Pensioners Income Test

Briefly, one of the tests for pension eligibility is the Income Test.
Deemed income on Financial investments is added to Other actual income.
Financial investments include any:
bank, building society and credit union accounts
term deposits
public and private loans
managed investments
listed shares and securities
bonds, notes and debentures
shares in unlisted public companies
gold, silver or platinum bullion
Real Estate
Some pensioners fail the income test due to too much income (Actual plus deemed). Therefore some resort to having an undeclared 'under-mattress stash'.
There is also an assets test, but usually it is the income test that is the concern.
Other than art, are there any assets that are worth buying for their value appreciation and that would not be 'deemed' income on?


  • $80k car with a boot full of eneloops.

  • They'd be tested under the assets test, rather than the income test. The biggest exclusion is your primary residence, but I wouldn't hold your breath that a cap won't be put on it at some point.

  • A high yield investment vehicle?

    Are crypto currencies seen as cash?

  • The Op is wrong

    Actually the biggest issue is the assets test, as you get pinged $3 off your pension for $1000 worth of assets.

    To get the same return on that asset if you choose to keep it you need to get 26X$3. PA = $78 or 7.8% return

    With bank rates at best 3.2% spending "disposing" of the $1K asset gives you the best option

    Whereas the income test only pings you for 3.2% on the deemed income from the asset., which is $32 PA

    • According to DSS (Annual Report 2015-16 which is the latest available) 42% of recipients of the Age Pension receive a part rate due to the operation of the means test.
      17.8% of recipients receive a part rate because of the Assets Test.
      24.1% of recipients receive a part rate because of the Income Test.
      So, in 2015-16 the Income Test was the dominant test.
      The rebalancing of the Assets Test since 1 January 2017 will change these numbers but you may be being a bit harsh calling the OP wrong.

      • since 1 January 2017 will change these numbers …..

        And this is what we are both arguing. My point is valid, as of january the impact is now greatest under the asset test,

        Even Government spin says a minimum of 300K pensionerss are to be impacted by the new ASSET test (not income test)

        The INCOME test never changed (except for a minor adjustment for "inflation")

    • Under the assets test there is no reduction in pension until you have quite a bit of assets. (This excludes the family home)

      Full pension
      From 1 July 2017, pensions will reduce when your assets are more than the amounts below.
      If you're:——————- Homeowners —— Non-homeowners
      single ————————- $253,750 —— $456,750
      in a couple, combined—— $380,500 ——— $583,500

      • So? Your point makes no sense. This is the level when you get no impact on your pension by either asset OR income test.

        Also Home owners ARE impacted as while the total value of their home isnt included per se, they do get a reduced allowance as you indicate.

        • Why are you being so confrontational? These are the Assets under the assets test. Higher assets you lose (Under the assets test).
          Anyway MY Original question is all about financial assets that are deemed income on, and asking about assets that appreciate and are not deemed - for those who have too much income.

        • @Peck: Sorry wasnt meaning to be confrontational, just pointing out, that you really need to research things, hence the "confronting" to make you more aware, that your issue will come from the Assets test.

          Centrelink requires you to update your ASSETS as they increase in value. Gone is the day where you set and forget.

          So hiding your money in assets isnt the way to go.

          The only ASSET that isnt impacted by changes is the home.

          Add a new Kitchen, spare room and you are ok. But buying gold, art etc that appreciates, means your assets will increase over time, and again, the impact will not be as much from deeming, as the asset test is harder and more draconian.

          So again sorry, all I am doing is trying, thru being "aggressive", is to highlight that you will only bring yourself grief if you think you can hide money in assets (except the home) and that deeming is the only issue you face.


  • But if we were to be refugees or even illegal immigrants, money would be thrown to us. However as Australian citizens who have paid all our taxes - worked hard for all these years, my husband who is now 70 is still being asked to provide yet more proof before being able to access even a part pension. How incorrect is this? He can't afford to retire yet as our government won't recognise his contribution to our country over all the decades. Shame on this government.


      This person has money, why do they need the pension?

      Humans, like these "refugees" or "immigrants" you speak of are just ordinary humans like you and me who want to live in Australia. They are not lesser human beings. What the (profanity) is wrong with you.

        • +2 votes

          But the government has clear limits on when you can and cannot get welfare.

          OP is asking how to dodge those limits. #welfare4lyfe

        • @eggmaster: But you were responding to Goosegog, not the OP

          And my point was that you just made emotional BS rather than a rational agrument.

          The OP ws asking what assets they could own that arent included - a fair question. As they have found already there isnt many answers as there aren't. But they like everyone should ask questions

          Keep also in mind Centrelink also has staff who will advise on the best way to "maximise" your pension.

          One thing they do say - based on advice from a pensioner friend, is to buy a new car. As the asset test is based on the resale value of the car. Not the purchase price. And the resale is based on quick sale price.

          And as I tried to point out, its NOT income that creates the issue its the ASSET test.

          Like everyone over time they if they can save and put nest eggs away. Anyone aged has no idea how long they will live, so having reserves helps and can cover expenses like medical costs.

          The alternative is that the system encourages people to spend their money (overseas trips/cruises are the biggest things for pensioners ) . it does nothing to encourage thrift. As an ozbargainer you understand the value of thrift. So you save, you do without to builda nest egg, while others spend and get the benefits at the end.

          These are choices people make, the issue here is that for years the rules were set, then at the end they changed the rules. Sure change them, but grandfathering rules to let people adjust rather than just take those savings that people made.

          You would scream, if tomorrow they increased taxes on YOUR income retrospectively,

          In effect thats what they did here.

          And most pensioners can't now supplement their income except from assets, which struggle to get 3%. which under the asset test is effectively deemed to get 7%.

          Those over 55 struggle to get employment, so someone over 67 struggles even more.

