Age Pension Assets Test 2026: The $3-per-$1,000 Taper Worked Through 4 Scenarios
The Age Pension assets test lets you hold a set amount of assets before your payment is touched — $321,500 if you're single and own your home, $579,500 if you're single and rent. Above that "free area," Centrelink cuts your pension by exactly $3 a fortnight for every $1,000 of extra assessable assets. This guide walks that taper through four real households so you can see precisely where you'd land.
The two tests — and why assets usually wins
Services Australia runs your Age Pension through two means tests every fortnight: an income test and an assets test. They calculate your entitlement under each, then pay you the lower of the two results. For most retirees who have built up superannuation but live modestly, the assets test is the one that bites — so it's worth understanding cold.
This article is about the assets test. It has three moving parts: the free area (how much you can hold before any reduction), the taper rate (how fast the pension falls once you're over), and the cut-off (the asset level where the part-pension disappears entirely). All three depend on whether you're single or a couple, and whether you own your home.
The 2026 assets test numbers
The thresholds below took effect on 20 March 2026. Services Australia indexes them in March, July and September, so always confirm the current figure before relying on it.
| Situation | Free area (full pension up to) | Cut-off (part pension stops at) |
|---|---|---|
| Single, homeowner | $321,500 | $722,000 |
| Single, non-homeowner | $579,500 | $980,000 |
| Couple combined, homeowner | $481,500 | $1,085,000 |
| Couple combined, non-homeowner | $739,500 | $1,343,000 |
Source: Services Australia — Assets test for Age Pension. Figures effective 20 March 2026.
From 1 January 2017 the taper has been $3.00 per fortnight for every $1,000 of assessable assets above your free area — confirmed in the Services Australia operational guidance (108-03010090). That works out to roughly $78 a year of lost pension for every $1,000 over the line, or about a 7.8% "deemed return" the system expects your extra assets to earn.
How the taper actually works (the maths)
The calculation is genuinely simple. Three steps:
- Add up your assessable assets. (More on what counts below.)
- Subtract your free area. If the result is zero or negative, you pass the assets test for the full pension.
- For every whole $1,000 above the free area, knock $3 off your fortnightly pension. Centrelink rounds the excess up to the next $1,000.
The maximum single rate of pension from 20 March 2026 is $1,178.70 per fortnight (including the Pension and Energy supplements), and the maximum couple rate is $1,777.00 combined per fortnight, per Services Australia. We'll start each scenario from those maximums and apply the taper.
Scenario 1 — Comfortably under the line
Dorothy, 71, single, owns her home in Bendigo. Assessable assets: $180,000 in super, $25,000 in a term deposit, $12,000 car, $10,000 contents = $227,000 total.
Step 1 — Free area: single homeowner = $321,500.
Step 2 — Excess: $227,000 − $321,500 = −$94,500 (under the line).
Result: Dorothy is below the free area, so the assets test does not reduce her pension at all. She qualifies for the full $1,178.70 a fortnight on assets — Centrelink will then check the income test and pay the lower of the two. With modest interest income she'll most likely receive the full pension.
Scenario 2 — The single homeowner over the line
Frank, 68, single, owns his home in Geelong. Assessable assets: $400,000 super, $35,000 shares, $30,000 caravan, $15,000 car, $20,000 contents = $500,000 total.
Step 1 — Free area: $321,500.
Step 2 — Excess: $500,000 − $321,500 = $178,500 over.
Step 3 — Round up to whole $1,000s: 179 increments of $1,000.
Taper: 179 × $3.00 = $537.00 reduction per fortnight.
Result: $1,178.70 − $537.00 = $641.70 per fortnight under the assets test (about $16,700 a year), plus he keeps the Pensioner Concession Card. Frank is comfortably inside the $722,000 cut-off, so he keeps a meaningful part pension.
Scenario 3 — A couple right near the cut-off
Helen (66) and Geoff (67), a homeowning couple in Adelaide. Combined assessable assets: $820,000 super, $120,000 shares, $40,000 cars, $30,000 contents = $1,010,000 total.
Step 1 — Free area: couple homeowner = $481,500.
Step 2 — Excess: $1,010,000 − $481,500 = $528,500 over.
Step 3 — Round up: 529 increments of $1,000.
Taper: 529 × $3.00 = $1,587.00 reduction per fortnight (combined).
Result: $1,777.00 − $1,587.00 = $190.00 per fortnight combined (about $4,950 a year between them). They're under the $1,085,000 couple cut-off, so a thin part pension survives — and crucially it still carries the Pensioner Concession Card, which is often worth more than the cash for cheaper medicines and concessions.
Scenario 4 — Over the cut-off (no payment)
Margaret, 70, single, owns her home in Perth. Assessable assets: $650,000 super, $90,000 shares, $25,000 car, $20,000 contents = $785,000 total.
Step 1 — Free area: $321,500.
