Renter vs Homeowner Age Pension: Same $500,000, Different Payment (Worked Example)
Two single Australians each have exactly $500,000 in assessable assets. One owns their home; one rents. Under the assets test (rates effective 20 March 2026), the homeowner gets a reduced part-pension because they sit above the single-homeowner free area of $321,500 — while the renter sits below the higher non-homeowner free area of $579,500 and qualifies for the full pension plus Rent Assistance. The home isn't counted, but its presence changes which threshold you're measured against.
The thing most people get backwards
Your principal home (the place you live in) is an exempt asset — Centrelink does not count its value in the assets test. People assume that means homeowners are always better off. But the test offsets that exemption with a lower free area: homeowners get a smaller buffer before the pension starts reducing, because the system assumes their wealth is partly tied up in a home they don't have to draw on for rent.
Non-homeowners get a much higher free area (about $258,000 more for singles) precisely because they have to fund housing out of their assessable assets. The crossover effect: at certain asset levels, a renter receives more Age Pension than an otherwise-identical homeowner — and may also get Rent Assistance on top.
The 2026 numbers (single person)
These are the assets test figures published by Services Australia, effective 20 March 2026:
| Single person | Homeowner | Non-homeowner |
|---|---|---|
| Full-pension free area (assets up to this = full pension) | $321,500 | $579,500 |
| Part-pension cut-off (assets above this = $0 pension) | $722,000 | $980,000 |
| Taper rate (pension lost per $1,000 over the free area) | $3 / fortnight | $3 / fortnight |
| Maximum single pension (base + supplements) | $1,200.90 / fortnight | |
Sources: Services Australia — Assets test for Age Pension and How much Age Pension you can get. Thresholds are reviewed in March, July and September.
The worked example: meet Dorothy and Frank
Worked Example — same wealth, different payment
Both are single, age 70, both passed the income test comfortably (low income), and both have exactly $500,000 in assessable assets (super in account-based pension, term deposits, a car, contents). The only difference: Dorothy owns her unit outright; Frank rents privately and pays $400/week.
Step 1 — Pick the right free area
- Dorothy (homeowner): her $500,000 does not include her home (exempt), and she's measured against the $321,500 homeowner free area.
- Frank (non-homeowner): his $500,000 is all he has, and he's measured against the $579,500 non-homeowner free area.
Step 2 — Are they over the free area?
- Dorothy: $500,000 − $321,500 = $178,500 over the free area. Her pension reduces.
- Frank: $500,000 is below $579,500 — he is under the threshold, so the assets test does not reduce his pension at all. Full pension.
Step 3 — Apply the $3 per $1,000 taper (Dorothy only)
The taper bites for every full $1,000 above the free area. Round $178,500 down to $178,000 in $1,000 blocks = 178 blocks.
178 × $3 = $534 per fortnight reduction.
Dorothy's pension: $1,200.90 − $534 = $666.90 per fortnight (a part-pension).
Step 4 — Frank's Rent Assistance on top
Because Frank pays private rent and receives a pension, he's also eligible for Commonwealth Rent Assistance. At his rent level he qualifies for the single maximum of $219.40 per fortnight (effective 20 March 2026). So Frank receives $1,200.90 + $219.40 = $1,420.30 per fortnight.
The result
| Dorothy (homeowner) | Frank (non-homeowner) | |
|---|---|---|
| Assessable assets | $500,000 | $500,000 |
| Free area used | $321,500 | $579,500 |
| Over the free area by | $178,500 | $0 (under) |
| Assets-test reduction | −$534 / ft | $0 |
| Base + supplements | $666.90 / ft | $1,200.90 / ft |
| Rent Assistance | $0 (owns home) | +$219.40 / ft |
| Total Age Pension | $666.90 / ft | $1,420.30 / ft |
Same $500,000. Frank receives roughly $753 more per fortnight (~$19,600/year) in Centrelink payments. The catch, of course, is that Frank's $500,000 has to cover his rent for life, while Dorothy owns her roof. The pension system isn't being generous to renters — it's recognising that Frank's assets must do more work.
