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Age Pension

Your retirement income might include a pension payment or allowance from the government.

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Qualifying for the Age Pension

To qualify for the Age Pension, you must meet age and residency requirements. Centrelink then works out how much Age Pension you are eligible for, based on your income and assets.

Age Pension age has been gradually increasing from 65 to 67 years. National Seniors stopped the push to increase Age Pension age to 70.

Your birthdateYour Age Pension ageDate of Age Pension age change
1 January 1954 to 30 June 195566 years1 July 2019
1 July 1955 to 31 December 195666 years and 6 months1 July 2021
On or after 1 January 195767 years1 July 2023

How the Age Pension is calculated

Generally, the more wealth you have the less pension you will receive.

There are two tests Centrelink applies to assess your wealth - the income test and the assets test.

After Centrelink applies both the assets and income tests, it gives you a pension based on the test that calculates the lowest pension amount.

Assets v income tests

What is the assets test?

The assets test is applied to all your assets, except your family home.

A certain amount of these assets is exempt from the test.

This depends on whether you are single or a couple, and whether you own your home or not. This is the assets test threshold.

A taper rate is applied beyond this threshold, which reduces your pension at a rate of $3 per $1,000 of assets.

What is the income test?

To assess your income, Centrelink combines all your sources of income to provide a fortnightly estimate. This includes the income you are deemed to receive from your financial assets.

Financial assets include bank accounts, shares, wages, bonds or managed investments.

The deeming rate applied means it doesn’t matter what you actually earn on your financial assets.

According to the government, your earnings should be in line with the deeming rate. This will be factored into the calculation of your pension.

A taper rate also applies to the income test. If your income exceeds $190 per fortnight, for every $1 of income you lose 50c of pension.

Asset test v income test

Asset test v income test

If the assets test gives a lower pension, then this will be your pension.

If the income test estimates a lower pension, then this will be your pension.

Age Pension Service

Age Pension Service

Get faster and easier access to all your Age Pension entitlements with our partners, Retirement Essentials.

You can even work out your entitlements with the help of their easy-to-use calculator!

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Become a member

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Older Australians deserve certainty and fairness when it comes to their retirement income.