Step 2 — Cut-off check: single homeowner part-pension stops at $722,000. Margaret's $785,000 is above it.
Result: No Age Pension is payable under the assets test. The fortnightly entitlement has tapered all the way to zero. To get back to even $1 of pension she'd need her assessable assets below $722,000 — see the "moving back under" section below.
What counts as an asset — and what's exempt
The single most common mistake is assuming the family home counts. It doesn't. Here's the split, drawn from Services Australia's list of assessable assets and real estate assets guidance.
| Counts (assessable) | Exempt (not counted) |
|---|---|
| Superannuation (once you're Age Pension age) | Your principal home and up to 2 hectares of adjacent land |
| Shares, managed funds, bonds | — |
| Bank accounts, term deposits, cash | — |
| Investment properties & second homes | — |
| Cars, caravans, boats, motorbikes | — |
| Household contents & personal effects (at second-hand "garage-sale" value, often ~$5,000–$20,000) | — |
| Business assets, collectables, surrender value of life insurance | — |
Two traps catch people out. First, household contents are valued at what you'd get at a garage sale, not what you paid or what they'd cost to replace — so don't over-declare. Second, the home exemption applies only to the home you live in; if you move into aged care or sell up, the exemption status can change and a former home is only disregarded for a limited period. Check the real estate assets rules if your living situation is changing.
Moving back under a threshold
Because the home is exempt, there are legitimate ways to reduce assessable assets — but anti-avoidance rules mean you can't simply give money away to qualify.
Drawing down (spending) assets
Spending assessable savings on something exempt — most obviously renovating or improving the family home, or paying off a mortgage on it — genuinely reduces your assessable total. Buying a more expensive car, by contrast, just swaps one assessable asset for another. Using Scenario 4: if Margaret spent $70,000 renovating her exempt home, her assessable assets fall from $785,000 to $715,000 — back under the $722,000 cut-off — and a small part pension (plus the concession card) reappears.
Gifting — and the limits
You can give assets away, but Centrelink's gifting (deprivation) rules cap how much "counts" as gone. Per Services Australia, you can gift up to $10,000 in a single financial year and $30,000 over five rolling financial years. Anything above those caps is treated as a "deprived asset" — it stays on your assets test (and is deemed for the income test) for five years as if you still held it. So gifting $50,000 to a child only removes $10,000 from your assessment this year; the other $40,000 is still counted.
- The taper is fixed: $3 per fortnight per $1,000 over your free area — roughly $78/year of lost pension per $1,000.
- Single homeowner free area is $321,500; renters get $579,500. Part pension stops at $722,000 (single homeowner) and $1,085,000 (couple homeowner).
- Your family home is exempt; super, shares, cash, vehicles and contents are all assessable.
- Spending assessable cash on the exempt home (renovations, mortgage payoff) is a clean way to move back under a threshold.
- Gifting is capped at $10,000/year and $30,000 over 5 years — give more and it still counts for 5 years.
- Even a $1 part pension brings the Pensioner Concession Card, which is frequently worth more than the cash.
Frequently asked questions
Does my house count in the assets test?
No. Your principal home — the one you live in — plus up to two hectares of adjacent land is exempt from the Age Pension assets test, per Services Australia. That's why homeowners have a lower free area than renters: the test assumes you don't need to fund accommodation.
How much can I have in assets and still get a full Age Pension in 2026?
From 20 March 2026, a single homeowner can hold up to $321,500 in assessable assets, a single non-homeowner up to $579,500, a couple (combined) who own their home up to $481,500, and a non-homeowning couple up to $739,500. Above those amounts the $3-per-$1,000 taper begins.
Is my superannuation counted?
Yes. Once you reach Age Pension age, your superannuation balance is fully assessable under the assets test (and deemed under the income test) whether it's in accumulation or an account-based pension. Super held by a younger partner who is under Age Pension age is generally not counted until they reach that age.
What happens if my assets go over the cut-off?
Your part pension reduces to zero and no payment is made — for example, $722,000 for a single homeowner or $1,085,000 for a homeowning couple in 2026. If your assets later fall below the cut-off (through spending, market falls or allowable gifting), you can reclaim a part pension. Notify Centrelink of changes within 14 days.
Can I give money to my kids to qualify?
Only within limits. You can gift $10,000 in one financial year and $30,000 across five financial years without it affecting your pension. Gifts beyond those caps are treated as "deprived assets" and still count in your assets test for five years, per the gifting rules.
Which test decides my payment — income or assets?
Both are calculated and Centrelink pays whichever produces the lower pension. For asset-rich, income-modest retirees the assets test usually governs; for those still earning or with heavily deemed investments, the income test may bind instead.
Want this as a one-page checklist?
Get the free Age Pension assets-test worksheet — list your assets, apply the taper, and see your likely fortnightly payment.
You're on the list — we'll be in touch.