Why $500,000 is the "flip" zone
The reason this example is so clean is that $500,000 sits between the two free areas: above the homeowner threshold ($321,500) but below the non-homeowner threshold ($579,500). In that band, the renter gets full pension while the homeowner is on a reduced part-pension.
Below ~$321,500 both get the full base pension (the renter still wins via Rent Assistance). Push the figure high enough and the homeowner cuts out first: a single homeowner's pension stops at $722,000 of assets, while a single non-homeowner can hold up to $980,000 before losing the pension entirely.
| Assessable assets (single) | Homeowner outcome | Non-homeowner outcome |
|---|---|---|
| $300,000 | Full pension | Full pension + Rent Assistance |
| $500,000 | Part-pension (~$666.90/ft) | Full pension + Rent Assistance |
| $722,000 | $0 (cut-off reached) | Part-pension |
| $980,000 | $0 | $0 (cut-off reached) |
Important caveats before you rely on this
- Two tests, lowest wins. Centrelink runs both the income test and the assets test and pays the lower result. This example assumes the assets test is the binding one (low income). If you have significant deemed or actual income, the income test could reduce the figures further.
- Selling the home creates a temporary exemption. If a homeowner sells to fund aged care or downsizes, special rules can apply to the sale proceeds for a period. Check with Services Australia.
- "Homeowner" has a precise meaning. You're a homeowner for the test if you (or your partner) own the home you live in. Owning an investment property you don't live in does not make you a homeowner — that property is fully assessable and you'd use the non-homeowner free area.
- Couples have different (combined) thresholds. The figures above are for a single person only.
For your exact entitlement, use the official Services Australia Payment and Service Finder or speak with a Financial Information Service (FIS) officer.
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Frequently asked questions
Does owning a home reduce my Age Pension?
Not directly — your principal home is an exempt asset and isn't counted. But homeowners are measured against a lower assets free area ($321,500 for a single, vs $579,500 for a non-homeowner). So a homeowner with the same countable assets can receive a lower pension than a renter, because they start reducing at a lower asset level.
Why does a renter with $500,000 get the full pension when a homeowner doesn't?
At $500,000, a single renter is below the non-homeowner free area of $579,500, so the assets test doesn't reduce their pension at all — they get the full $1,200.90 a fortnight. A single homeowner is $178,500 above their $321,500 free area, which reduces their pension by $534 a fortnight under the $3-per-$1,000 taper.
How is the $3 per $1,000 taper calculated?
Take your assessable assets, subtract your free area, then round down to whole $1,000 blocks. Multiply the number of blocks by $3. That's the fortnightly reduction. Example: $500,000 − $321,500 = $178,500 → 178 blocks → 178 × $3 = $534 a fortnight less.
Can I get Rent Assistance with the Age Pension?
Yes. If you receive an Age Pension and pay private rent above a minimum amount, you can get Commonwealth Rent Assistance on top — up to $219.40 a fortnight for a single (effective 20 March 2026). Homeowners can't claim it for their own home.
At what asset level does the single Age Pension cut out completely?
For a single homeowner, the pension stops once assessable assets exceed $722,000. For a single non-homeowner, the cut-off is $980,000. These are the part-pension disqualifying limits at 20 March 2026.
Does an investment property count toward my assets?
Yes. Only the home you actually live in is exempt. An investment property is fully assessable, and owning one does not make you a "homeowner" for the test if you don't live in it — you'd use the higher non-homeowner free area but still count the property's full net value.
General information, not personal Australia tax/legal advice. Verify with a qualified professional.
Figures verified against Services Australia — Assets test for Age Pension and How much Age Pension you can get, effective 20 March 2026. Thresholds are reviewed in March, July and September.