In Australia there is no universal pension as exists in, for example, New Zealand. The age pension is designed to support the basic living standards of older Australians. It’s not a recognition of taxes paid previously, although this is a popular perception. It’s to stop older Australians living below the poverty line.
It is a welfare payment that targets pensioners by applying a means test. The amount of age pension paid is determined by both an income test and an assets test. Both tests are used and the lower pension is the one adopted. Both tests apply a threshold and income or assets above those thresholds will reduce the pension.
This discussion will focus on the assets test because not all assets are assessed.
Assets test
To receive the full pension, assets must not exceed: