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Ask Peter Scott – September 2016

September 29th, 2016

Question 1:

My wife and I are both 67 and we own our home. I receive a Superannuation Pension from First Super and my Wife and I receive a part pension from Centrelink. Could you please explain the changes to the Age Pension that start from 1 January 2017?


You may be affected by the changes, however, the extent of how you will be affected will depend on your level of ‘Centrelink Assessable Assets’ you hold on 1 January 2017. (This will not include the value of your current residence)

From 1 January 2017, the Asset Test thresholds and Taper Rate will change for individuals receiving the Age Pension as follows:

Homeowner Status Asset Test Free Area Reduced Pension for Assets between No Pension for Assets above
Single – Homeowner $0 to $250,000 $250,000 and $542,500 $542,500
Single – Non Homeowner $0 to$450,000 $450,000 and $742,500 $742,500
Couple – Homeowners $0 to $375,000 $375,000 and $816,000 $816,000
Couple – Non Homeowner $0 to $575,000 $575,000 and$1,016,000 $1,016,000

 The Fortnightly Taper rate (Fortnightly Pension Reduction Rate) will increase to $3.00 for every $1,000 above the new Asset Test Free amount. In December 2016, Centrelink will advise affected Age Pension Recipients of the changes relating to their pension. If a person has their Age Pension cancelled because of the new threshold limits, Centrelink will provide them with the ‘Commonwealth Seniors Health Card’, along with an indefinite exemption from the income test requirements applying to this card.

(Source: Department of Human Services 20th September 2016)

Your new Asset Test limits from 1 January 2017  will see the lower threshold increase to $375,000 and the upper threshold reduce to $816,000, If you believe that the new threshold limits will have an effect on your Age Pension, and you would like to review your current First Super Pension arrangements, please contact our Financial Planning Team for assistance.

Question 2:

 I am 62 and currently making Superannuation Salary Sacrifice Contributions to my First Super account, could you please explain how the proposed new ‘Contribution Limits’ will affect me?


The Government is proposing to reduce the ‘Concessional Contribution Cap’ to $25,000 for all superannuation members effective from 1 July 2017. Concessional Superannuation Contributions include:

  • Your Employer’s 9.5% Superannuation Guarantee Contribution
  • Any additional Employer Contributions above the 9.5% level
  • Superannuation Salary Sacrifice Contributions
  • Member Deductible Contributions (e.g. Self-employed individuals)

Your current Contribution Cap level is $35,000 (members age 50 and over) for the 2016/17 financial year, therefore, if these changes are approved, you will see your current ‘Contribution Cap’ reduce by $10,000 from 1 July 2017.

In July 2017, you may need to review your current level of contribution to ensure that you will not exceed the new ‘Caps’, as penalties apply to individuals who exceed the cap. Your First Super Financial Planning Team can assist you with your contribution arrangements from 1 July 2017.


This is a  guide and is intended to provide general information only, and not advice and has been prepared without taking into account your individual objectives, financial situation or needs.  For further information call us on 1300 360 988 or you can obtain a copy of our PDS from firstsuper.com.au This Financial Services Guide was prepared in February 2016 and issued by First Super Pty Ltd (ABN 42 053 498 472 AFS Licence No: 223988 RSE Licence No: L0003049).