The Australian Age Pension helps older Australians manage their retirement by providing financial support. It’s managed by Centrelink and eligibility is based on your age, income, and assets. This guide explains the basics of how the Age Pension works, who can apply, and how much you might receive. If you’re nearing retirement or planning for the future, this guide will make it easier to understand the Age Pension and how it fits into your overall retirement plan.
After reaching age 67, you may be eligible to receive the Age Pension. These pension entitlements may be able to be used in conjunction with drawings from your superannuation or income produced from your other investments to fund your living expenses. In addition to the pension payment, you are also entitled to the benefits associated with the Pension card. These benefits include:
- Cheaper Medicine
- Bulk Billed Doctor Visits
- State and Territory-Specific Benefits
- Lower utility bills
- Reduced property and water rates
- Discount public transport fare
- Reduced motor vehicle registration
Eligibility
To be eligible for the Age Pension, you will be subject to an income and asset test and paid the lower entitlement that is resulting from the tests. If you are not eligible for an entitlement under either test, you will not be eligible to receive an entitlement.
The maximum pension entitlement amounts including applicable supplements as at 30 September 2024 are as follows:
| Entitlement | Single | Couple Each | Couple Combined |
| Fortnightly Amount | $1,144.40 | $862.60 | $1,725.20 |
| Annual Equivalent | $29,754.40 | $22,427.60 | $44,855.20 |
Asset Test
Centrelink will assess the amount of assets that you hold and compare this to the appropriate asset thresholds for the calculation of your entitlement amount. The assets assessed by Centrelink include:
- Financial investments
- Home contents, personal effects and vehicles
- Real estate, annuities, income streams and superannuation pensions
- Sole traders, partnerships, private trusts and private companies
Once your assessable assets exceeds the lower asset threshold, your pension entitlement will begin to reduce. Once it exceeds the upper threshold you will no longer be entitled to a pension.
Thresholds
The thresholds for the asset test as at 30 September 2024 are as follows:
| Lower Threshold | Homeowner | Non Homeowner |
| Single | $314,000 | $566,000 |
| Couple, Combined | $470,000 | $722,000 |
| Upper Threshold | Homeowner | Non Homeowner |
| Single | $695,000 | $947,000 |
| Couple, Combined | $1,045,500 | $1,297,500 |
Tip: Not all assets are tested in the same manner by Services Australia. There may be strategies available to adjust your assets or ownership and increase your pension payment.
Income Test
The income test will include your regular salary if you are still working. Any rental income received less the allowable expenses. When looking at income from your financial assets, Centrelink will not look at the actual level of interest or dividends received. Instead, they will deem your financial assets to earn a set level of income. It does not matter if the income deemed is more or less than the actual amount produced. Once your income exceeds the free area, your pension entitlement will begin to reduce for the additional income earnt.
Thresholds
The thresholds for the income test as at 30 September 2024 are as follows:
| Single – Fortnightly Income | Amount of Pension Reduction |
| Up to $212 (Free Area) | $0 |
| Over $212 | 50c for every dollar over $212 |
| Couple – Fortnightly Income | Amount of Pension Reduction |
| Up to $372 (Free Area) | $0 |
| Over $372 | 50c for every dollar over $372 |
Tip: The Work Bonus will allow you to reduce your assessable income if you continue to work whilst receiving the Age Pension. This is used to encourage pension receivers to continue to be partially self-funded through retirement.
Example
Michael and Rose are looking to see if they are entitled to the Age Pension. They own their own home and have the following assets:
| Asset | Amount |
| Home Contents | $10,000 |
| Motor Vehicles | $20,000 |
| Cash at Bank | $25,000 |
| Superannuation (combined) | $650,000 |
| Total | $705,000 |
As Michael and Rose are not working, the only assessable income is the income deemed from the financial assets. This total amount is less than the free area under the income test. As their total assessable assets exceed the lower threshold of the asset test, they are not entitled to the full age pension under the asset test. As this test results in the lower entitlement of the two, they will be treated under the asset test. The combined fortnightly entitlement for Michael and Rose with this level of assets is $1,020.20. This is the equivalent to $26,525.20 per annum.
If you are not eligible for the Age Pension
The Commonwealth Seniors Health Card does not have an asset test. Additionally, the income test is significantly more lenient than the Age Pension requirements. If you are not eligible for the Age Pension, you may still be eligible for the Commonwealth Seniors Health Card.
Learning More
Want to talk about your personal situation with one of our advisors?