The age pension in Australia

As retirement approaches, there’s some important information you need to know about Age Pension and what you might receive, when you can apply, why you should consider applying, and where you can go if you need help.

It can be a complicated process to gather all of the necessary information you need to apply for an Age Pension and we recommend you read our article on claiming the age pension as a precursor to reading this article.  

Here are some tips and tricks on the when, what, why and where questions you may have in relation to claiming the Age Pension through Centrelink.

When:

If you’re approaching retirement and are near your preservation age (the age when you can access your super), you can apply for the Age Pension up to 13 weeks before you actually reach the Age Pension age, and it is recommended that you apply as soon as you’re eligible. ‘Age Pension age’ is:

• 65 years and 6 months, if you were born between 1 July 1952 and 31 December 1953;
• 66 years, if you were born between 1 January 1954 and 30 June 1955;
• 66 years and 6 months, if you were born between 1 July 1955 and 31 December 1956; or
• 67 years, if you were born on or after 1 January 1957.  

The processing time for Age Pension claims can sometimes be quite lengthy, and it may take longer than 13 weeks to process your request, so being prepared is key.  If your application does take longer to process, Centrelink will backdate your application to your eligible date, and they will back-pay you any payments you were eligible to receive.

What:

What you will receive as an Age Pension is broadly based on your wealth and assets you have. The first part is determined based on the Assets Test.  From 20 March 2024, for single homeowners, to receive the full Age Pension entitlement, your assets including superannuation, investments and savings must be under $301,750.  For couples who own their own home, your assets must be under $451,500. These asset limits exclude your family home. 

For those who don’t own their own home, singles can have $542,750 in assets and couples can have $693,500.

If your assets are within these thresholds, you can qualify for a part of full pension.  

How much of the Age Pension you will qualify for is also dependent on how much you earn.  This is known as the Income Test.  If you (and your partner if you have one) earn any income from paid employment or other investments (for example from rental on an investment property), you must report it.  

For singles, you can earn income up to $204 per fortnight to receive the full Age Pension.  Once you earn more income than this amount, your pension will reduce by 50 cents for each dollar over $204 you earn.  For couples, you can earn income up to $360 per fortnight to receive the full Age Pension.  Once you earn more than this, your pension will reduce by 25 cents for each dollar over $360 you earn.  

The current normal rates of Age Pension available are outlined below:

Why:

The Government has thresholds in place to ensure that those that can afford to support themselves in retirement do. The opposite is also true – the Government make available the Age Pension for those who need the support.  

Whilst the Government introduced the Superannuation Guarantee payments (part of your salary may be paid to your superannuation account), not everyone has had the benefit of these payments for their entire working lives, and as such, the Government are there to help those that need it.

Where:

If you need help, there are many sources available to you.  Some of these are below:

The How to claim a Centrelink payment online guide from Services Australia will take you through the step-by-step guide to claiming.

Services Australia provide information online – there is information relevant to retirement years that may be of assistance to you.  Below are links to content for the three stages of retirement including:

• Thinking about retirement
• Starting your retirement
• During retirement

The internet is also full or tips, tools and reference material that you can read and explore – just remember to only rely on information that is from reputable providers.  

What retirement looks like for you will likely be different to the next person, so it’s important to plan ahead. Here’s some suggestions:

• Start thinking about what your retirement will look like.
• Start gathering information on your wealth and assets to help you plan a financial future. This will also help you decide if you need a financial adviser to help guide you and support any Centrelink processes.
• If you’re nearing the Age Pension age, remember to apply for any entitlements sooner rather than later, but you may need to be patient, as Centrelink processes your claim.  
• You’ll need to gather all of your evidence around your assets and income, and the more prepared you are, the easier the process is likely to be.
• Take one action – it can be daunting to think about or plan for retirement but taking at least one action now, will likely help you in the long run.