Age Pension asset categories: how Centrelink values different types of assets

The Age Pension is the means-tested government payment administered by Services Australia (Centrelink), and one of the two means tests it applies is the assets test. That test works by adding up the value of everything you own that counts, then comparing the total against a set of thresholds. It sounds simple, but the catch is that different kinds of assets are valued in different ways, and a handful carry special exemptions or discounts. Understanding how each category is treated helps you report accurately, avoid a nasty backdated debt, and see where the genuine planning levers sit. This article walks through the main categories — and finishes with two worked examples showing how the numbers come together.

Before the detail, the two figures that drive everything are worth stating up front. For a single homeowner, you keep the full pension while your assessable assets stay at or below $321,500, and the pension cuts out entirely once they pass $722,000 (Services Australia, as at 20 March 2026). Between those points the pension tapers: every $1,000 of assets above the free area reduces your payment by $3 a fortnight, a rate that has applied since 1 January 2017 (DSS Social Security Guide 4.2.3). With those anchors in mind, here is how each asset category is valued.

How are financial assets valued under the assets test?

Bank accounts, term deposits, listed shares, managed funds, exchange-traded funds, account-based pensions, and most annuity products are counted at their current market value. For a bank account or term deposit that is just the balance; for shares or managed funds it is the current price times the units you hold; for an account-based pension it is the current account balance, counted in full with no discount. On the income-test side these same assets are not assessed on what they actually earn — instead Centrelink deems them to earn a set rate. As at 20 March 2026 the deeming rates are 1.25% a year on the first $64,200 of financial assets for a single person (the first $106,200 for a couple) and 3.25% on anything above that (DSS Social Security Guide 4.4.1.10). Deeming means a strong year in the share market doesn't cost you pension, and a weak year doesn't rescue it — the assumed return is what counts.

How does Centrelink treat real estate?

The home you live in — the dwelling and the land immediately around it — is an exempt asset under the assets test, no matter what it is worth. Every other piece of real estate is assessable at current market value: an investment property, a holiday home, rural land held separately from your home, or vacant land, each valued by reference to recent comparable sales or a formal valuation. Rental income from an investment property is assessed as ordinary income on a net basis (gross rent less allowable expenses), not through deeming. One practical warning: property values drift, and the figure you first gave Centrelink can fall well behind the market. If a review uncovers a material understatement, the result can be a backdated overpayment debt, so it pays to update the declared value periodically.

How are motor vehicles, caravans, and boats valued?

Cars, motorcycles, caravans, campervans, and recreational boats are counted at their realistic second-hand market value — what the item would actually sell for today, not what you paid and not the cost of a new replacement. A late-model, high-specification vehicle can be a substantial assessable asset, while an older car might be worth well under $10,000. Centrelink uses market data to estimate values, and if you think its estimate is too high you can supply evidence of a more appropriate figure. For anyone sitting near the assets threshold, a recent purchase of a high-value SUV or motorhome can move the needle on entitlement.

How are household contents, personal effects, art, and collectibles assessed?

Ordinary household contents — everyday furniture, appliances, clothing, books, and general goods — are assessed at what they would realistically fetch second-hand, which for a typical household is modest, often somewhere around $5,000 to $15,000. That is not the replacement value, the insurance value, or the purchase price, and Centrelink will usually accept a reasonable owner estimate without a formal valuation. The picture changes for items with genuine market value. The Social Security Act treats jewellery, hobby collections, and works of art as assessable personal effects, so a painting by an established artist, a diamond ring with real intrinsic value, or a serious watch or coin collection sits outside "ordinary contents" and must be declared at its own market value. The right basis is what the item would achieve at auction or in a private sale — typically less than its insurance replacement figure — and for substantial holdings a specialist valuation is sensible.

Are funeral bonds and prepaid funerals exempt from the assets test?

Money paid in advance directly to a funeral director for a specific, fully prepaid funeral is exempt from the assets test with no dollar cap. A funeral bond — an investment with an approved provider earmarked for funeral costs — is also exempt, but only up to the Funeral Bond Allowable Limit, which is $15,750 as at 1 July 2025 and is reviewed each 1 July (Services Australia). The limit applies to the amount you invest; a bond can grow in value above the limit over time and stay exempt, provided your original investment was within it. If you hold several bonds you can nominate which one or two count toward the exemption, and a jointly owned bond is treated as a single bond with the same limit. You must tell Centrelink about any funeral bond you own even when you know it is exempt.

