Make the most of the Age Pension

When it come to the Age Pension, it’s not a matter of all or nothing. If you don’t qualify for the full amount, you may be entitled to a part pension. 

As you approach 67, which from 1 July 2023 is the minimum age for all applicants, you should check your eligibility to receive the pension in terms of your age, assets and length of residence in this country.  

You must also:

• Be an Australian resident (that is, living in Australia on a permanent basis), although not necessarily a citizen.

• Be in Australia on the day the claim is lodged.

• Satisfy government requirements on the length of time spent in Australia over your lifetime. In general, you will only qualify if you have spent 10 years or more in this country, five of them in a row.

According to the Department of Social Services, you can receive a certain amount of income before your benefit starts to be reduced. This amount may comprise income from investments, earnings or other sources, and is known as the “income-free area”.

For each dollar of income over the income-free area, the single pension is reduced by 50 cents. Couples’ combined pensions are reduced by 50 cents. This means that for a pensioner couple, their individual pensions are reduced by 25 cents a fortnight for each dollar of income that the couple has over the income free area.  

The “Work Bonus” allows seniors to earn $7,800 a year without facing any penalty. Until 31 December 2023, that maximum has been increased to $11,800. National Seniors Australia is advocating for an extension of this scheme, to allow pensioners to earn more. 

There is also a pension assets test to ensure that people with substantial assets — property or possessions (not including the family home or other exemptions) — use those assets to meet their day-to-day living expenses before calling on the social security system for support. 

Financial assets are subject to deeming, a formula for establishing the income you receive from those assets. Because of market fluctuations, deeming assumes that your assets earn a set rate of income, no matter what they really earn.