Age Pension: Homeowner vs Non-Homeowner Asset Test 2025

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.

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.

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 (1.25% on the first $64,200 for singles or $106,200 for couples, 3.25% on amounts above that, from 20 March 2026). 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.