Two retired neighbours live on the same street. One owns a house worth $2.5 million and has $300,000 in the bank. The other rents a unit and has $650,000 in savings. Who gets more Age Pension?
The homeowner with the multi-million-dollar house, by a long way. That isn’t a loophole. It’s how the Age Pension assets test is designed, and once you understand it, a lot of retirement decisions start to look different.
The home is exempt, whatever it’s worth
Services Australia doesn’t count your principal home as an asset for the Age Pension. A modest unit and a waterfront mansion are treated the same: neither is counted. What is counted is almost everything else, including bank accounts, shares, super (once you’ve reached Age Pension age), investment properties, caravans, cars and boats. Household contents count too, at what they’d fetch at a garage sale rather than what they’d cost to replace.
To even things up slightly, homeowners and non-homeowners have different thresholds.
The numbers, as at 20 September 2026
You can receive the full Age Pension if your assessable assets are at or below:
| Homeowner | Non-homeowner | |
|---|---|---|
| Single | $333,000 | $600,000 |
| Couple (combined) | $499,000 | $766,000 |
Above those amounts, the pension reduces by $3 a fortnight for every $1,000 over the threshold, until it stops completely. As at 20 September 2026, a single homeowner stops receiving a part pension at around $745,750 in assets, and a homeowner couple at around $1,121,000 combined.
These figures change several times a year, so check the current amounts on the Services Australia assets test page before you rely on them.
The gap between the homeowner and non-homeowner thresholds is $267,000. That’s meant to make up for renters not having a home that’s protected. In most capital cities, $267,000 doesn’t come close to buying a home, which is why renters in retirement often feel the system is stacked against them. It’s hard to argue with them.
Why the $3 taper matters more than people think
Three dollars a fortnight sounds trivial. Over a year it’s $78 for every $1,000 of assets. In other words, money sitting in the bank above the threshold costs you about 7.8 per cent a year in lost pension. Most savings accounts don’t earn that.
That has some uncomfortable consequences:
- Spending can make you better off. If you’re a part pensioner and you spend $20,000 on a new roof or a replacement car, your assessable assets drop and your pension rises by around $1,560 a year. The roof is exempt because it’s part of the home. The car is still counted, but cars lose value quickly and are assessed at what they’re worth now.
- Selling the family home can cost you pension. Turning an exempt asset into cash moves money straight into the assessable pile. There is a temporary exemption for proceeds you plan to put towards a new home, for up to 24 months, but if you sell and rent, the cash counts.
- Super can work against you after pension age. Before Age Pension age, money in an accumulation account isn’t counted. Afterwards it is. That’s one reason the downsizer super contribution suits some people and not others.
What you can’t do
The obvious next thought is to give money away to the kids. Centrelink got there first. You can gift up to $10,000 in a financial year, and no more than $30,000 over five financial years. Anything above that is treated as a “deprived asset” and still counted against you for five years from the date of the gift.
Paying off the mortgage on your own home is different. That’s money moving into an exempt asset, so it’s generally fine. Paying off one of your children’s mortgages is a gift.
Is this fair?
Economists and successive government reviews have argued for years about whether the full home exemption makes sense. One side says it encourages older Australians to stay in houses that are too big for them and penalises renters. The other says it protects people who worked for decades to own a home and shouldn’t be forced to sell up to qualify for a pension.
We don’t expect the rule to change any time soon. Any government that touches the family home exemption knows exactly how that would land with older voters. So the practical question isn’t whether it’s fair. It’s how to make decisions with the rules as they are.
Before you make a big move
If you’re thinking about selling, renovating, gifting or restructuring your finances, it’s worth running the numbers before you commit. Services Australia has a free Financial Information Service that will explain how a decision is likely to affect your pension. The Moneysmart retirement planner is also a good place to start.
FAQ
Is my home counted in the Age Pension assets test?
No. Your principal home is exempt, however much it’s worth. Homeowners have a lower assets threshold than non-homeowners to account for this.
How much does the pension drop for assets over the threshold?
The pension reduces by $3 a fortnight for every $1,000 of assessable assets above the full-pension threshold, which works out to $78 a year for every $1,000.
If I sell my home, is the money counted?
Usually yes, once it’s in the bank. Proceeds you intend to use to buy or build a new home can be exempt for up to 24 months, but cash you keep is assessable.
Can I give money to my children to qualify for the pension?
Only within the gifting limits: $10,000 per financial year and $30,000 over five financial years. Gifts above that are still counted for five years.
This article is general information only and isn’t financial advice. Thresholds and rules change regularly, so check the current figures with Services Australia.
