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  5. Age pension and super

Age Pension

eligibility and super

Most Australians are eligible for the government Age Pension at some stage throughout their retirement.1 It provides an important safety net, so we’re here to help you understand how it applies to you. 

canva-kitchen-talking-women-retirement
Senior Pacific Islander woman and her mature daughter and grandson cuddling each other in their kitchen at home.

What’s the Age Pension?

It’s a regular fortnightly income from the government that helps eligible Australians pay for basic living expenses. 

Who can receive it?

The Age Pension is intended to help older Australians in need of financial assistance. Although you’ll need to meet age, residency, assets and income test requirements to be eligible, most Australians will receive either partial or full payments.2

Two retired elderly men sitting on a park bench and having fun

Are you eligible

for the Age Pension? 

There are four main requirements you must satisfy to receive the Age Pension.

The minimum age you can receive the Age Pension depends on your date of birth. It’s currently 66 years and six months, increasing to 67 years from 1 July 2023.

Date of birth Age Pension eligibility age 
1 July 1952 – 31 December 1953 65 and six months 
1 January 1954 – 30 June 1955 66  
1 July 1955 – 31 December 1956 66 and six months 
From 1 January 1957 67

It’s important to note that the eligibility age to receive the Age Pension is different from your preservation age which determines when you can access your super. 

You generally need to have been an Australian resident for at least ten years in total, with no break in residence for five of those years. There are a few exceptions, as well as special rules that apply if you were a resident of a country that has an international social security agreement with Australia. 
 
Please note that if you’ve lived outside of Australia, you may be required to apply for a pension through the country you previously resided in as part of your application for the Age Pension. 

Visit the Centrelink (Services Australia) website for more information about residency requirements.

Your eligibility for the Age Pension, and the amount you receive, will depend on the value of your assets and if you’re in a relationship.  
 
Assets are property or items you or your partner own in full or in part, or have an interest in. They can include: 

  • real estate (generally excluding your family home) 
  • money in bank accounts 
  • your super
  • investments outside of super
  • home contents
  • motor vehicles, boats and caravans. 

There are set limits on the total amount of assets you can own. Once the value of your assets goes over the limit, your pension payment will gradually decrease by $3 per fortnight for every $1,000 that you’re over.   

For more information about the assets test, visit the Centrelink (Services Australia) website. 

Your income (and your partner’s income) will be assessed to determine your eligibility for the Age Pension and the amount you receive. Income types considered in the test include: 

  • employment income if you’re still working 
  • rental income from investment properties
  • income from overseas, such as a foreign pension.  

Centrelink also uses a deeming method to calculate your income from financial assets and includes this income in your assessment. Deeming assumes that certain assets earn a set rate of pay, regardless of what they really earn, and applies to assets such as:

  • money in a savings account 
  • investments, such as managed funds 
  • superannuation.  

There are set limits on the total amount of income you can earn. If your income is over these limits, you’ll receive a lower Age Pension payment. 

For more information about the income test, visit the Centrelink (Services Australia) website.

Mother passing a serve of curry and rice to her son at dinner

How does super work with the Age Pension?

Super is the main source of retirement income for many Australians. But a large number of retirees also qualify for some level of government Age Pension payment. These extra payments can help support your super and manage your budget.  
 
The balance between super and the Age Pension is different for everyone. Having an understanding of both can give you confidence about your retirement income. 

The differences between super and the Age Pension

 Super Age Pension 
What’s the purpose? Designed for flexibility and to fund retirement Designed as a safety net in retirement  
When can you access it? Once you reach your preservation age and meet a condition of release. Read more here.  When you reach eligibility age and if you meet the residency, assets and income requirements. See the ‘Are you eligible for the Age Pension’ section above.
Where does the money come from? Self-funded from your employer contributions (e.g. Superannuation Guarantee) and any personal voluntary contributions Government-funded 
How much can you receive? You choose the payment amount and frequency (subject by law to a minimum drawdown amount). You can read more about the guidelines in the Pension Guide.It depends on your assets and income. If you have assets and income over the Age Pension limits, your payment will be lower, or you may be ineligible.  
Can you receive extra payments? Yes, you can withdraw extra lump sums when required No, you’ll only receive regular fortnightly payments if eligible  

 

How does your super
balance impact Age
Pension payments?

