Age Pension Changes March 2025: New Rates and Thresholds Explained

From the 20th of March 2025, several changes to the Australian Age Pension have taken effect, including new payment rates and updated thresholds for the assets and income tests.

While the increases are modest, understanding how these new figures affect you is a crucial part of managing your retirement income. This guide will cover exactly what has changed and the latest rates you need to know.

What are the eligibility criteria for the Age Pension?

Before we dive into the changes, let's quickly recap the three key factors that determine your eligibility for the Age Pension:

• Age: The minimum age to qualify is 67.
• Residency: You generally need to have been an Australian resident for at least ten years in total, with at least five of those years being continuous.
• Means Testing: Your final payment amount is determined by both an assets test and an income test. Centrelink calculates your entitlement under both tests, and the one that results in the lower pension amount is the one that applies to you.

What were the new Age Pension rates from March 20, 2025?

Due to indexation, the full Age Pension rate saw a slight increase.

• For Singles: The rate increased by $4.60 per fortnight.
• For Couples: The rate increased by $3.50 per person, per fortnight.

The new full pension rates, effective from 20th March 2025 to 30th June 2025, were:

• For Singles: $1,149 per fortnight, which translates to an annual income of $29,874.
• For Couples: $866.10 per fortnight for each person, which translates to an annual income of $22,518.60 for each member of the couple.

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

What changed with the Assets Test in March 2025?

When it comes to the assets test, the lower thresholds did not change on March 20 and remained in place until the 30th of June 2025.

• Homeowners: $314,000 for singles and $470,000 for couples combined.
• Non-homeowners: $566,000 for singles and $722,000 for couples combined.

If your assets were below these limits, you would have received the full Age Pension. For every $1,000 of assets you held above these thresholds, your pension was reduced.

The key change was that the upper thresholds (the cut-off limits) slightly increased. This meant you could hold slightly more assets before your pension was cut off completely. Remember, if you are a homeowner, your principal residence is not included in your assessable assets.

What changed with the Income Test in March 2025?

Similar to the assets test, the lower income limits did not change on March 20.

• For Singles: You could earn up to $212 per fortnight before your pension was reduced.
• For Couples: You could earn a combined $372 per fortnight before your pension was reduced.

However, the upper income limit also slightly increased, meaning you could earn a little more before your pension payment stopped.

Deeming and the Work Bonus

Two other important concepts under the income test are deeming and the Work Bonus.

• Deeming: This is where your financial assets are assumed to earn a set rate of income. The deeming rates and thresholds did not change in March and remained the same until 30th June 2025.
• Work Bonus: This allows pensioners to earn up to $300 per fortnight from employment without it affecting their Age Pension. Any unused amount accumulates in a "Work Bonus balance" up to a maximum of $11,800. This scheme remained unchanged.