How much can I have in the bank before my Age Pension is cut?

The answer can’t be summarised in a few sentences.

Instead, Muirfield Financial Services will attempt to explain some of the inputs in calculating an Age Pension.

For starters, the Age Pension is calculated using the Income and Asset tests. If your assessable income or assets exceed either tests upper threshold, you will not receive a payment.

To receive the maximum Age Pension payment, your income and assets must be below both lower thresholds.

The thresholds vary depending on your relationship and homeowner status, as outlined below:

Single homeowner

• Income lower threshold: $5,304
• Income upper threshold: $60,632
• Asset lower threshold: $301,750
• Asset upper threshold: $656,500

Single non-homeowner

• Income lower threshold: $5,304
• Income upper threshold: $60,632
• Asset lower threshold: $543,750
• Asset upper threshold: $898,500

Couple homeowner

• Income lower threshold: $9,360
• Income upper threshold: $92,768
• Asset lower threshold: $451,500
• Asset upper threshold: $986,500

Couple non-homeowner

• Income lower threshold: $9,360
• Income upper threshold: $92,768
• Asset lower threshold: $693,500
• Asset upper threshold: $1,228,500.

Please note that these thresholds are accurate as at July 1, 2023 and are subject to change.

Money in the bank is one of the many components used to calculate your payment. Not only is it assessed as an asset, it is also deemed to earn income to calculate your entitlement under the income means test.

For this reason, it is challenging to say an exact figure one can have in the bank without impacting their Age Pension because other factors are at play.

As a practical example, John is a single homeowner with $5,000 of assessable income and $700,000 of assessable assets. Applying the rates outlined in the chart above, he is under the income threshold to receive the maximum Age Pension, however, his assets are above the upper threshold meaning he is precluded from a payment.

To receive any payment, John will need to have assessable assets under $656,500 and assessable income under $60,632. To receive the maximum Age Pension payment, John must have less than $301,750 of assets and under $5,304 of income.

To further entertain the question, a single homeowner no assets or income apart from money in the bank, may be able to have up to approximately $269,689 in the bank before their Age Pension reduces from the maximum rate. This is a rough estimate based on current income deeming rates and should not be considered as official advice.

To help you make sense of Centrelink rules, Muirfield Financial Services are hosting a series of events in the local region throughout October.

Please refer to our advertisement on the cover for more information.

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