A couple who receive the aged pension and own their own home can have combined assets of up to $380,500.00 without their pensions being affected. If they have combined assets greater than that amount their pension may be reduced. A single person receiving the aged pension (and owning his or her own home) must have assets of less than $253,750.00 otherwise the pension can be affected.
As at 20 March 2018, the maximum basic rate of the aged pension for a couple was $1245.60 per fortnight (combined). For a single person the maximum basic rate of aged pension was $826.20 per fortnight. When a couple receiving the aged pension are considering their Wills it is wise for them to calculate what assets will be held by the survivor when the first of them dies. If the couple has combined assets in excess of $253,750.00 (disregarding their home) then the surviving spouse’s pension may be reduced depending upon the assets which pass to him or her. The survivor will receive the pension for a single person and the single person pension will be further reduced based upon how much he or she has above $253,750.00 (excluding the home).
There must be careful consideration when a couple receiving the aged pension make their Wills. The natural tendency is to leave everything to each other when the first dies however in order to preserve the maximum pension payment to the survivor there may be other members of the family who could receive a bequest in order to preserve the payment of the maximum pension to the survivor. It may be too late to rearrange the financial affairs of the survivor after the first person has died. A well thought-out and correctly structured Will may avoid the unnecessary loss of part or all of the pension by the survivor.