Since being introduced into the Australian retirement income system in 1909, the Age Pension has been a vital resource helping to raise the standard of living for retired Australians. More than just a safety net, the additional income provided by the Age Pension helps guard you against the possibility of outliving your savings.
Because of this, it’s crucial for you to keep up to date on eligibility requirements, assets and income tests, and other changes as they arise.
Below is an overview of the basics of the Age Pension.
Do I qualify for the Age Pension?
You may be eligible depending on your personal and financial situation. Your eligibility will depend on your age, what assets you own, and what income you might receive from your superannuation or other investments that you hold, such as shares, an investment property, etc.
To be eligible for the Age Pension, you must:
- Be at least 66 years of age, depending on when you were born (this will change to 67 in 2023)
- Be an Australian citizen or permanent resident, who has lived in Australia for at least 10 years
- Meet the assets and income tests.
How much will I receive in Age Pension?
Generally, the more wealth and assets you have, the less pension you will receive.
Other factors that may affect how much you may receive includes any income you receive from investments, how much property you own, and whether you’re part of a couple or single.
Currently, the maximum Age Pension (excluding supplements) is:
- $900.80 per fortnight for singles
- $1,358.00 per fortnight for couples.
What are the Assets and Income Tests?
To qualify to receive the Age Pension, you must complete the assets and income tests.
These tests help Services Australia determine how much Age Pension you are eligible for, based on your current income and assets.
Assets:
Services Australia will assess the value of any assets you (and your partner) own. This is done to help determine what percentage of the Age Pension you will be entitled to.
There are limits to how much you (and your partner) can have in assets, to qualify for either a full or part Age Pension. Higher limits apply if you don’t own your own home.
Here are some examples of what’s included in the Age Pension assets test:
- Superannuation balances if you and your partner are both retired, and the value of any investments that give you a regular income, known as an income stream.
- Any other investments of value that you have, for example bank accounts, investment accounts, shares, etc.
- The market value of the contents of your home, including furniture, whitegoods, electrical equipment, etc.
- Any property you own apart from your primary residence, including property owned overseas.
- Any other assets such as cars, boats, caravans, collectibles, jewellery, etc.
According to Services Australia, the current asset limits are as follows:
Table 1: Assets limits for a full Age Pension
Situation | | Current limit |
Single | Homeowner | $270,500 |
Single | Non-homeowner | $487,000 |
| Couple (combined) | Homeowner | $405,000 |
| Couple (combined) | Non-homeowner | $621,500 |
Current limits apply from 1 July 2021 to 30 June 2022.
Table 2: Assets limits for a part Age Pension
Situation | | Current limit |
Single | Homeowner | $599,750 |
Single | Non-homeowner | $816,250 |
| Couple (combined) | Homeowner | $901,500 |
Couple (combined) | Non-homeowner | $1,118,000 |
Couple (illness-separated, combined) | Homeowner | $1,063,500 |
| Couple (illness-separated, combined) | Non-homeowner | $1,280,000 |
Current limits apply from 20 March 2022 to 19 September 2022.
To receive a full or part Age Pension payment, your assets (excluding your family home) must be lower than the limits above and you must also pass an income test.
Income test:
Services Australia will assess you and your partner’s income from all sources, including your superannuation. How much income your superannuation will produce in retirement depends on your account balance, and Centrelink will use deeming rules to assess your money related assets. These include:
- Savings accounts, including term deposits
- Shares, securities, managed investments
- Some income streams
Simply put, deeming is a set of rules used to work out the expected income generated from your assets, no matter what they actually earn.
For more information on deeming rates, refer to the Services Australia website on deeming and income streams.
The Age Pension has limits on what you can own and if you exceed these limits, your pension reduces.
You won’t receive any Age Pension if your income exceeds the following levels:
Your situation | Income cut off point / fortnight |
Single | $2,155.20 |
A couple living together | $3,297.60 combined |
| A couple living apart due to ill health | $4,270.40 combined |
Income that is assessable includes:
- Wages, bonuses, overtime, commissions and penalty rates
- Director fees, amounts you salary sacrifice and fringe benefits
- Real estate including investment properties or other investments.
