Age pension recipients will be exempt from the new minimum 30 per cent capital gains tax rate when it starts on July 1, 2027, giving older Australians on income support a break that will not be available to self-funded retirees. The change is expected to push more seniors toward checking whether a part-age pension could soften their tax bill.
That is why the rule is already drawing attention. Around 2.67 million Australians receive the age pension, including about 860,000 part-pensioners, and the exemption could affect decisions about when to sell assets and whether to seek Centrelink support before the new rate applies. Treasurer Jim Chalmers has said the minimum tax is meant to reduce the incentive to delay realising capital gains until marginal tax rates are lower, while people on payments such as the Age Pension and JobSeeker will be exempted.
Under the plan, income support recipients would still be taxed on capital gains at their marginal rate after the new inflation-adjusted CGT discount is applied, but they would avoid the 30 per cent minimum. The government says the exemption is there so the most vulnerable Australians on low income and low wealth are not disadvantaged. For retirees hovering near the threshold, that detail matters, because age pension eligibility depends on being 67, living in Australia, and passing income and asset tests, with the family home excluded from those tests.
Perks Private Wealth adviser Emma Burckhardt said advisers will now look more closely at clients near the borderline, because the policy creates a sharp divide between self-funded retirees and age pension recipients. Self-funded retirees face the minimum 30 per cent tax on capital gains regardless of their marginal rate, while age pension recipients are exempt. That split is likely to shape how some Australians think about retirement income, and it gives part-pensioners a reason to revisit their position before the rule takes effect.
The next fixed point is July 1, 2027, when the new rate is due to apply to real capital gains accruing from that date. What remains unclear is how many retirees will move far enough toward the pension threshold to change their tax outcome, but the exemption means the line between full self-funding and part-pension status will matter more, not less, once the clock runs down.
