Nick Bruining: Falling asset values during this downturn offer an opportunity for part-pensioners to cash in

As the Australian economy stumbles towards a more severe downturn, the storm clouds of a possible recession could spell good news for seniors.

From four-wheel drives to beach houses, declines in the value of a range of assets could mean you become eligible for a part-pension from Centrelink for the first time — and existing part-pensioners could see a sizeable boost in their payment.

Potential and part-pensioners affected by the Centrelink asset means test are the ones most likely to be affected. Those already receiving a full pension are not.

Specialist Centrelink consultant Annette Sinclair said regular increases were part of the story.

“Many non-pensioners don’t appreciate that the pension cut-off thresholds go up three times per year, and with a relatively high inflation rate, the limits are surprisingly high.”

While an income test and an asset test are used, the asset test is generally regarded as the one that sees most potential claimants miss out. Under the rules, the test that produces the lowest pension outcome is the one Services Australia, the parent agency of Centrelink, will use.

The decline in asset values means many people who might be entitled to a payment are missing out.

Currently, a home-owning single can have up to $745,750, and couples can have a combined $1.121 million in assets and still qualify for a part-pension.

As a homeowner, Services Australia completely ignores the value of the primary dwelling and land, provided the area is less than 2ha. Non-homeowning singles can have $1,012,750 and couples, $1.388m and still qualify.

Under the income test, a single can receive up to $2701 a fortnight of Centrelink-assessable income, which bears no relation to taxable income. For example, most payments or withdrawals from superannuation don’t count. Couples can receive a combined $4128 a fortnight before losing their pension under the income test.

While the home is exempt, declines in real estate values have not been limited to metropolitan areas.

“Seniors lucky enough to own a beach house or an investment property should really compare the current Services Australia recorded value against where the market is at present,” Mrs Sinclair said.

Property valuer Brendon Ptolomey said the accuracy of the agency’s records would depend on when it was last valued.

“While every area is different, from Lancelin down to Busselton, some areas have fallen by up to 10-15 per cent,” Mr Ptolomey said.

“We’re back at about July 2025 levels at the moment.”

A property owner receiving a new valuation which is $50,000 less than the Services Australia value could see an additional $150 a fortnight added to their part age pension payments.

Similarly, high fuel prices have seen the value of diesel-powered cars and 4WDs drop in value, with reports saying some dealers are refusing to trade in diesel vehicles.

While the data is mixed, one Your Money reader with a popular Toyota 4WD model received an instant offer of $45,000 for their vehicle three months ago. The latest offer on the same vehicle recently came in at about $39,000.

That $6000 reduction for an asset-tested pensioner would translate to an extra $18 a fortnight in payments.

“You just need to keep an eye on the market values of all your expensive assets that Services Australia have recorded,” Mrs Sinclair said.

She added that entitlements to an increased payment were never back-paid and only applied from when Services Australia was notified of the change in values.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association

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