Centrelink treats homeowners and non-homeowners differently for Age Pension asset test purposes. Non-homeowners get significantly higher asset thresholds: $263,000 more for singles, $263,000 more for couples.
This isn't arbitrary. The rationale is that non-homeowners need extra assets to cover housing costs in retirement (rent), while homeowners have their housing needs met by the exempt family home.
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The Numbers (2025-26)
| Situation | Full Pension Threshold | Cut-off (No Pension) |
|---|---|---|
| Single, homeowner | $327,000 | $727,000 |
| Single, non-homeowner | $590,000 | $990,000 |
| Couple, homeowner | $490,500 | $1,093,500 |
| Couple, non-homeowner | $753,500 | $1,356,500 |
The increase is exactly $263,000 for singles and $263,000 for couples. This figure is set by legislation and indexed periodically.
How Centrelink Defines Homeowner
You're a homeowner if you (or your partner) own and occupy your principal home. This includes:
- Owning a house or unit outright
- Owning with a mortgage (even if still paying it off)
- Owning on a life interest or life tenancy basis
- Holding title with someone else (e.g., as joint tenants)
You're a non-homeowner if you rent, live in aged care, or don't own your principal residence. Owning an investment property doesn't make you a homeowner for Age Pension purposes; only your principal place of residence counts.
Important: If you sell your home, you may temporarily be classified as a non-homeowner, which increases your asset threshold. However, sale proceeds from your home are subject to special assessment rules for the first 12 months (proceeds can be exempt if you intend to use them to buy another home).
The Family Home Exemption
The family home is exempt from the Age Pension asset test. This is a significant concession. A homeowner with a $2 million house and $300,000 in super can receive the full Age Pension (subject to the income test), because only the $300,000 is assessable.
There is no cap on the value of the exempt home. Whether it's worth $500,000 or $5 million, it's fully exempt if it's your principal place of residence and you (or your partner) live there.
Land Size Limits
The exemption for your home includes up to 2 hectares of land (about 5 acres). If your property is larger than 2 hectares, the excess land may be assessed as an asset unless it can be demonstrated that the extra land is necessary for the private use and enjoyment of the home.
Why Non-Homeowners Get Higher Thresholds
The $263,000 adjustment recognizes that non-homeowners face ongoing housing costs in retirement. At current rental rates, $263,000 in assets might generate enough income (via investments or drawdowns) to cover 10-15 years of rent, depending on location and lifestyle.
This isn't a perfect offset. In high-rent areas like Sydney, $263,000 doesn't go far. In regional areas with lower rents, it might be more than adequate. The threshold is a national average compromise.
Practical Scenarios
Scenario 1: Homeowner vs Non-Homeowner with Same Super
Two singles, both age 67, both with $500,000 in super and no other assets.
Homeowner: $500,000 is above the full pension threshold ($327,000) but below the cut-off ($727,000). They receive a part Age Pension, reduced by the taper rate.
Non-homeowner: $500,000 is below the full pension threshold ($590,000). They receive the full Age Pension, even with the same $500,000 in super.
The non-homeowner is better off in terms of Age Pension received, but they still have to pay rent from their total income.
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Scenario 2: Selling the Family Home
A homeowner sells their $800,000 house and moves into rental accommodation. They now have $800,000 in cash plus their existing $300,000 in super (total $1,100,000).
As a non-homeowner, their asset test threshold is now $990,000 (cut-off). With $1,100,000, they're above the cut-off and receive no Age Pension under the asset test.
Before selling, as a homeowner with $300,000 in super (house exempt), they received the full Age Pension. Selling the house to access its value has pushed them over the asset test cut-off.
Strategy Consideration: Selling the family home to free up capital can reduce or eliminate Age Pension entitlements if total assessable assets exceed the non-homeowner cut-off. This isn't necessarily bad; having $1.1 million in liquid assets may provide more total income than part Age Pension plus $300K in super. But it's a trade-off worth understanding.
Related Considerations
Income Test Still Applies
The asset test isn't the only test. Centrelink also applies an income test, and you receive the lower of the two results. Even if you're under the asset test threshold, high income (from investments, part-time work, or other sources) can still reduce your pension.
Deeming
Centrelink applies deeming rules to financial assets. Your actual investment returns don't matter; Centrelink deems your assets to earn a set rate (0.25% on the first $62,600 for singles, 4.25% on amounts above that, as of 2025-26). This deemed income is used in the income test.
Learn more: How Centrelink Deeming Works in 2025-26
Commonwealth Rent Assistance
Non-homeowners who receive Age Pension and pay rent may be eligible for Commonwealth Rent Assistance (CRA), which is an additional payment on top of the base pension. This partially offsets the disadvantage of paying rent.
Know Your Exact Position
Asset test, income test, deeming rules, homeowner status—they all interact. Don't guess. Use our calculators to see your exact Age Pension entitlement and optimize your retirement strategy.
Calculate Your Age PensionFurther Reading
- Age Pension Asset Test 2025: Complete Guide
- The 7.8% Taper Trap Explained
- How Centrelink Deeming Works
Disclaimer: This article is educational information about Age Pension rules. It does not constitute financial advice and does not consider your personal circumstances. SuperCalc Pro Pty Ltd does not hold an Australian Financial Services License (AFSL). Consult a licensed financial adviser for advice specific to your situation.