Purpose of the Age Pension
The Centrelink Age Pension is an income support payment by the government. The Centrelink Age Pension intends to ensure all retirees have a minimum level of retirement income. The Age Pension rates increase March 20 and September 20 each year.
A person may be eligible for the age pension if they meet the following three tests:
- Are age pension age
- Satisfy Age Pension residency requirements
- Have income and assets below the cut-out thresholds
Current Age Pension Rates
Below are the maximum Age Pension per fortnight rates for both singles and couples from the 20th of September 2024. If eligible, you are entitled to the maximum Age Pension amount if you are under both the assets test and income test thresholds. Assets and Income above the thresholds will begin to decrease your entitlements.
|
Per Fortnight
|
Single
|
Couple Each
|
Couple apart due to ill health
|
|---|---|---|---|
|
Maximum basic rate
|
$1,047.10
|
$789.30
|
$1,047.10
|
|
Age Pension Supplement
|
$83.20
|
$62.70
|
$83.20
|
|
Energy Supplement
|
$14.10
|
$10.60
|
$14.10
|
|
Total
|
$1,144.40
|
$862.60
|
$1,144.40
|
Age Pension Age
Men and Women can apply for the age pension once they reach age 67
Age Pension Residency Requirements
To be eligible for the Age Pension, a person must usually have been an Australian resident at least 10 years with at least five of these years in one continuous period.
Agreements exist with some countries that may help a person qualify for the age pension with less than 10 years of residency. Details can be checked with Centrelink.
Income and Assets Test
If eligible to apply, the pension payable amount is calculated under two means tests – the income test and assets test. The test that results in the lower rate of payment is the one that applies.
Age Pension Asset Test
Assessable Assets are assets assessed by Centrelink under the assets test to determine your Centrelink/Veterans’ Affairs entitlements. Centrelink assesses most assets you own. However, some assets are not assessed, most notably being your Principle Residence.
To receive the full pension, your assessable assets must be less then :
|
Status
|
Homeowner
|
Non-homeowner
|
|---|---|---|
|
Single
|
$314,000
|
$566,000
|
|
A couple, combined
|
$470,000
|
$722,000
|
|
A couple, separated due to illness, combined
|
$470,000
|
$722,000
|
|
A couple, one partner eligible, combined
|
$470,000
|
$722,000
|
Assets must be below certain amounts to qualify for the full-age pension under the assets test. Your pension will be reduced by $3.00 per fortnight (single or couple combined) for each $1,000 of assets over the threshold.
To receive a part pension, your assessable assets must not exceed :
|
Status
|
Homeowner
|
Non-homeowner
|
|---|---|---|
|
Single
|
$686,250
|
$938,250
|
|
A couple, combined
|
$1,031,000
|
$1,283,000
|
|
A couple, separated due to illness, combined
|
$1,214,500
|
$1,466,500
|
|
A couple, one partner eligible, combined
|
$1,031,000
|
$1,283,000
|
No pension is payable once assets reach the upper cut-off thresholds above.
The lower (full pension) thresholds are indexed on 1 July each year. The cut-off (part pension) thresholds also increase in March and September in line with pension increases.
Assets are assessed at net market value, but some assets are exempt, such as the home and superannuation (accumulation phase) under age pension age.
Read more on the Asset Test here.
Age Pension Income Test
Assessable income is income sources, including deemed income, assessed by Centrelink under the income test to determine your Centrelink/Veterans’ Affairs entitlements. All income sources will be included in the income test, and combined income is included for a couple.
|
Status
|
Income Free (per fortnight)
|
Income Limit (per fortnight)
|
|---|---|---|
|
Single
|
$212
|
$2,444.60
|
|
A couple, combined
|
$372
|
$3,737.60
|
|
A couple, separated due to illness, combined
|
$372
|
$4,837.20
|
Assessable income is income sources, including deemed income, assessed by Centrelink under the income test to determine your Centrelink/Veterans’ Affairs entitlements. All income sources will be included in the income test, and combined income is included for a couple.
If your income (including deemed income) is below the income free amount above, the full age pension is payable under the income test. The pension will be reduced by $0.50 per fortnight (single or couple combined) for each $1.00 of income over the threshold. No pension is payable if income reaches the income limit.
Assessable income may not be the same as actual income or taxable income. Specific rules apply to determine how much income is assessed on some investments. The most common rule is deeming.
Read more on the Income Test here.
Centrelink and Gifting
Gifting money to family members reduces your assessable assets (and the assessed income) and may increase Centrelink/DVA payments.
However, there are Centrelink rules on the amount of money you can gift. A single person or couple combined can gift $10,000 per financial year, with a limit up to $30,000 over a five-year rolling period. If more than this amount is gifted, the excess amount is a Centrelink ‘deprived asset’. A deprived asset is an assessable asset under the assets test and is subject to deeming under the income test five years from the date of the gift.
Pensioner Concession Card
A Pensioner Concession Card is available if you receive the age pension and entitles you to reduced-cost medicines under the Pharmaceutical Benefits Scheme.
You may also be entitled to various concessions from the Australian Government. These could include:
- Bulk billing for doctor’s appointments (this is your doctor’s decision)
- Higher refunds for medical expenses through the Medicare Safety Net
- Assistance with hearing services
You may also be entitled to various concessions from state and territory governments and local councils. These could include:
- Reductions on property and water rates
- Reductions on energy bills
- Reduced fares on public transport
- Reductions on motor vehicle registration
- Free rail journeys
If you are not eligible for the Age Pension and Pensioner Concession Card, you may be eligible for the Commonwealth Seniors Health Card.
Other Entitlements
A pension supplement is added to the pension payable to help with living expenses. A person renting a home may also be eligible for Rent Assistance to help with the cost of renting.
Updating Centrelink
If receiving the age pension, Centrelink needs to be advised of all changes to personal and financial circumstances. This includes switching investments, gifting money or changes to personal circumstances
Applying and receiving the Centrelink Age Pension is part of your retirement plan. At Progressive Financial Solutions, we offer tailored holistic retirement financial planning services to help our clients fund their desired retirement lifestyle. You can read more about our retirement planning services here.