How does the assets test work?

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Disclaimer

Social security pensions are means tested to ensure that Government support goes to people who are truly needy. There are two means tests - an income test and an assets test. If either of these tests results in a reduction in your pension, the Government will apply the one which gives the greater reduction. For example, if the income test indicates a reduction of $50 per fortnight and the assets test indicates a reduction of $60 per fortnight, your pension will be reduced by $60 per fortnight.

Under the assets test, a pension is reduced by $3 per fortnight for every $1000 that the assets of the pensioner or pensioner couple exceed specified limits. The limits are higher for people who do not own their homes, to allow for the added burden of paying rent and to compensate for the fact that the value of a pensioner's principal home is disregarded for assets test purposes.

The CCH Social Security Assets Test Calculator estimates the maximum amount of pension (excluding pharmaceutical allowance) which an eligible pensioner or pensioner couple can receive, after reduction for any assets above the asset limits. For current assets test thresholds see CCH Financial Planning Navigator; 19-550.

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This calculator and related information are for general guidance only and may not apply to all situations. For more information, contact your Financial Adviser or Centrelink (http://www.centrelink.gov.au/).

Financial advisers may wish to refer to the following CCH publications:

• CCH Financial Planning Navigator;
• CCH Electronic Superannuation Library, see Superannuation Commentary;
• Australian Electronic Master Tax Guide;
• Australian Master Superannuation Guide.

• Australian Master Tax Guide (annual book);
• Australian Master Financial Planning Guide (annual book);
• Australian Master Superannuation Guide (annual book);
• CCH Australian Superannuation Law and Practice (looseleaf subscription).

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This calculator is made available by CCH for use subject to the following:

• the calculator (including its help file) provides general information without taking account of the particular circumstances of any individual;
• it is not, and should not be relied on as, a substitute for appropriate professional advice;
• CCH gives no assurance that the calculator is free of errors or suitable for any user's intended purposes;
• to the extent permitted by law, CCH will not be liable for any damages or loss suffered by the user or anyone else from use of the calculator.

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