New Centrelink Changes: More Aussies Eligible for $3,980.40 Age Pension

In a significant policy change that has mostly gone unnoticed, Centrelink is making major changes to the rules for Age Pension eligibility. These reforms are set to come into effect in the next few months and could benefit thousands of elderly Australians who were previously just outside the eligibility threshold.

The main focus of these changes is the asset test—the complex calculation that prevents many self-funded retirees who still have some savings from accessing pension benefits. These changes are significant for older people who have worked hard to build up a small corpus but whose assets are too large to qualify for a pension benefit.

A summary of the changes: What’s really happening?

HMRC Child Benefit Payments Increase by £334.30 in April 2025 – Check Eligibility

The recently announced reforms specifically set out how assets will be looked at when assessing Centrelink pension eligibility. This technical but important change will effectively raise the asset test threshold, creating a more generous assessment framework that acknowledges the challenges of funding retirement in today’s economic context.

“I’ve been looking at the pension rules for many years, waiting to see if they would ever be fair to people like me, who have saved hard but don’t have huge assets,” says Margaret Wilson, 68, from Brisbane. “As soon as my assets went above the threshold, I lost the pension benefit, even though my actual income was quite modest.”

There are millions of Australians like Margaret who are stuck in the “not very well off but not enough for a comfortable life” situation—that is, they retire and their assets are above the Centrelink threshold, but their income is too low to support themselves comfortably.

The current asset test threshold varies depending on household owners and their relationship status. If one person owns the home, the full pension threshold for single individuals is $301,750, while for couples it is $451,500. Partial pension eligibility extends to $635,750 for single individuals and $954,000 for couples.

Under the new system, these upper limits will be increased, providing relief to those who were previously excluded by the slight margin. According to government estimates, several thousand Australians who currently receive no pension benefits may become at least partially eligible.

Who will benefit most?

The first to benefit will be:

Self-funded retirees whose assets are slightly above the current limit, but their investment portfolio is small.
Recent retirees who have built up superannuation savings that are above the current limit.
Homeowners whose assets are moderate outside of the main residence.
Part-time workers who are in their late 60s and whose income and assets previously excluded them from a pension.

“This is not about changing the parameters so that millionaires can receive support from the government,” explains financial adviser Trevor Hampson. “It’s about how the previous criteria didn’t match up with today’s real retirement costs and the uncertainty of investment returns.”

This change will work for more than just pension payments.

The changes aren’t just limited to pension payments. In fact, the biggest benefits lie in automatic eligibility for the Pensioner Concession Card, which offers huge discounts on a range of things, including health care, utility bills, government services, and transport.

“The concession card is worth its weight in gold,” says 72-year-old Robert Chen. “When caring about every dollar in retirement, knowing your medicines will remain affordable is very comforting.”

Issue: Changes for those on the edge

This change could be a game changer for those on the edge of pension eligibility. Take Janet and Michael Peterson, who live in regional Victoria, for example. He owns a modest home and has superannuation savings of $970,000, which puts him above the current asset test threshold. While his wealth level is modest, his annual income is around $48,000—low even for a working Australian.

This change could make him eligible for a partial pension, which could be around $180 per fortnight, plus the benefits of a concession card. This small but significant step will provide relief to him.

Looking ahead: Long-term vision

Full List of HMRC Child Benefit Payment Increases for April 2025 with Details

While these changes are a relief to current retirees and those approaching retirement, they also raise questions about Australia’s broader retirement system. Experts believe these reforms are certainly a step in the right direction, but more reform may be needed in the future.

“This is a step in the right direction, but it will only solve some of the problems,” says Dr. Eleanor Rafferty, a retirement policy researcher. “Our retirement system has become even more complex, and more needs to be done to improve it.”

These changes provide an opportunity for people who made good financial decisions early in their lives but have since fallen out of situations they previously thought comfortable with.

FAQs

1. What changes are being made to Centrelink’s Age Pension eligibility rules?

Centrelink is raising the asset test thresholds for Age Pension eligibility, allowing more self-funded retirees and people with moderate assets to qualify for pension benefits and concession cards.

2. Who will benefit most from the new Age Pension rules?

Self-funded retirees, recent retirees with superannuation savings, homeowners with moderate assets, and part-time workers in their late 60s will benefit the most from the new asset test changes.

3. What is the asset test and how does it affect pension eligibility?

The asset test is a calculation that limits pension eligibility based on a person’s assets. The new reforms raise the threshold, allowing more people with modest savings to qualify for support.