Millionaires can now get an age pension. Or at least millionaire couples can. The cutoff point in the Assets Test for homeowner couples above which no pensions are payable is $1,074,000. The cutoff for single homeowners is $714,500. Non-homeowners can have an extra $258,000.

Single homeowners qualify for a full age pension if their assets are less than $321,500, while couples must have less than $481,500 for full pensions. Between those figures and the cutoff points mentioned, people receive part pensions.

The full pension is $1,178.70 per fortnight for singles, or $30,646 per annum. Couples receive $888.50 per fortnight each for a total of $46,202 per annum.

Retirees must pass an Income Test as well as an Assets Test to receive pensions, but the Income Test is more lenient. To illustrate, the income cutoff for single retirees above which they receive no pension is $2,575.40 per fortnight or $66,960 per annum.

To earn that income on investments equal to the Assets Test cutoff of $714,500 would require an interest rate of nearly 10 per cent per annum. So the Income Test usually only limits pension entitlement for older people who are still working and earning significant income.

There appears to be a trend towards more older people continuing to work at least part time past age pension age. Those who do qualify for the Work Bonus. This exempts $300 per fortnight of work income from the Income Test. That is disregarded, meaning more age pension.

The Work Bonus also has a ‘savings provision’ or ‘income bank’. If a person earns less than $300 in some fortnights the shortfall is saved up and applied to exempt income above $300 in future fortnights.

This is quite attractive for older people who do casual or seasonal work, or short run projects. It’s great for those who work for a few months each year and holiday the rest of the time.

Being over the limits for pension eligibility isn’t a problem. It is better to be self-funded as that provides more choices, flexibility and independence. Investing larger amounts can provide a very comfortable income.

Part pensioners also live quite comfortably, especially in country areas where the costs of living are lower than in the cities. Full pensioners also do reasonably well, especially if they have some investments. Even $200,000 invested can provide enough supplementary income to mean a better living standard.

Retirees can increase their pension eligibility by buying an annuity which is partly means test exempt. Funeral bonds are fully exempt. Financial planners can help work out the best options for intending retirees.