Pension rates increase, eligibility thresholds higher for retirees

Pension rates are on the rise, giving retirees an opportunity to boost their income. Pensioners can benefit from adjusting their finances now rather than later, which can be more costly. The government has announced quarterly updates to the age pension. Due to inflation, single pensioners will see an increase of $4.60 every fortnight, while couples will receive an extra $3.50 each. It is vital for pensioners to check their entitlements regularly, as there are three adjustments throughout the year. For those asset-tested, the income test does not apply. This means they can earn extra income without affecting their pension. For instance, a single pensioner with $560,000 in assets may receive $411 a fortnight and can earn up to $43,000 a year without a penalty. However, it’s important to value personal items realistically, as overestimating their worth can reduce pension payments. Spending on holidays or home improvements may improve quality of life but won't significantly increase pension payments. For example, spending $100,000 on renovations may result in only a $7,800 annual increase in pension, which means a long wait to recover costs. Centrelink adjusts the values of investments twice a year. If the value goes down, a pensioner’s payment may increase. If it goes up, the payment might decrease. Pensioners should be mindful that superannuation remains exempt from asset testing until the person reaches pension age. A common mistake is using a pensioner's home as collateral for an investment property loan. This can lead to significant reductions in pension benefits, as Centrelink assesses the full value of the investment without deducting the mortgage. Gifting money is limited to $30,000 over five years. Any excess will be treated as a deprived asset and affect pension entitlement. It’s crucial for pensioners to seek advice before making big financial moves, as poor choices can have long-lasting effects on their pensions.