    • Hi

      Few quick things:
      - Yes migrants/illegal do get benefits when they come to Australia under whatever visa classification
      - Yes there is a portion of Australian population who have worked for years, likely did more than 40 hours work per week and aren't able to get any pension benefits.
      - I don't work for the government but I do work within the health system.

      1) You might have heard this before but Australia has a ageing population. 1950s - 7.4 people worked for every 1 retiree, 1980s - 5.1 people worked for every 1 retiree, 2011 - 4.1 people worked for every 1 retiree and it's projected 2.1 people will work for every retiree in 2050s. I am unsure whether I'll have to work until I am 70 and it may be possible, by benefit may get contained by a government department.
      2) Australia is considered by OECD to have a 'zero-declining growth'. Think of a woman who has a top heavy bust, but slim legs. This is our population profile in a nutshell.

      Solutions for the future:
      - Trim pension/unemployment/sickness/disability benefits - unpopular but this will come in a way of either not increase you benefit by index or straight cuts.
      - Increase younger migrant population - we need fresh blood in the system. We won't have enough people working to support people going into retirement. Stop the flow migration will have longer term negative effects in whole society.
      - Government health and ageing services will need to look at ways to redistribute income/pension/benefit to make it sustainable for people who really need it.

      Hope the above helps in someways to understand what is going on.

      • Solution, death duties / inheritance tax. Great for balancing the wealth - especially from those rich enough to hide their income. Sadly this is another 'right thing' that no government would have the ticker to enact.

        • Definitely would raise millions but we need to look at billions in savings to continue our way of life.

  • Pension eligibility age is 67. Gifting rules look back 5 years.
    Please correct me if I am wrong. I have not looked into this too much as too far away for me.
    One strategy could be to use your money to buy your children a home (or pay off their mortgage before you turn 62) and retain an amount of cash money to still qualify for the maximum pension. Then your children could give you back money as you need it as if they were paying back a mortgage.
    This relies a lot on you trusting your children. That I suppose is the element of risk.
    Another strategy could be to buy the most expensive house/penthouse you can afford (to live in) and retain an amount of cash money to still qualify for the maximum pension.
    Of course in both cases use your cash to supplement the pension to fund your lifestyle.

    • Couldn't it be one of the option to deposit a pensioner's savings under the child's name bank savings account and use it as the pensioner's own?

      • It could be however the "child" is normally an adult working and with an income. So whatever that account earns in interest wold be taxed in the child's income and would go on top of the normal income therefore attracting a 34.5 to 47% tax rate depending on the child's income.
        So I suppose that tax would have to be reimbursed to the child by the pensioner parent.
        Ah, and don't forget that one day the child could turn up with a new Porsche that your account has paid for 😲. Sorry dad 😂

      • I don't think they thank you for it, as it increases their income tax. Unless, of course, there's something in it for them, they are not going to shoulder the burden of tax. Also there has to be trust or you might find them declaring the money as theirs to spend.

        • And children can have partners, who if they split aren't going to worry that its "yours" so can take half of what the partnership has - ie half of your the money being held by your child. Need to be prepared for that risk

  • Unless you're close to retirement, I'd say forget about the pension and rely on thyself.
    It won't be long before the value of your own home is capped which will drastically reduce the amount of pension you receive and the number of pension recipients.
    Unless of course our life expectancy drops to 70, then all will be rosy.

    • Yes I agree, but some older retired people did not have the money/education/shrewd financial advisors to maximise their Age pensions through exempt income streams or other methods. And it is some of these poor blighters who are shoving cash under their mattresses. You can have non financial assets that are not deemed income on, although they will count in the assets test if the total non financial assets exceed certain levels.

      • Who's to stop a person from shoving $1m under their beds (so long as they take the risk with burglary or worse still Alzeihmer's) and not declaring this asset? No one can stop you from doing it if you are willing to forgo the interest/dividend you would otherwise earn if it was invested elsewhere. I am sure there are more people who do this than we think.

        • $1m under the bed is going to make a very lumpy mattress, and very hard to spend sometime without someone asking questions.

          Forget robbery, you wouldnt want to be smoking in bed, insurance wont cover that enlightenment

  • Hi

    There are great suggestions above but this is from experience as I support people with their pension/aged care matters for work.
    As a general rule I would recommend you to declare all asset or income to Centrelink. Doing probably 80+ application for pension/aged care costs pa I can comfortably say there are no assets or income sources Centrelink would over look on.

    I've supported people who have gifted large amounts of money away to family. Gifted assets stay in your profile for 5 years after it is disposed.
    If you are in this predicament you will either need take it on the chin with higher fees/lower pension or provide evidence to show how you have spent the money.

    My personal suggestions:
    - Give away you assets before you before age of 60 to family/someone you really trust.
    - Ask them to open a bank account on their name which they make your signatory on the account.
    - Draw down on the cash/interest for your expense.

    Hope it helps

    P.S: Art work should be declared as an asset.

    • I agree with declaring ALL assets. But some are assessed under the assets test, and some are deemed income under the income test. What I was looking at was, if you are losing pension under the income test (But not the assets test), what assets could you purchase and are assessed under the assets test, not deemed under the income test, but also increase in value.

      • Hi

        Legally, all assets will need to be declared.
        If you decide not to declare an asset, it's up to you to either transfer ownership in the future/show Centrelink how you spent the money to purchase such asset.
        I cannot think of any assets Centrelink it not interested on.

        Good luck. Happy to chat if you need any help.

  • This kind of discussion dissappoints me.
    Why do you people accept the idea of a government being an acceptable entity. They are NOT real. They are a puppet group for the ruling class or murderous thieves that be. Arguing for or against their assertions is like arguing gods' will, rediculous. Please get real, before the planet is destroyed by this crap.