What is the Age Pension?
- The Age Pension is considered the ‘safety net’ and is designed to support the basic living standards of older Australians.
- Payments are targeted through means testing to those in need.
- Rates are indexed to keep pace with Australian price and wage increases.
- Most payments are made by Centrelink.
Age pension and superannuation
Planning for retirement involves understanding how your superannuation and the Centrelink Age Pension work together. Many Australians wonder if they’re eligible for the Age Pension while also having superannuation savings. The answer depends on factors such as your age, income, and assets.
Eligibility for the Age Pension
The Centrelink Age Pension is a government-provided income stream designed to support retirees who meet specific criteria. To qualify, you must:
- Be at least 67 years old (depending on your date of birth).
- Meet the residency requirements (generally, you must have lived in Australia for at least 10 years).
- Pass the income and assets tests, which determine how much Age Pension you can receive.
How Superannuation Affects Your Age Pension
Superannuation is designed to help fund your retirement, but it is assessed differently depending on whether you have reached Age Pension age:
- Before Age Pension age – Your super is not counted in the assets or income tests while it remains in accumulation phase.
- After Age Pension age – Superannuation in an account-based pension or as a lump sum is included in Centrelink’s means testing.
This means that the amount of super you have, and whether you take it as a lump sum or income stream, can affect your Age Pension payments.
Income and Assets Tests
Centrelink applies two tests to determine your eligibility and payment amount:
- The Income Test: If you’re drawing an income from your super, this is assessed under deeming rules, which assume your super balance earns a set rate of return.
- The Assets Test: Your total assets, including super (if in pension phase), investment properties, and other savings, must be below a certain threshold to qualify for a full or part Age Pension.
For more information visit Services Australia.
Services Australia
Can you claim the Age Pension?
To be eligible, you must be all of the following:
- Age Pension age
- Be an Australian resident with at least 10 years of residency
- Under the income and asset limits
- There are also other rules you need to meet
How much is the Age Pension?
- Payment rates depend on income and assets
- Different rates apply to singles and couples
- Rates are reviewed regularly to reflect the changes in the Consumer Price Index (CPI)
- You may also receive additional supplements
How do I apply for the Age Pension?
- Prepare the necessary documentation
- Set up your online accounts – you will need a Centrelink account linked to myGov
- Apply online within or use paper forms
- Track your claim's progress online or through the app
- Receive results electronically or by mail
- Request a review if needed
What is the Assets Test for the Age Pension?
- The Assets Test determines Age Pension eligibility
- It assesses what you and your partner own, including superannuation
- It includes assets and income in and outside of Australia
- You may miss out on the pension if your assets are within limits
- Centrelink uses both income and assets tests to determine eligibility
What's included in the Assets Test:
- Super account balance
- Money in a bank account
- Financial investments (e.g., shares)
- Cars and other vehicles
- Home contents or household items
- Real estate/property (not your primary residence)
- Annuity or pension from superannuation
- Gifts given or sold for less than market value
- Businesses or partnerships/trusts
- Inheritance from a deceased estate
Source: Centrelink (Services Australia), 2023.
Frequently Asked Questions (FAQs) - The Age Pension
Yes, you can have both superannuation and receive the Age Pension, but how they interact depends on your circumstances and the pension rules in Australia.
Your super may affect your Age Pension eligibility because the Australian Government applies income and asset tests to determine how much you can receive. If your super balance is high, it could reduce your payments or even make you ineligible for the Age Pension.
The government will normally conduct an ‘asset test’ which assesses all asset types, this includes your superannuation. The limits for a pension varies depending on the value of your assets. Additional details are available on the Services Australia website.
The eligibility age for the Age Pension in Australia depends on your date of birth. The minimum pension age is currently 67 years.
You can find more information about superannuation and the Age Pension on the Services Australia website. This official government website provides up-to-date details on eligibility, payment rates, income and asset tests, and how to apply.
