The Centrelink income test for an account based-pension explained Andrew Biviano explains how the Centrelink income test for an account based pension is calculated. The amount of income assessed by Centrelink for those with an account based pension is influenced by the gross annualised pension payment amount less a deduction amount. On the other hand, the Centrelink asset test only requires the account balance to determine the assessable asset value. It should be noted that for Centrelink purposes an account based pension is considered to be an asset tested income stream (long-term). Unlike asset tested income streams (short-term), which generally have a term of five years or less unless the term of income stream is greater than the person's life expectancy, an account based pension (including non-commutable) is not deemed. Gross annual payment amount Interestingly, the income assessed by Centrelink for an account based pension does not always equal the amount of the pension payments received by the pensioner. Why does this happen? This occurs because the amount used by Centrelink for the calculation is based on the sum of the pension payments received (or to be received) within a financial year grossed-up and expressed as an annual amount. To do this formula 1 is used. Consider the following example. Timothy, who is aged 66, commences an account based pension on 1 July and nominates a pension payment of $2,000 per month ($24,000 per annum), which represents 8 per cent of his $300,000 account balance. In this case, from a