Please note that there are types of income that Services Australia does not include in the income test. Exempt income includes:
- Most payments from the Government
- Regular payments from a close relative
- Insurance payments for loss or damage to your belongings.
Refer to the income page on the Services Australia website for more information.
What are the next steps I can take?
As you can see, preparing for retirement takes quite a bit of leg work, especially when it comes to determining your eligibility for the Age Pension.
We highly recommend speaking directly to your financial adviser or reaching out to Services Australia, who can help calculate what is relevant to your personal situation. If you don’t have a financial adviser, reach out to the Financial Advice Association Australia who as an independent body, can help put you in contact with one.
Since being introduced into the Australian retirement income system in 1909, the Age Pension has been a vital resource helping to raise the standard of living for retired Australians. More than just a safety net, the additional income provided by the Age Pension helps guard you against the possibility of outliving your savings.
Because of this, it’s crucial for you to keep up to date on eligibility requirements, assets and income tests, and other changes as they arise.
Below is an overview of the basics of the Age Pension.
Do I qualify for the Age Pension?
You may be eligible depending on your personal and financial situation. Your eligibility will depend on your age, what assets you own, and what income you might receive from your superannuation or other investments that you hold, such as shares, an investment property, etc.
To be eligible for the Age Pension, you must:
How much will I receive in Age Pension?
Generally, the more wealth and assets you have, the less pension you will receive.
Other factors that may affect how much you may receive includes any income you receive from investments, how much property you own, and whether you’re part of a couple or single.
Currently, the maximum Age Pension (excluding supplements) is:
What are the Assets and Income Tests?
To qualify to receive the Age Pension, you must complete the assets and income tests.
These tests help Services Australia determine how much Age Pension you are eligible for, based on your current income and assets.
Assets:
Services Australia will assess the value of any assets you (and your partner) own. This is done to help determine what percentage of the Age Pension you will be entitled to.
There are limits to how much you (and your partner) can have in assets, to qualify for either a full or part Age Pension. Higher limits apply if you don’t own your own home.
Here are some examples of what’s included in the Age Pension assets test:
According to Services Australia, the current asset limits are as follows:
Table 1: Assets limits for a full Age Pension
Situation
Current limit
Single
Homeowner
$270,500
Single
Non-homeowner
$487,000
Homeowner
$405,000
Non-homeowner
$621,500
Current limits apply from 1 July 2021 to 30 June 2022.
Table 2: Assets limits for a part Age Pension
Situation
Current limit
Single
Homeowner
$599,750
Single
Non-homeowner
$816,250
Homeowner
$901,500
Couple (combined)
Non-homeowner
$1,118,000
Couple (illness-separated, combined)
Homeowner
$1,063,500
Non-homeowner
$1,280,000
Current limits apply from 20 March 2022 to 19 September 2022.
To receive a full or part Age Pension payment, your assets (excluding your family home) must be lower than the limits above and you must also pass an income test.
Income test:
Services Australia will assess you and your partner’s income from all sources, including your superannuation. How much income your superannuation will produce in retirement depends on your account balance, and Centrelink will use deeming rules to assess your money related assets. These include:
Simply put, deeming is a set of rules used to work out the expected income generated from your assets, no matter what they actually earn.
For more information on deeming rates, refer to the Services Australia website on deeming and income streams.
The Age Pension has limits on what you can own and if you exceed these limits, your pension reduces.
You won’t receive any Age Pension if your income exceeds the following levels:
Your situation
Income cut off point / fortnight
Single
$2,155.20
A couple living together
$3,297.60 combined
$4,270.40 combined
Income that is assessable includes:
Please note that there are types of income that Services Australia does not include in the income test. Exempt income includes:
Refer to the income page on the Services Australia website for more information.
What are the next steps I can take?
As you can see, preparing for retirement takes quite a bit of leg work, especially when it comes to determining your eligibility for the Age Pension.
We highly recommend speaking directly to your financial adviser or reaching out to Services Australia, who can help calculate what is relevant to your personal situation. If you don’t have a financial adviser, reach out to the Financial Advice Association Australia who as an independent body, can help put you in contact with one.