Assets test

This page explains what DVA considers as assets, and how the assets test is applied when working out the rate of a pension. 

The rates on this page are effective from 20 September 2024.

Whilst this page uses the term "Pension" and "Pensioner" it also applies to recipients of Veteran Payment and Income Support Supplement.

What are the income and assets tests?

The amount of income support pension you receive depends on your income and assets. The pension is calculated under either the income or assets test . The test paying the lower rate of pension is the one that is applied. 

If you are a member of a couple, your pension is calculated on your combined income and assets, regardless of who receives the income or owns the assets.

If you are blind, the pension is paid at the maximum rate. This means that your income and assets will not affect your rate of pension. The income and assets tests will apply to your partner’s pension unless they are also blind. For further information please see Financial help if you are blind.

The income and assets tests only apply to the following income support pensions:

• Service Pension
• Social Security Age Pension
• Income Support Supplement
• Veteran Payment 

The tests do not apply to the Disability Compensation Payment, War Widow(er)’s Pension and equivalent payments under the Military Rehabilitation and Compensation Act 2004 (MRCA).

What is the assets test?

To work out your correct rate of income support pension, we need to know the value of your assessable assets. Generally, the value used is the current net market value, or the amount which you could reasonably expect to get when selling on the open market, minus any debts owed on the asset. Debts on the asset can include mortgages or secured overdrafts.

There are asset limits that determine the asset amount that you can have and still be paid a pension. These are called the assets value limits. To be paid the maximum rate of pension, the value of your total assets cannot exceed the relevant assets value limit.  

Where the total market value of your assets are higher than the relevant assets value limit, your fortnightly pension is reduced by 75 cents for every $250 worth of assets above the assets value limit. The pension continues to reduce at this rate until the value of your assets reaches or exceeds the relevant assets cut-off limits. No pension is payable if you have assets above the cut-off limits.

For a couple, the value of the assets is split between each member of the couple and the rate of reduction is the same for both members. Examples of how this is calculated are in the sections below.

There is a similar limit for the income test, known as the income free area. For information about the income free areas and the income test, please see Income Test.

Assets Value Limits - Service Pension, Social Security Age Pension and Veteran Payment

The value of the assets you may own before your rate of pension reduces depends on your relationship status and residential situation:

• there are different limits for singles and couples
• as the principal place of residence is an exempt asset, non-home owners are allowed the concession of a higher assets value limit.

The assets value limits for Service Pension, Social Security Age Pension and Veteran Payment are:

* Includes illness separated and respite care couples.

The assets value limits are adjusted each July.

You can have assets up to and including these amounts and still get the maximum rate of pension, provided your income does not exceed the income free area.

Example: A single person, who is not a home owner, has assets of $187,000. They can get the maximum rate of pension because the amount of these assets is less than the high limit for singles of $566,000.

A couple, who own their home, have assets of $487,000. This does not include the value of their home. Their pension or pension will be paid at a reduced rate because their assets are more than the low limit for couples of $470,000.

Remembering that pension is reduced by 75 cents for every $250 over the limit, the amount of reduction is calculated as follows:

In this example, each member of the couple would have their pension reduced by $25.50 per fortnight.

Assets Value Limits - Income Support Supplement 

The value of the assets you may own before your rate of Income Support Supplement (ISS) reduces depends on your relationship status and residential situation:

• there are different limits for singles and couples
• as the principal place of residence is an exempt asset, non-home owners are allowed the concession of a higher assets value limit.

The assets value limits for ISS are:

The assets value limits are adjusted each July.

You can have assets up to and including these amounts and still get the ceiling (maximum) rate of ISS, provided you are not paid under the income test.

Example: A single ISS recipient, who is a home owner, has assets of $581,500. Their pension will be paid at a reduced rate because the amount of these assets is more than the low limit for singles of $575,500.

Remembering that pension is reduced by 75 cents for every $250 over the limit, the amount of reduction is calculated as follows:

In this example, the ISS would be reduced by $18.00 per fortnight from the ceiling rate. 

What assets are counted?

The following list shows the common types of assets that are counted for pension purposes:

• money in bank, building society and credit union accounts
• investments in shares, managed investments, bonds and debentures
• vehicles (including cars, boats and caravans)
• household contents and personal effects
• businesses, private companies and partnerships
• real estate (other than the principal residence)
• properties (including farms) with over 2 hectares of land surrounding the principal home unless certain conditions are met
• private trusts
• life assurance/insurance, based on the surrender value (the amount received on redeeming the policy)
• loans
• gifts (totalling more than $10,000 in a financial year or totalling more than $30,000 in a rolling 5-year period)
• income streams (asset tested)
• superannuation funds in the accumulation phase for pensioners who are over pension age or qualifying age for war widow(er)s and wholly dependent partners
• cash on hand over $500
• bullion
• collections such as coins and stamps.

