
