Are loans owed to you counted as assets?

If you have lent money to someone — including a family member — and the loan has not been forgiven, the outstanding balance is an assessable asset at face value, and the income test deems it to earn a return as a financial asset. Centrelink scrutinises family loans closely. A loan with no written agreement that is not being repaid can be treated as a gift — a deprived asset — rather than a genuine loan. So a family loan made for a real purpose, such as a home-deposit or a business start-up, should be documented with an agreement setting out the amount, any interest, the repayment schedule, and any security. That paperwork both protects you in a review and ensures the money is treated as an asset rather than a deprivation.

How are business interests valued?

Business interests — a sole-trader operation, a partnership share, shares in a closely held private company, or an interest in a trust — are assessed at net asset value, meaning assets less liabilities. Most structures will need a business valuation or an accountant's statement of net assets. Trusts in particular are a specialist area: which trust assets are attributed to you, and in what proportion, depends on the structure, the type of trust, and how much control you have, so professional advice is usually warranted.

Do lifetime annuities get a discount under the assets test?

A lifetime annuity bought on or after 1 July 2019 that meets the capital access schedule in the superannuation rules gets concessional treatment under the assets test. Only 60% of the purchase price is counted as an asset — a 40% discount on the usual full-value assessment — and that counted portion later drops to just 30% from the threshold day (broadly around age 84, and at least five years after the income stream starts) (Services Australia). On the income side, 60% of the payments you receive are assessed as income. This is a meaningful lever for someone wanting to lower their assessable assets through a guaranteed lifetime income. The discount is specific, though: products that don't comply with the capital access schedule — including many guaranteed-withdrawal products — do not get the 40% reduction.

How do the rules apply in practice?

These two cases show how individually modest items combine, and how the rules bite differently at different asset levels. They are illustrative only and not personal advice.

Margaret, 71, single, owns her home. Her assessable assets are an account-based pension of $200,000 (counted in full), a $50,000 term deposit, a two-year-old car worth $28,000 at second-hand value, standard household contents she reasonably estimates at $12,000, and a documented $50,000 loan to her adult son. That totals $340,000. Because she is a single homeowner, the full-pension threshold is $321,500 (20 March 2026), so she is $18,500 over it. At the taper of $3 a fortnight per $1,000 of excess, her pension is reduced by $18,500 ÷ 1,000 × $3 = $55.50 a fortnight — modest, but real, and entirely driven by everyday items rather than wealth. The example shows how a car, ordinary furniture, and a family loan can quietly push a part-pensioner over the line. Note that if Margaret had instead lent the $50,000 informally with no documentation and no repayments, Centrelink could treat it as a gift rather than a loan — and gifting rules could create their own assessment problem.

Robert and Helen, both 68, a homeowner couple. They hold $620,000 in financial assets (term deposits, shares, and two account-based pensions combined), a $40,000 car, and $15,000 of household contents — about $675,000 assessable. The couple full-pension threshold is $481,500 and the couple homeowner cut-off is well above their total, so they receive a part pension reduced by the taper on the roughly $193,500 of excess. Considering they want a secure income floor, suppose they move $200,000 into a compliant lifetime annuity. Only 60% of that — $120,000 — would count as an asset rather than the full $200,000, a $80,000 reduction in assessable assets that lifts their pension by around $240 a fortnight combined at the $3-per-$1,000 taper. On these facts, using a compliant lifetime income stream to capture the 40% assets discount is generally a rational option for an asset-tested couple — though it locks the capital away, so the trade-off between higher pension and reduced access matters.

Across all of these categories, the through-line is that Centrelink values assets at realistic market value, deems financial assets for the income test, exempts only your own home (not other real estate), and offers a small number of genuine concessions — funeral bonds, compliant lifetime annuities, prepaid funerals — that reward planning. Accurate, up-to-date reporting is the simplest protection against a backdated debt, and the concessions are worth understanding before you assume an asset is "just counted."

Sources

• Services Australia — Assets test for Age Pension
• DSS Social Security Guide 4.2.3 — Pensions and benefits assets tests (taper rate)
• DSS Social Security Guide 4.4.1.10 — Overview of deeming
• Services Australia — Funeral bonds and prepaid funerals
• Services Australia — Income streams (lifetime income stream assessment)