For more information about the assessment of superannuation, please see Managed Investments and Income Streams.

A number of less common assets may also be counted as assets for pension purposes. If you have any assets not listed above, contact DVA for information.

What assets are not counted?

The following assets are not counted under the assets test:

• principal place of residence which you own, including during a temporary absence for up to 12 months 
• land up to 2 hectares surrounding your principal home, if it is on the same title and used for private and domestic purposes
• all land on the same title as your principal home, if you are of qualifying age, have lived on the land for 20 years or more and are making effective use of the land, where possible
• the money or value of investments in a superannuation fund until you reach pension age or qualifying age, or commence a pension or income stream from the fund
• some asset-test exempt Income Streams purchased before 20 September 2007
• funeral bonds, cemetery plots, and prepaid funeral expenses, see Funeral bonds and prepaid funeral plans
• aids and appliances for a disabled person who is a DVA pensioner, their partner or dependent child
• the value of medals awarded to you
• the value of an interest in a granny flat or a sale leaseback home (conditions apply)
• lost or damaged principal place of residence during an extended temporary absence of up to 2 years, due to delays beyond your control in rebuilding or acquiring your home
• the principal place of residence which you own for up to 2 years while you are absent from that residence because you are personally providing community based care to another person
• the value of a lump sum accommodation bond or deposit paid to a residential aged care facility
• the value of the former home in which you resided prior to you becoming an aged care resident, for up to 2 years from the day you entered a care situation
• the value of the former home in which you resided prior to you becoming a permanent aged care resident, but only if you entered care before 1 January 2017, are renting out your former home and are paying any of the following:
  • a daily accommodation payment
  • a daily accommodation contribution
  • an accommodation charge
  • an accommodation bond wholly, or partly, by periodic payments.

If you sell your principal home the sale proceeds will be an exempt asset for up to 2 years (24 months), as long as you are planning to use the proceeds to buy or build another home. This can be extended for up to an additional 12 months if there are delays beyond your control in acquiring a new home. However, you will be deemed to be earning interest on the proceeds in the meantime and this is included in the income test. 

For more information, please see Selling Your Home.

Mortgage of exempt assets used to finance assessable assets

Mortgages raised against exempt assets such as your principal home and used towards other investments, do not reduce the assessable value of those assets. While you may borrow against the equity you hold in your exempt home, this may reduce your pension under the assets test. For example, you have borrowed against the equity in your principal home to purchase a new car for $30,000, this means the $30,000 value of the car is still included in the assets test.

What are unrealisable assets?

If you have substantial assets you may receive a reduced rate of pension, or no pension at all. If those assets produce little or no income, and you cannot reasonably be expected to sell or borrow against them to produce income, they may be regarded as unrealisable assets. If you have unrealisable assets that reduce your rate of pension, you may request for the value of some assets to be disregarded under the financial hardship provisions. For more information on the financial hardship provisions please see Ask us not to count some assets in assets test.

What are my obligations?

When you are granted an income support pension and periodically after that, you will be notified of your obligations. You will be required to tell us within 14 days (28 days if you live overseas or receive remote area allowance) of changes to your circumstances that might affect your rate of pension or your eligibility to receive that pension. These obligations apply equally to trustees and representatives.

The sorts of situations you need to tell us about are:

• you receive less than the maximum rate of pension because you are assets tested and the value of your assets increases. 
• your pension is reduced under the income test or your pension is paid at the maximum rate and the increase in assets would put your total assets over the assets value limit.

More information can be found on What you need to tell us about. 

If your pension is paid under the assets test, we will update the value of any business, farm or other property (such as a holiday home) each year. 

We will update the value of shares or unit-based managed investments every March and September. You do not have to tell us about changes in the value of these assets unless the number of units change – i.e. you buy or sell shares or managed investments.

Sometimes even when you do tell us about changes on time, we may not be able to process the change before your next pay. We do our best to make sure changes are actioned quickly. We will update your details as soon as we can. If we pay you too much in the meantime, you will still need to pay it back. 

You can find more information on How we recover overpayments.