The Australian Age Pension: A Beginner's Guide

Did you know that nearly half of all Australian retirees rely on the Age Pension as their main source of income? For over 25%, it's the only income they have.

As a key part of Australia's social security system, the Age Pension is designed to provide a steady, lifelong income to support older Australians in retirement. While it's not meant to fully replace your working income, it's an essential part of retirement planning for millions.

This guide will break down what the Age Pension is, the three key factors for eligibility, and how much you could receive.

The 3 Keys to Eligibility

Whether or not you can receive the Age Pension comes down to three key factors, as outlined by Services Australia.

1. Age Requirement

The minimum age to qualify for the Age Pension in Australia is 67. While this age has gradually increased over the years, no further increases are currently legislated.

2. Residency Rules

To get the Age Pension, you generally need to have been an Australian resident for at least ten years in total. For at least five of these years, your residency must have been continuous, with no breaks. This rule ensures the pension is reserved for those with a genuine, long-term connection to Australia. There are some exceptions to this rule for specific circumstances.

3. Means Testing

The third factor is means testing, which includes two separate tests:

• The Assets Test: This looks at the value of what you own, including home contents, vehicles, savings, investments, and superannuation.
• The Income Test: This considers the income you receive from sources like work, rent, and financial assets.

Centrelink applies both tests, and your final payment will be based on the test that results in a lower pension amount. Importantly, if you are a homeowner, your principal home is excluded from the assets test.

How Much Can You Get? A Breakdown of the Payment Rates

The amount of Age Pension you can receive is made up of a few different components. The rates below were current for the period of 20th September 2024 to 19th March 2025. These rates are adjusted twice a year, in March and September, to account for changes in the cost of living.

• Basic Rate: The maximum basic rate was $1,047.10 per fortnight for singles and $789.30 per fortnight for each member of a couple.
• Pension Supplement: This is an extra amount automatically included with your payment to help with costs like pharmaceuticals, utilities, and internet. The maximum amount was $83.20 per fortnight for singles and $62.70 per fortnight for each member of a couple.
• Energy Supplement: This is another automatic payment to help with energy costs. It was $14.10 per fortnight for singles and $10.60 per fortnight for each member of a couple.

Adding these together, the total maximum fortnightly payment was:

• For Singles: $1,144.40 (or $29,754.40 per year).
• For Couples: $862.60 each (or $22,427.60 per year for each person).

The Pensioner Concession Card: A Major Bonus

If you are eligible for the full or even a part Age Pension, you will automatically receive a Pensioner Concession Card. This is an incredibly valuable benefit that can save you thousands of dollars each year through:

• Cheaper prescription medicines.
• Reduced utility bills and council rates.
• Reduced public transport fares.
• Discounted vehicle registration and driver's licence renewals.

The Assets Test Explained

The assets test has different thresholds depending on your relationship status and whether you own your home. The figures below were for the Sep 2024 - Mar 2025 period.

• For Singles: The lower threshold was $314,000 for homeowners and $566,000 for non-homeowners.
• For Couples (combined assets): The lower threshold was $470,000 for homeowners and $722,000 for non-homeowners.

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

The Income Test Explained

The income test also has different thresholds for singles and couples. The figures below were for the Sep 2024 - Mar 2025 period.

• For Singles: You could earn up to $212 per fortnight before your pension was reduced. For every dollar you earned over that, your pension decreased by 50 cents.
• For Couples (combined income): You could earn up to $372 per fortnight before your pension was reduced. For every dollar you earned over that, each member's pension decreased by 25 cents.

A Quick Note on Deeming

When it comes to your financial assets (like bank accounts and super), the income test doesn't look at the actual income you earn. Instead, it uses "deeming rates" to estimate how much income your assets are generating. The deeming rates during this period were 0.25% on the first portion of your assets and 2.25% on the rest.

How the Age Pension is Paid

Once your application is approved, your Age Pension payments are automatic and paid fortnightly directly into your nominated bank account. You don't need to reapply unless your circumstances change.