Age Pension Assets Test — How It Works and Asset Limits (2026)
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
Contents
The Age Pension assets test assesses the total value of your assets to determine how much pension you receive. Your primary home is generally exempt — but most other assets count, including investment properties, super balances, vehicles, and savings.
How the Assets Test Works
For every $1,000 of assets above the lower threshold, your pension reduces by $3 per fortnight (the taper rate).
$$\text{Pension reduction} = \frac{\text{Assets above threshold}}{1{,}000} \times $3 \text{ per fortnight}$$
Example: A single homeowner has $450,000 in assessable assets. The lower threshold is approximately $314,000.
$$\text{Reduction} = \frac{($450{,}000 - $314{,}000)}{1{,}000} \times $3 = 136 \times $3 = $408 \text{ per fortnight}$$
So instead of the maximum pension (~$1,144), they receive approximately $736 per fortnight.
Asset Thresholds (FY2025–26)
Full pension — lower threshold (below this, full pension paid under assets test)
| Status | Asset threshold |
|---|---|
| Single — homeowner | ~$314,000 |
| Single — non-homeowner | ~$566,000 |
| Couple — homeowner (combined) | ~$470,000 |
| Couple — non-homeowner (combined) | ~$722,000 |
Part pension cut-off — upper threshold (above this, no pension under assets test)
| Status | Cut-off threshold |
|---|---|
| Single — homeowner | ~$695,500 |
| Single — non-homeowner | ~$947,500 |
| Couple — homeowner (combined) | ~$1,045,500 |
| Couple — non-homeowner (combined) | ~$1,297,500 |
Note: thresholds are adjusted in July each year in line with CPI. Always verify at servicesaustralia.gov.au.
Homeowner vs Non-Homeowner
Whether you are classified as a homeowner or non-homeowner significantly affects your asset thresholds. Non-homeowners have higher thresholds (~$252,000 more) to account for the fact they must fund their own accommodation.
You are classified as a homeowner if you (or your partner) own or are buying the home you live in, including:
- Freehold property
- Strata title (apartment)
- Land on which you live in a caravan or houseboat you own
You are classified as a non-homeowner if you:
- Rent privately
- Live in government housing
- Live in a retirement village without owning the unit
What Counts as an Asset
| Asset type | Counted? |
|---|---|
| Bank accounts and savings | ✅ Yes |
| Shares, ETFs, managed funds | ✅ Yes |
| Superannuation (accumulation) — if over pension age | ✅ Yes |
| Superannuation (pension/drawdown phase) | ✅ Yes (balance assessed; also deemed for income test) |
| Investment properties | ✅ Yes (net market value) |
| Caravan, boat, motor vehicle | ✅ Yes (market value) |
| Household contents and personal effects | ✅ Yes (estimate of private sale value — typically $10,000–$15,000) |
| Business assets | ✅ Yes (net value) |
| Funeral bonds (above threshold) | ✅ Yes |
| Loans you have made to others | ✅ Yes |
What Is Exempt From the Assets Test
| Asset type | Exempt? |
|---|---|
| Primary home (principal residence) | ✅ Exempt |
| Car (one, for transport) | Partially exempt — check current rules |
| Funeral bonds (up to ~$15,000) | ✅ Exempt |
| Prepaid funeral expenses (reasonable) | ✅ Exempt |
| Accommodation bonds for aged care | Partially exempt — special rules apply |
| Superannuation (accumulation) — if under pension age | ✅ Exempt (only applies once over pension age) |
Assessment of Investment Properties
Investment properties are assessed at their net market value — the market value minus any mortgage or loan secured against the property.
The rental income from investment properties is assessed under the income test (gross rent minus allowable expenses).
Interaction With the Income Test
You are assessed under both the income test and the assets test. Services Australia pays you the lower amount resulting from each test.
If you pass the assets test but not the income test (e.g., you have high investment income from a small asset base), the income test result determines your pension.
See the Age Pension income test guide.
FAQ
Does my superannuation count in the assets test if I haven’t retired yet? If you are under Age Pension age, your superannuation in accumulation phase is exempt from the assets test. Once you reach Age Pension age, your super (whether in accumulation or pension phase) counts as an asset.
Is my car counted as an asset? Yes — vehicles are assessed at their current market value (typically what they would sell for privately). The principal vehicle used for transport may receive some concession — check current Services Australia policy.
Does gifting assets help avoid the assets test? Gifting has a limited effect. Services Australia’s gifting rules restrict the amount you can give away without it still being counted as an asset. You can gift up to $10,000 per financial year (up to $30,000 over 5 years) — amounts above this continue to be assessed as a “deprived asset” for 5 years.
What happens if my assets fluctuate? You are required to notify Services Australia of significant changes to your assets. Fluctuating share prices generally self-adjust at your next review or when you notify them. You should update your record within 28 days of any significant asset change.
See also: Age Pension Guide | Age Pension Income Test | Age Pension Rates
For advice tailored to your retirement situation, speak with a licensed financial adviser via MoneySmart.