Centrelink Asset Test Explained: Thresholds & What Counts
Learn how the Centrelink asset test works, current thresholds for 2026, what counts as an asset, and strategies to manage your assets for maximum payment eligibility.
How the Centrelink Asset Test Works
The asset test is one of two means tests (alongside the income test) that Services Australia applies to determine your eligibility for payments and how much you receive. The basic principle is that if you have significant assets, you are expected to use those assets to support yourself rather than relying fully on government payments. The asset test applies to pension-rate payments (Age Pension, Disability Support Pension, Carer Payment) and allowance-rate payments (JobSeeker, Youth Allowance, Parenting Payment), though the rules differ between these categories. For pension-rate payments, there is a lower threshold (for the full pension) and an upper threshold (where the pension cuts out), with the payment tapering between the two. For allowance-rate payments, there is a single hard cutoff — if your assets exceed the limit, you get nothing. Your assets are assessed at their current net market value, meaning the price you would receive if you sold them today, minus any debts secured against them.
Current Asset Test Thresholds (March 2026)
The asset test thresholds differ depending on whether you are a homeowner, single or partnered, and whether you receive a pension or allowance payment. For pension-rate payments (Age Pension, DSP, Carer Payment), the full pension thresholds are: single homeowner $301,750, single non-homeowner $543,750, couple homeowner $451,500 combined, couple non-homeowner $693,500 combined. The pension cuts out entirely at: single homeowner $686,250, single non-homeowner $928,250, couple homeowner $1,030,000, couple non-homeowner $1,272,000. Between the lower and upper thresholds, the pension reduces by $3.00 per fortnight for every $1,000 of assets above the lower threshold (the taper rate). For allowance-rate payments (JobSeeker, Youth Allowance), the thresholds are the same lower limits as above, but there is no taper — you either qualify or you do not. These thresholds are indexed on 1 July each year in line with CPI.
What Counts as an Asset
Centrelink takes a broad view of what constitutes an asset. Financial assets include bank accounts, term deposits, shares, managed funds, bonds, cryptocurrency, and superannuation balances (for people of Age Pension age). Real estate assets include investment properties, vacant land, holiday homes, and any property other than your principal home. Vehicles, boats, caravans, and motorbikes are assessed at their market value. Personal effects including furniture, jewellery, artwork, and collectibles count at their sale value (not replacement cost). Business assets are included, as are any loans you have made to other people (the outstanding amount counts as your asset). Funeral bonds up to $15,000 are exempt, as are accommodation bonds paid to aged care facilities. Life insurance policies with a surrender value are counted. Income stream assets (such as account-based pensions) are assessed at their current account balance. Importantly, the asset test looks at the gross value of assets minus any loans secured specifically against them — an investment property worth $500,000 with a $300,000 mortgage is assessed at $200,000.
What Is NOT Counted as an Asset
Several important categories of assets are exempt from the Centrelink asset test. Your principal home — the property you live in — is fully exempt regardless of its value, making it the most significant asset test planning tool available. This includes the land on which it sits, up to the surrounding two hectares (on a single title). If you are in aged care, your former home remains exempt for two years, or indefinitely if your partner still lives there. Prepaid funeral expenses (including a funeral bond up to $15,000) are exempt. Accommodation bonds or refundable accommodation deposits paid to an aged care facility are exempt. Certain income streams that meet Centrelink's requirements for asset-test-exempt status may be partially or fully exempt. The proceeds of a life insurance policy are exempt if held in the above exempt forms. Personal aids and equipment related to a disability are exempt. Native title rights are not assessed. Understanding these exemptions is critical for retirement planning.
Homeowner vs Non-Homeowner Rules
Whether Centrelink classifies you as a homeowner significantly impacts your asset test threshold. Homeowners have lower thresholds because they do not need to fund housing from their assets. Non-homeowners receive thresholds that are $242,000 higher, reflecting the additional assets they need to cover rent or other housing costs. You are classified as a homeowner if you own the home you live in, even if you have a mortgage on it. The mortgage reduces the value of the home, but since the home is an exempt asset, this makes no difference to your asset test assessment — however, the debt is also not counted against your other assets. If you own your home jointly with someone else, your share is still exempt. If you are a non-homeowner who is paying off a home that you do not yet live in (for example, building a new home), you may be treated as a non-homeowner temporarily. Selling your home and renting does not always improve your pension position — while you gain the higher threshold, the sale proceeds become assessable assets.
The Gifting Rules
Centrelink has strict rules about gifting assets to reduce your assessed wealth. You can gift up to $10,000 in a single financial year, and up to $30,000 over a rolling five-year period, without it affecting your asset test. Any gifts above these limits are treated as if you still own the asset — the excess amount remains as a 'deprived asset' in your assessment for five years from the date of the gift. This applies to gifts of money, property, or other assets, including selling something for less than its market value (the difference between the market value and the sale price is treated as a gift). The gifting rules are designed to prevent people from giving away assets to family members to qualify for a higher pension. Note that the deprivation rules apply to both the income test (the gifted amount is deemed) and the asset test (the gifted amount counts as an asset). There are limited exceptions, such as gifts to special disability trusts for a disabled family member.
Superannuation and the Asset Test
How your superannuation is treated under the asset test depends on your age. If you are under Age Pension age (currently 67), your superannuation balance is completely exempt from the asset test. This is a significant advantage for younger payment recipients — a person on JobSeeker could have $500,000 in super without it affecting their payment. Once you reach Age Pension age, your entire superannuation balance becomes an assessable asset, whether it is in accumulation phase, pension phase, or a combination. There is no distinction between taxed and untaxed components for asset test purposes. If you are a member of a couple and only one of you has reached Age Pension age, only that person's super is assessed — the younger partner's super remains exempt. This creates planning opportunities for couples with an age gap. It is worth noting that salary sacrifice contributions made while on a working-age payment do not affect your current asset test (since super is exempt) but will increase your assessable assets once you reach pension age.
Strategies to Manage the Asset Test
There are several legitimate strategies to manage your position under the asset test, particularly for Age Pension purposes. Paying down your mortgage or upgrading your principal home is the most common approach, since your home is exempt from the asset test. Prepaying funeral expenses (up to the $15,000 funeral bond limit) converts an assessable asset into an exempt one. Making home improvements or repairs reduces assessable cash while increasing the value of your exempt home. Purchasing a more expensive car (if genuinely needed) is another option, though vehicles are still assessed at market value. Some retirees consider contributing to a special disability trust for a disabled child or grandchild. It is important to be aware that some strategies may affect the income test even if they help with the asset test — for example, paying down an investment property mortgage reduces your assessed assets but may increase your assessable net rental income. Always model both tests together using our calculators before making changes.
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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
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