Understanding Age Pension eligibility and payments

Last updated on 28 September 2023

Funding Your Retirement

Older couple discussing their retirement plan — These are vital areas that need to be accounted for when making your retirement plan, including where the Age Pension comes in. [Source: Shutterstock]

Key points:

The Age Pension is a support payment for eligible older Australians
Your eligibility for this pension depends on your income and assets
How much you receive can depend on your current financial situation
Your home will be considered in your application for the Age Pension
Your pension will be impacted if you travel outside the country for more than six weeks

What is the age pension?

The Age Pension is a support payment from the Federal Government that you can access once you reach the pension age and if your income and/or assets are under the applicable limits. It is one of a network of income support payments for Australians working less hours or not working at all, also including the Disability Support Pension and carer payments.

The Age Pension can support you to be able to afford everyday living expenses such as food, medical services and housing costs, and to engage in the community.

It can also help you to maintain your financial independence and to live at home for longer.

Alongside the Age Pension, which is paid through Centrelink, you may be able to receive financial support from the Government through other Services Australia payments. These include rent assistance, a mobility allowance if you are unable to use public transport, a Remote Area Allowance to help with the cost of living away from services and the Pensioner Concession Card for access to cheaper healthcare, medication and other discounts.

You can receive the Age Pension straight away once you reach the eligible age or can start it at a later time for example after your superannuation is under the applicable income and asset limits.

Who is eligible?

The eligible age for the Age Pension is:

65 if you were born before July 1, 1952
65 years and six months if you were born between July, 1 1952 and December 31, 1953
66 years if you were born between January 1, 1954 and June, 30 1955
66 years and six months if you were born after July 1, 1955
From July 1, 2023 the eligible age will be 67 years for all people born on or after January 1, 1957

You also have to be an Australian resident to receive the Age Pension.

Information about applying for the Age Pension and who can help you with the process is available in our article, ‘What do I need to prepare for my Age Pension application?‘

Depending on your circumstances you may be able to access either a full pension or only a part pension, so it is important to understand that any changes in your circumstances need to be reported to Centrelink as they may affect your pension rate.

How much is the basic pension in Australia?

The maximum basic payment rate for the full pension (as of March 20, 2023) is $1,064.00 a fortnight for a single person or $1,604.00 for a couple combined. There is a Pension Supplement of a maximum of $78.40 for a single person and $118.20 for a couple, as well as an Energy Supplement of $14.10 for a single person and $21.20 for a couple can also be added to the basic rate each fortnight.

People who were receiving a pension before the latest income test was introduced, on September 19, 2009, are given a transitional pension rate so they receive more equal payments to what other pensioners have been receiving since 2009.

The maximum transitional rate is $887.60 for a single person and $716.10 for a couple — not combined (as of March 20, 2023) per fortnight. However, people receiving the transitional rate are also able to get the Energy Supplement at the same rate.

What if I own a home?

If you own a home, that can impact how much pension you can receive. You will be subject to an income and assets test to determine how much the Government will pay you. You can receive the full pension if your assets are not more than the current limit, which is up to $301,750 for a single person or up to $451,500 for a couple combined (as of July 1, 2023).

If you aren’t a homeowner, you can receive the full pension with up to $543,750 in assets as a single person or up to $693,500 in assets as a couple combined.

You don’t have to be retired to receive the Age Pension but if you continue working past the Age Pension age it can affect how much of the pension you receive.

The income test will look at your, and your partner’s current income, including superannuation. If you are over the limit, then you may only be eligible for a part pension.

Your pension income will reduce by 50 cents for each dollar of income you earn over $204 as a single person or 50 cents for each dollar over $360 as a couple.

There are cut off points for the Age Pension and if you earn over a certain amount in a fortnight, you will receive no payment for that fortnight.

The current cut off points for the Age Pension (as at July 1, 2023) are $2,332.00 for a single person or $3,568.00 for a couple per fortnight. You will have a higher cut off point if you receive the Pension Work Bonus.

What if I want to travel or live abroad?

Travel can also affect your pension, but usually only if you’re outside of Australia for more than six weeks.

If you do holiday overseas for longer than six weeks, your pension supplement and energy supplement will stop being paid, but you will still receive the Age Pension.

You can continue to receive the Age Pension if you move overseas, but this depends on how long you live overseas for, how long you lived in Australia and what Australia’s arrangements are with the country you move to.

More information about how pension rates are worked out is contained in our guide to what you need to know about the pension.

Your super funds have a complex relationship with the Age Pension as a type of income stream and it is best to speak to a financial adviser about how this works. The adviser will also be able to explain how you can access pensions and any impact they may have on accessing aged care services.

For financial advice call 1300 863 216 or search for a financial adviser online.