As for many Australian retirees, the Centrelink Age Pension would mean added financial support for them. However, how much you earn, or if you are eligible at all, is contingent on many criteria, including income testing and asset testing. If you have $60,000 in savings, knowing how this will affect your pension eligibility in 2025 is very important.
Age Pension eligibility requirements are set in 2025.
To become eligible for an Age Pension in 2025, one must have attained the qualifying age of 67. Apart from qualifying age, you also need to conform with the residency criterion, which in all normal accounts, means, that you have been a resident of Australia and living within the bounds of that nation for the last ten years, and five years of that period should be counted as a continuous basis.
Another of the three components establishing your qualification is the means test, consisting of two tests – the assets test and the income test. The two tests ascertain how much aid one is entitled to receive from Centrelink. Hence, either test can impact how much you can receive.
Understanding the Assets Test
The assets test takes stocks of everything the age pensioner can own and may provide a pension based on that. Your main home is not considered an asset, while everything else-real estate, cars, saving accounts, investments, and personal possessions-is considered.
By 2025, a single homeowner could have assessable assets up to $314,000 and receive a full Age Pension. A single non-homeowner can have up to $566,000. The couples’ limits are higher: $470,000 for homeowners and $722,000 for non-homeowners.
Above these values, a part pension may still be applicable. Limits to receive a part Age Pension from March to September 2025 are upper limits of $697,000 for a single homeowner, $949,000 for a single non-homeowner, $1,047,500 for a couple homeowner, and $1,299,500 for a couple non-homeowner.
Pension Affects Due to $60,000 in Savings
Savings are categorized as a financial asset under the assets test. Thus, if you are a single homeowner with $60,000 in savings, the total value of your other assets must stay below $254,000 to be eligible for the full Age Pension. Should you be a single non-homeowner, with $60,000 in savings, your other assets must be less than $506,000.
In the case of couples who own their home with $60,000 in joint savings, their other combined assets must remain below $410,000 for them to get a full pension. Non-homeowner couples with $60,000 in savings can count other assets up to $662,000.
Once your assets go over the limit for a full pension, the payment will start getting reduced. The reduction of payment is given at $3 per fortnight for each $1,000 by which your assets exceed the limit. Therefore, if your assets are $30,000 above the full pension threshold, your fortnightly payment will be reduced by $90.
The Income Test and Deeming Rates
In determining the amount of pension you will receive, the income test is equally important. Centrelink applies deeming rules to determine the income you earn from financial assets, be it a bank account or investments.
In 2025, deeming rates for single pensioners will be 0.25% on the first $60,400 of financial assets and on any amount exceeding that, it will be 2.25%. Therefore for couples, the first $100,200 would be deemed at 0.25% and anything over that limit would be at 2.25%. The income received from your savings of $60,000 is, therefore, minor and unlikely to push you past the income limit on its own unless you have other sources of income.
How to Maximize Your Pension Entitlement
If your savings or any other asset brings you close to the eligibility threshold, there are legal ways and certain strategies available to reduce your assessable assets. One option is to set up a gift: A gift in a sum up to $10,000 in a financial year, applying for a total of $30,000 over five years, is permissible. Any amount above limits will be treated as an asset for five years.
Another alternative is to invest in improvements to the home, which would not count toward the assets test. You can also pay for pre-arranged funeral expenses or use the funeral bond, in conjunction with the allowable amount, to decrease your assessable assets.
Conclusion
In terms of the Age pension payment in 2025, $60,000 in savings will not automatically disqualify you from receiving the Age pension. Whether or not you qualify will depend on other assets you may have, if you own your own home, or other sources of income. The understanding of both assets and income test will guide you on your eligibility. If you want any advice of the utmost worth, you could contact Services Australia or a licensed financial advisor.