Your Age Pension explainer: what you need to know

Key points:

• The Age Pension is usually reviewed and increased every March, July and September
• You are still able to work and receive the pension, it will be less than a full pension
• Extra supplements can be applied on top of your Age Pension if you meet the criteria

With the aged population expected to have incredible growth over the next 10 years, more people will be looking to the Age Pension to assist them during their retirement.

Accessing the Age Pension requires a lot of documentation to get approved for the social support.

So, how do I know if I am eligible for the Age Pension and how do I apply?

What is it and what can I get?

The Age Pension is a fortnightly social support payment that is available for people over the retirement age who meet all the necessary criteria.

The Age Pension maximum base rate, per fortnight, is $1064.00 for single people and $1,604.00 for couples [combined], as of March 30, 2023. The rates are usually reviewed and potentially raised every March, July and September.

The Pension helps older Australians to meet the cost of living after they retire or partially retire. The Age Pension is one of the pillars in the Federal Government’s retirement system. However, critics of the Age Pension have routinely cited the cost of living crisis, rising cost of rent and growing life expectancy relative to the age and means of retirement as a point of contention in Government Pensions.

Eligibility

As of July 1, 2023, the Age Pension age has risen to 66 years and six months for people born between July 1, 1955 – December 31, 1956. For everyone after January 1, 1957, the Age Pension age is 67.

To receive the Age Pension you need to be an Australian citizen or have lived in Australia for at least 10 years, unless you are a refugee. You will be assessed for the Age Pension with either an income test or asset test to find out if you are eligible.

An income test will look at your, and your partner’s current income, including superannuation. If you are over the limit, then you may only be eligible for a part Pension.

Your Pension income will be reduced by 50 cents for each dollar of income you earn over $204 as a single person or 50 cents for each dollar over $360 as a couple, as of July 1, 2023.

There are cut off points for the Age Pension if you earn over a certain amount in a fortnight, you will receive nothing from Centrelink for that time period.

The current income cut-off points for the Age Pension are $2,332.00 for a single person or $3,568.60 for a couple [combined], per fortnight. You will have a higher cut off point if you receive the Pension Work Bonus.

An asset test looks at the value of your assets to determine how many social payments you will receive. Assets are properties or possessions you own or part own, including assets you have overseas.

To receive a full Pension, your assets must not be above $301,750 as a single homeowner or $543,700 as a single non-homeowner, or for a couple your assets must not be above $451,500 as a homeowner or $693,500 as a non-homeowner, as of July 1, 2023.

With both the income and assets tests, if you are over the limit, it doesn’t mean you won’t get a Pension — it may just be a lower Pension amount.

Part Pension

If your assets or income are above the Age Pension limit, then you might still be eligible for a Part Pension.

This will be figured out by Centrelink based on the amount of assets you have and income you receive.

Many people who are close to retirement and still work part time can receive a Part Pension. They may also be eligible for a Pension Work Bonus.

To receive a Part Pension, your assets must not be above $656,500 as a single homeowner or $898,500 as a single non-homeowner. For a couple, your assets must not be above $986,500 as a homeowner or $1,228,500 as a non-homeowner, as of July 1, 2023.

Transitional rates

Transitional rates are for Pensioners who were receiving a Pension before 19 September 2009. The transitional rate was implemented to cover Pensioners who would normally get less Pension due to the new income test introduced in 2009.

The current transition rates are $887.60 for a single person or $716.10 for a couple, as of March 30, 2023.

Your asset test and income test results are compared under both the current Pension rate and the transitional rate. You’ll be paid the current rate of the Pension if that is the same or higher than the transitional rate.

If you are on a transitional rate of the Pension, there are cut off points where your Pension is cancelled if your assets get over a certain point.

Does it have to be a fortnightly payment?

Everyone on the Age Pension will receive their payment fortnightly, however, there are some instances where you can receive these payments weekly.

If you are at financial risk and arrange for weekly payments through a Social Service Government program, you do not receive any more pay than you would be eligible for and your fortnightly payment is simply split into smaller payments.

To receive this, you will need to talk to Services Australia about why you require this payment structure. They will ask you about your budget and rent, money problems you are experiencing, and questions about where you live.

You can apply for the weekly option by calling the Centrelink Older Australians line on 13 23 00 or going to your nearest Centrelink.

Extras on top of the Age Pension

There are additional payments, supplements or top ups you can receive on top of the Age Pension if you meet the eligibility criteria.

In general, you are likely to receive extra supplements on top of your Age Pension, including the Maximum Pension Supplement, which is $78.40 for single people and $59.10 for couples [each]. In addition, you might be able to claim the Energy Supplement, $14.10 for single people and $10.60 for couples [each].

Other extras include:

People on the Age Pension are eligible for the Carer Allowance if they provide daily care to a person with disability or someone who is frail at home.

For people who receive the Age Pension and also pay rent, fees at a retirement village, lodging and/or board, or site or mooring fees may receive Rent Assistance.

People who receive an income support payment and cannot use public transport without assistance — yet, need to travel for work, study or volunteering — may be eligible for Mobility Allowance.

There is also Remote Area Allowance for people who receive an income support payment and live in a remote area.

Pension Work Bonus is for Pensioners who still work, as it increases the amount a Pensioner can earn before it impacts the Pension rate.

The Pensioner Concession Card provides you access to cheap health care, medicine or community discounts.

Once approved:

If you are approved for the Age Pension, you need to keep Centrelink up to date with any new changes in your life.

You have 14 days to tell Centrelink if you are about to travel overseas, if you or your partner begin getting employment income, or if your personal circumstances change.

Changed circumstances can include a name change, new address, if there are changes to your income or assets or your partner’s income or assets, if the relationship with your partner finishes or if a marriage occurs, if you move in with your partner or move out from living with your partner, or if your partner dies.

If you don’t let Centrelink know, you may receive your normal amount of Pension and Centrelink will try to get this money back once you update them about your changed circumstances. You could also be charged with fraud if you misled Centrelink on purpose.

Are you intending to go onto the Age Pension straight into retirement or do you have enough retirement savings to last a few years? Tell us in the comments below.