When you sell your family home to downsize, it can affect your aged pension. Your home is an exempt asset — but the equity you free up isn’t. Watch the video to hear Rachel explain what this means for you.
🎥 In this video, Rachel Lane explains why selling your family home can trigger the assets test — and what to watch out for.
The asset thresholds to know
As a single homeowner, you can have $321,500* in assets before your pension starts to reduce. As a couple, that figure is $481,500*.
There’s also an income test — but as Rachel explains, she thinks of these two tests like a chihuahua and a rottweiler. The income test is the chihuahua. It might bite you first, but it doesn’t hurt as much. The asset test is the rottweiler. When that one bites, you know about it.
Here’s why. Every $100,000 you go over the asset threshold reduces your pension by $7,800 a year — that’s a negative 7.8%. If you put that same $100,000 in the bank and earn 5% interest, you’re still going backwards by 2.8%.
In the worst case, you could lose your pension entirely.
The upside you might not expect
Not everything works against you. Many downsizers find they become eligible for Commonwealth Rent Assistance for the first time.
If you move into a granny flat or retirement village and pay less than $258,000 for your new home, you may qualify for up to $219.40* a fortnight on top of your pension.
And if you move into a land lease community — where you own your home but rent the land — there’s no purchase price threshold at all. You can claim rent assistance simply by being a pension recipient.
It’s a nice little cherry on top.
General information only — not personal advice. We recommend speaking with a financial adviser about your individual circumstances.
*These figures current as at 20 March 2026 – you can download a Ready Reckoner of the current Thresholds, Rent Assistance and Entry Contribution Limits here
