Your Age Pension Has Increased — But What Does That Mean If You’re Downsizing?
If you receive the Age Pension, you may have noticed some welcome news.
From 20 September 2026, the maximum Age Pension rate increased.
But on the very same day, another Centrelink change came into effect — and this one is particularly worth understanding if you’re considering selling your family home and downsizing.
Deeming rates also increased.
That doesn’t mean downsizing will automatically reduce your pension. Far from it.
But it does mean the financial picture can be more complicated than simply:
“We’ll sell the big house, buy something smaller and put the money left over in the bank.”
The question isn’t just what your home will sell for
For many long-term homeowners on the Mornington Peninsula, the family home may be their largest asset.
While it remains your principal home, its value is generally exempt from the Age Pension assets test.
But selling it changes the picture.
Suddenly, you may have a substantial amount of money sitting in a bank account while you search for your next home.
Some of those sale proceeds may receive special Centrelink treatment while you are purchasing, building or renovating your next principal home.
But that does not necessarily mean Centrelink ignores the money altogether.
And that distinction is where downsizers can get caught out.
Before selling, there are three numbers worth knowing
Long before the photographer arrives and the FOR SALE board goes up, I think there are three figures worth working out:
1. What is your current home realistically likely to sell for?
Not an automated online estimate or the figure you hope to achieve — a sensible selling range based on the current market.
2. What will your next home realistically cost?
A $1.3 million sale sounds very different if your next home costs $900,000 rather than $1.2 million.
3. How much are you likely to have left after buying, selling and moving?
This is often the number people haven’t calculated carefully enough.
And it may be the figure that prompts some very important questions for Centrelink or your financial adviser.
Property planning and financial planning need to meet
I wouldn’t suggest making the decision to stay in a home that no longer suits you purely because you are worried about Centrelink.
If the garden is becoming too much, the stairs are difficult, rooms are sitting unused or you simply want something smaller and easier to manage, those are important considerations too.
The key is knowing the potential financial consequences before you sell, while you still have choices.
In my latest video, I explain what changed on 20 September, why deeming matters to downsizers and the important difference between money being exempt under the assets test and how it can be treated under the income test.
▶️ Watch: Your Age Pension Is Going Up — But Downsizing Could Still Reduce It
https://morningtonpeninsulahomes.com/PensionUP_YT
Free Downsizing, Centrelink & Your Pension Guide
We’ve also put together a free guide explaining some of the Centrelink issues worth investigating before selling your family home.
This information is general in nature and is not financial advice. Your individual circumstances should be discussed with Services Australia and/or an appropriately qualified financial adviser.
