The Age Pension assets test is one of two means tests used by Centrelink to determine your Age Pension entitlement. It assesses the total value of your assets and reduces (or eliminates) the pension once assets exceed specified thresholds. Understanding what is counted, what is exempt, and how the taper works is essential for retirement planning.
Age Pension Assets Test Thresholds (FY2025–26 Approximate)
| Situation | Full pension (below threshold) | Part pension (above threshold) | No pension (above) |
|---|---|---|---|
| Single homeowner | $314,000 | $314,001–$686,250 | >$686,250 |
| Single non-homeowner | $566,000 | $566,001–$938,250 | >$938,250 |
| Couple (combined) homeowner | $470,000 | $470,001–$1,032,500 | >$1,032,500 |
| Couple (combined) non-homeowner | $722,000 | $722,001–$1,284,500 | >$1,284,500 |
Thresholds are indexed by CPI twice yearly (1 July and 20 September). Always verify current thresholds with Services Australia (Centrelink).
The Taper Rate
For every $1,000 of assets above the lower threshold, your Age Pension reduces by $3 per fortnight ($78 per year).
Example: Homeowner couple with $600,000 in assessable assets.
- Assets above threshold: $600,000 – $470,000 = $130,000
- Reduction: 130 × $3/fortnight = $390/fortnight reduction from maximum
- Maximum couple pension ~$1,726/fortnight → $1,726 – $390 = $1,336/fortnight (approximately)
What Assets Are Counted?
Centrelink counts the current market value of virtually all assets you (and your partner) own, including:
- Financial investments: Bank accounts, term deposits, shares, managed funds, ETFs
- Account-based pension balances (opened after 1 January 2015)
- Super in accumulation (once you reach Age Pension age — or your partner if they have reached Age Pension age)
- Investment properties: Market value (gross, before any mortgage owing)
- Business assets: Net value of business assets
- Motor vehicles: Market value
- Caravans, boats, and recreation vehicles
- Life insurance surrender value
- Managed investments, annuities (specific treatment applies)
What Assets Are Exempt from the Assets Test?
| Asset | Exempt? |
|---|---|
| Principal place of residence | ✅ Fully exempt — no cap |
| Contents of your home | ✅ Exempt (deemed at a flat amount) |
| Prepaid funeral expenses | ✅ Exempt (up to $15,000 via funeral bond) |
| Accommodation bond (aged care) | Partially exempt |
| Compensation payments for personal injury | ✅ Exempt (for a period) |
| Super in accumulation — if under Age Pension age | ✅ Exempt |
| Certain special disability trusts | ✅ Partially exempt |
Your principal home is the largest exemption — there is no cap on the value of the home that is exempt. A $5 million house is fully exempt from the assets test. This is why home ownership is such a significant advantage in the Australian retirement system.
How Assets Are Valued
- Shares and managed funds: Market value on the date of assessment
- Investment property: Market value — Centrelink may request a valuation; the gross value (before any mortgage) is used, but only the equity (value – mortgage) is typically assessed for investment properties
Wait — for investment properties, Centrelink assesses the net equity (current market value minus outstanding mortgage). For the principal home, there is no equity assessment — it is simply exempt.
Impact of Home Ownership on Assets Test
| Homeowner | Non-homeowner | |
|---|---|---|
| Full pension threshold (couple) | $470,000 | $722,000 |
| Pension cut-off (couple) | $1,032,500 | $1,284,500 |
The difference ($252,000) between homeowner and non-homeowner thresholds is a recognition that renters need additional assets to fund housing costs. However, renters still face a significant disadvantage — they must fund ongoing rent from their Age Pension and other income.
Related Articles
- Age Pension Income Test Australia
- Age Pension and Super Strategy Australia
- Retirement Planning Australia
- Retirement Investing hub
Frequently Asked Questions
Does my house count in the Age Pension assets test? No — your principal place of residence is fully exempt from the Age Pension assets test regardless of its value. This makes homeownership a very powerful financial position for Age Pension recipients.
Is my super counted in the assets test if I’m still working? If you are below Age Pension age, your super in accumulation phase is not assessed by Centrelink. Once you reach Age Pension age (67 for most), your super is fully counted in the assets test.
Does rental property count in the assets test? Yes — investment properties are assessed at their current market value (net of any outstanding mortgage). Only the principal residence is exempt.
This article provides general financial information only. Assets test thresholds change regularly. Always verify current thresholds at servicesaustralia.gov.au. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.