Age Pension Explained: Rules, Rates & How to Increase Your Entitlements

Want to see what you’re entitled to? Try the Age Pension Calculator and estimate your Age Pension payments.

What is the Age Pension?

The Age Pension is a government payment that helps older Australians cover living costs in retirement.
It’s a safety net — but many retirees with modest savings or investments still qualify for a part or full pension.

Table of contents

1. Eligibility
2. How much you can receive
3. Income & assets tests
4. Deeming rules
5. Examples
6. Ways to increase your pension
7. FAQs
8. Disclaimer

Eligibility

To qualify, you must meet three key tests:

• Age – currently 67 (no further increases legislated)
• Residency – must generally have lived in Australia for 10 years, including 5 consecutive years
• Means testing – based on your income and assets

How much you can receive

Maximum fortnightly payments (as at 20 September 2025)

Includes the Pension Supplement and Energy Supplement.

Income & Assets Tests

Centrelink runs both tests and pays whichever gives you the lower amount.

Assets test (20 Sept 2025)

Your home is exempt, but most other assets are counted — such as super, bank accounts, shares, and investment properties.

Pension reduces by $3 per $1,000 of assets above the threshold.

Income test (20 Sept 2025)

Assessable income includes wages, rent, and deemed investment income.

Pension reduces by 50c for every $1 over the threshold.

Deeming rules

Centrelink doesn’t use your actual investment returns — it uses deeming rates to estimate income.

This simplifies the process and avoids constant reporting, but may under- or over-estimate income when markets move.

Example: Single homeowner

Assets:

• Account-based pension: $300,000
• Cash: $20,000
• Car & contents: $15,000
• Total assessable assets: $335,000

Threshold: $301,750
Amount over: $33,250
Reduction: $33,250 ÷ 1,000 × $3 = $99.75/fortnight

Full rate $1,116.30 − $99.75 = $1,016.55/fortnight

Result: Part pension based on the assets test.

Ways to increase your pension

These are general strategies — always seek personalised advice.

1. Re-structure assets

• Pay down your mortgage
• Renovate or upgrade your home (exempt asset)
• Replace old household items
• Gift within the $10,000 per year / $30,000 per five years limit

2. Use superannuation rules

• If your spouse is under pension age, move assets into their accumulation super (temporarily exempt)
• Make downsizer or spouse contributions to adjust balances

3. Choose income streams wisely

• Some lifetime annuities receive concessional Centrelink treatment
• Review your account-based pension structure for optimisation

4. Plan withdrawals carefully

• Keep only essential cash reserves
• Track spending vs gifting to avoid breaching thresholds

Why planning matters

A few small tweaks can mean:

• Thousands more per year
• Earlier eligibility
• Higher retirement cash flow

The key is planning before you reach pension age.

Try the Age Pension Calculator to estimate your payments and explore strategies to increase them.

FAQs

Can I work and still get the pension?
Yes. You can earn up to $7,800 extra per year under the Work Bonus before payments reduce.

Does super count?
Yes — once you reach pension age.
If your spouse is younger, their super is ignored.

Do I apply on my birthday?
You can apply 13 weeks before turning 67.

Is my home included?
No — your main residence is exempt.

Can gifting cause issues?
Yes — excess gifts are treated as deprived assets for up to five years.

Disclaimer

Figures are accurate as at 20 September 2025.
This guide is general information only and does not constitute financial or tax advice.
Consult a qualified financial adviser before making any decisions.