How to Reduce Assets for Centrelink Age Pension Eligibility
If you're preparing for your Age Pension application, it’s essential to understand how your assets affect your Centrelink Age Pension entitlement. The Age Pension is subject to both an assets test and an income test, and reducing your assessable assets—legally and strategically—can improve your chances of qualifying or receiving a higher payment.
✅ Smart Ways to Reduce Assets for Centrelink Age Pension
1. Gifting Within Limits
To remain eligible under Centrelink rules, you can give away:
Up to $10,000 per financial year, and
A maximum of $30,000 over five years.
Exceeding these amounts may affect your Age Pension eligibility, as excess gifts are treated as "deprived assets" and still counted for five years.
2. Prepaid Funeral Plans and Funeral Bonds
Investing in a prepaid funeral or a funeral bond (up to approx. $15,000) reduces assessable assets. These are exempt under the Age Pension assets test if the plan is fully paid and non-refundable.
3. Home Improvements
Your principal residence is not counted by the Centrelink Age Pension assets test. Spending money on necessary home improvements (e.g. roof repairs, accessibility upgrades) legally reduces your assessable assets while improving your living conditions.
4. Upgrading Personal Use Items
You can use excess funds to purchase:
A car
Whitegoods and appliances
Furniture or electronics
Although these are still considered assets, Centrelink values them at second-hand rates, which usually results in a lower asset value than their original cost.
5. Superannuation Contributions (for Younger Partner)
If your partner is under Age Pension age, transferring money into their superannuation account can exclude it from your combined asset assessment—at least until they reach Age Pension age.
6. Paying Off Debts
Using cash or investment funds to pay off your mortgage or personal loans can lower your assessable assets and may help meet Age Pension eligibility thresholds.
7. Revalue Assets Correctly
Overestimated values can unfairly reduce your payment. Use updated market valuations for:
Vehicles
Collectibles
Household contents
Providing updated information during your Age Pension application or review can help ensure fair treatment under the assets test.
8. Buying a Burial Plot
Purchasing a burial plot or mausoleum is excluded from the assets test. This is a practical and compliant way to manage asset levels.
❌ Avoid Deprivation and Misrepresentation
Deliberately hiding or disposing of assets may:
Trigger penalties
Lead to rejection of your Centrelink Age Pension application
Result in overpayment debts
Centrelink applies a 5-year lookback rule for asset disposal, so always act within the guidelines.
🧮 Use an Age Pension Calculator
Before making financial decisions, use an Age Pension calculator to estimate your potential payments. These tools factor in your assets, income, and relationship status to help you understand your position.
📞 Need Help?
Consult an Age Pension Specialist to explore safe strategies.