Your super can potentially reduce the amount of Age Pension payments that you (or your spouse) are eligible to receive, depending on whether you’re under or have reached the Age Pension age. 

This is because the government uses a means test to determine a person's eligibility for the Age Pension. The test looks at a person’s total income and assets, including their superannuation balance.

Centrelink doesn’t count your super in the income and assets tests if you’re under the Age Pension age. The same rule applies to your spouse. 

However, if you move your eligible super into a pension – Iike a Hostplus Retirement account – your pension account balance is then counted. This means the pension account balance will be included in the income and assets tests, which could impact Age Pension payments (for you or your spouse).

If you have an older spouse who’s receiving government benefits like an Age Pension or a Disability Support Pension, and you are under the Age Pension age, we recommend you have a conversation with one of our licenced financial advisers or Centrelink to understand if setting up a pension account impacts their benefits.  

When you reach your Age Pension age, Centrelink counts your superannuation in both:

  • the assets test – the value is the balance on your latest statement, and
  • the income test under the deeming rules.

It doesn’t matter if your super is sitting in the same account that contributions were being made into, or whether you’ve moved it into a pension account. Now, they’re treated in the same way.  

These rules also apply to your spouse and their super when they’re at their Age Pension age, even if they’re not receiving any payments from Centrelink.

Other benefits
when you retire 

When you retire, you may be eligible for other government benefits and schemes.  

Concession cards

There are several concession cards that are available to older Australians. These include the Pensioner Concession Card, the Commonwealth Seniors Health Card, and Seniors cards which are issued by state and territory governments. The concessions could help you manage your ongoing cost of living in retirement by giving you access to cheaper utility and medical bills, public transport and other goods and services. 

Home Equity Access Scheme

Previously called the Pension Loans Scheme, the Home Equity Access Scheme is managed by Centrelink and allows older Australians to use their home as security to increase their Age Pension payments. The additional fortnightly payments accumulate as a loan with interest, which must eventually be repaid. Repayments can be made at any time, or can be paid in full (for example, when you sell the property or as part of an estate). Visit the Centrelink (Services Australia) website to learn more. 

Read more

Senior Australians and Pensioners Tax Offset (SAPTO)

This tax offset is available to older Australians who are receiving an eligible government pension (like the Age Pension) or allowance. The offset allows older Australians to earn more income without having to pay tax. Visit the Australian Taxation Office (ATO) website to learn more. 

Frequently 

asked questions

Find answers to some of the questions we commonly get asked about the Age Pension. 

You'll need to self-fund your cost of living if you don’t qualify for the Age Pension. Check with Centrelink to find out what other social security benefits you may be eligible for, such as:

  • JobSeeker Payment
  • Disability Support Pension 
  • Carer Payment/Carer Allowance
  • Commonwealth Seniors Health Card 
  • Low Income Health Care Card.

You might also be eligible for a Seniors Card issued by your local state or territory.

As your assets will reduce over time, you could qualify for the Age Pension in the future if you reapply. 

In most cases, your family home is excluded from the Age Pension assets test. If your home is on land that exceeds 2 hectares, however, the excess land is included in the assets test. There are also some exceptions for rural customers and primary producers. Visit the Centrelink (Services Australia) website for details.

Your spouse will receive the Age Pension but you won’t until you become eligible.

Any super that you have won’t be treated as an asset until you reach your Age Pension eligibility age unless you commence a pension, so it’s important to consider your options. Discuss your situation with Centrelink or speak with one of our licensed financial planners. 

You may be able to increase your Age Pension entitlements by:  

  • valuing your personal assets at market value (the amount you could sell them for today) 
  • gifting  
  • purchasing Centrelink-friendly investments, such as funeral bonds and lifetime income products
  • restructuring your assets between you and your spouse.
With several options to consider, all with their unique benefits and risks, it’s important that you seek advice to work out what works best for you. Consider speaking with one of our licensed retirement specialist advisers.

 

1. Based on data from the Australian Bureau of Statistics and Department of Social Services.
2. Source: abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release#income-at-retirement