Understanding the Centrelink Assets Test
How the assets test works, current thresholds for homeowners and non-homeowners, what assets are counted, and strategies to understand your eligibility.
General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
Step 1.What the Assets Test Is and Why It Matters
The assets test is the second major test Centrelink uses to determine your payment rate (the first being the income test). Centrelink applies both tests and pays you whichever amount is lower. The assets test looks at the value of things you own. If your assets are below a certain threshold, you receive the full pension or payment. Above that threshold, your payment reduces. If your assets are above the upper threshold, you receive nothing. The assets test applies to most Centrelink payments, but is particularly important for Age Pension, Disability Support Pension, and Carer Payment. For allowances like JobSeeker, the assets test still applies but the thresholds are higher and less likely to affect younger people.
Step 2.Current Assets Test Thresholds
As of March 2026, the lower thresholds (below which you get the full pension) are approximately: Single homeowner — $301,750; Single non-homeowner — $543,750; Couple (combined) homeowner — $451,500; Couple (combined) non-homeowner — $693,500. The upper thresholds (above which your pension reduces to zero) are approximately: Single homeowner — $674,000; Single non-homeowner — $916,000; Couple homeowner — $1,012,500; Couple non-homeowner — $1,254,500. Non-homeowners get higher thresholds because they do not have the benefit of owning a home to live in rent-free. Between the lower and upper thresholds, your pension reduces by $3.00 per fortnight for every $1,000 of assets above the lower threshold. These thresholds are indexed and adjust on 1 July and 1 January each year.
Step 3.What Counts as an Asset
Centrelink counts a wide range of assets: bank accounts and term deposits (at their current balance), shares, managed funds, and other financial investments (at market value), superannuation (if you are over Age Pension age — under pension age, super is generally exempt), investment properties (at market value minus any outstanding mortgage on that specific property), cars, boats, and caravans (at market value, which is often lower than you think), household contents and personal effects (valued as what you could sell them for, not replacement cost), business assets, funeral bonds (up to $15,000 per person), and gifted amounts above the allowable limits. Centrelink may ask for valuations of real estate and other significant assets.
Step 4.What Does NOT Count as an Asset
Several important things are excluded from the assets test. Your principal home — the property you live in — is completely exempt, regardless of its value. This is one of the most significant exemptions in the Australian welfare system. A home worth $3 million is treated the same as a home worth $300,000 under the assets test (though it determines whether you are assessed as a homeowner or non-homeowner, which affects the thresholds). Other exempt assets include: pre-paid funeral expenses (with some conditions), accommodation bonds paid to an aged care facility, certain disability aids and equipment, and the value of your household contents up to a reasonable level. Life insurance policies that have no cash surrender value are also exempt.
Step 5.Homeowner vs Non-Homeowner Status
Whether Centrelink classifies you as a homeowner or non-homeowner significantly affects your assets test thresholds. You are a homeowner if you own the property you live in, or if you have a right to live in a property (such as a life interest). If you are paying a mortgage, you are still considered a homeowner — but remember, the mortgage does not reduce the value of your home for assets test purposes because the home is exempt anyway. If you sell your home, the proceeds are exempt from the assets test for up to 24 months if you intend to buy a new home (the 'proceeds of sale' exemption). If you live in a granny flat arrangement where you have paid for the right to live there, special rules apply. Centrelink assesses a 'reasonably attributable value' for the granny flat interest.
Step 6.Gifting Rules — Be Careful
Centrelink has strict rules about giving away money or assets (gifting). You can give away up to $10,000 in a single financial year, with a rolling 5-year limit of $30,000. Any gifts above these limits are still counted as assets for 5 years from the date of the gift, and the deemed income on those amounts is still counted under the income test. This is called 'deprivation'. It exists to prevent people from giving away their assets to qualify for the pension. Selling an asset for less than its market value is also treated as a gift — the difference between the sale price and market value is the 'gift' amount. These rules apply to gifts made in the 5 years before you claim a pension, as well as gifts made while you are receiving a pension. Plan any gifting carefully and seek advice from a Financial Information Service officer.
Step 7.Strategies and Common Questions
People often ask whether they should spend down their assets to qualify for the pension. Spending money on things you genuinely need — home renovations, a new car, a holiday — is perfectly fine and will reduce your assessable assets. However, deliberately disposing of assets (giving them away, selling them cheaply, or spending recklessly) may trigger the deprivation rules. Paying off your home mortgage is one of the best strategies because it converts an assessable asset (the cash) into an exempt asset (home equity). Prepaying funeral expenses is another legitimate strategy. If you are a couple and one person is going into aged care, the assets test rules change significantly — seek specialist financial advice as the rules for aged care accommodation are complex. Use our Assets Test Calculator to model different scenarios and see how changes to your assets affect your pension.
Useful Tools
- Assets Test Calculator
- Age Pension Calculator
- Deeming Rates Calculator
- Income Test Calculator
- Benefits Eligibility Check
Resources
- Services Australia — Assets Test (servicesaustralia.gov.au)
- Services Australia — Gifting Rules (servicesaustralia.gov.au)
- Department of Social Services — Asset Types (guides.dss.gov.au)