Age Pension Changes from 1 July 2025: Your Complete Guide

Staying informed about the latest Age Pension updates is crucial for ensuring you receive your full entitlements. This post breaks down the key changes to the Age Pension rates and rules that came into effect on July 1, 2025, to help you understand how they might impact your financial situation.

Who is eligible for the Age Pension?

To qualify for the Age Pension, you must meet three main criteria:

• Age: You must be 67 years of age or older.
• Residency: You generally need to have been an Australian resident for at least 10 years, with a continuous residency of at least five of those years.
• Means Testing: Your pension amount is determined by both an assets test and an income test. The test that results in a lower pension payment will be the one applied to you.

Did the full Age Pension payment rate change on July 1?

It's important to note that the full Age Pension rates themselves did not change on July 1, 2025. These rates are indexed twice a year, on March 20 and September 20. The current rates, effective until September 19, 2025, are:

• Singles: $1,149 per fortnight, which equates to an annual income of $29,874.
• Couples (each): $866.10 per fortnight, resulting in a combined annual income of $22,518.60 for each person.

These figures include the basic pension rate, the pension supplement, and the energy supplement.

What extra benefits are available?

Even if you only qualify for $1 of the Age Pension, you'll receive a Pensioner Concession Card, which provides a range of valuable discounts and benefits. Additionally, if you're a private renter, you may be eligible for Rent Assistance. The amount of Rent Assistance you receive depends on your rent and relationship status, and these rates are also indexed on March 20 and September 20.

What were the key changes to the Assets Test thresholds?

From July 1, 2025, both the lower and upper limits of the assets test have been increased. This means you can have more assets before your pension is affected. Here are the new thresholds:

For Homeowners:

• Singles: You can have up to $321,500 in assets.
• Couples (combined): You can have up to $481,500 in assets.

For Non-Homeowners:

• Singles: You can have up to $579,500 in assets.
• Couples (combined): You can have up to $739,500 in assets.

If your assets are below these lower thresholds, you will receive the full Age Pension. For every $1,000 in assets you have over these thresholds, your pension will be reduced by $3 per fortnight if you are single, and $1.50 per fortnight for each member of a couple. It is important to remember that for homeowners, your principal residence is not included in your accessible assets.

What's new with the Income Test thresholds?

The income test thresholds have also seen an increase. From July 1, 2025, you can earn more before your pension is reduced. The new thresholds are:

• Singles: You can now earn up to $218 per fortnight before your pension is reduced. For every dollar you earn over this amount, your pension will be reduced by 50 cents. The Age Pension will stop completely if you earn $2,516 or more per fortnight.
• Couples (combined): You can now earn up to a combined $380 per fortnight before your pension is reduced. For every dollar you earn over this amount, each member's pension will be reduced by 25 cents. The pension will stop for both members of a couple if you have a combined income of $3,844.40 or more per fortnight.

What changed with the Deeming Rates?

Deeming is used to assess the income from your financial assets. While the deeming rates themselves have not changed, the threshold at which the higher rate is applied has increased. From July 1, 2025, the deeming rates are:

• 0.25% on the first $64,200 of financial assets for singles, and the first $106,200 for couples combined.
• 2.25% on any financial assets above these thresholds.

This increase in the lower deeming threshold can result in a higher pension payment for those who are income-tested.

How does the Work Bonus help pensioners?

The Work Bonus allows pensioners to earn up to $300 per fortnight from employment without it affecting their Age Pension. Any unused portion of this fortnightly bonus accumulates in a "Work Bonus balance," up to a maximum of $11,800. A one-off boost of $4,000 to your work bonus balance may also be available, depending on when you claim. This means you could potentially earn up to $11,800 before your pension payments are affected. It is important to note that income from investments, rental properties, or passive business activities does not qualify for the Work Bonus.

What do these changes mean for you?

These updates to the Age Pension system have several positive implications for pensioners:

• Increased Lower Thresholds: Some individuals who were previously receiving a reduced pension may now be eligible for the full Age Pension.
• Increased Upper Thresholds: Some people who were previously ineligible for the Age Pension may now qualify for a small pension payment and gain access to the valuable Pensioner Concession Card.
• Asset-Tested Pensioners: Those who are asset-tested are likely to see a small increase in their Age Pension payments.

By understanding these changes, you can better navigate the Age Pension system and ensure you are receiving the support you are entitled to.