Australian Government Aged Pension


Government Benefits - Age Pension

The Age Pension provides income support for people in retirement. To be eligible, a person must:

  • First meet an age requirement (this will depend on your current age and when you were born)

  • Meet residence requirements, and

  • Meet the Assets and Income test, which will determine the level of income support.

When assessing your eligibility to receive the Age Pension, Centrelink use two tests to determine your level of entitlement. These are the Assets test and the Income test. When Centrelink applies these tests, they use whichever test that produces the lower payment. To claim the pension, forms should be obtained from any Centrelink Office or their website. Claims should be made shortly before eligibility as payments cannot be made for any period prior to the date of claim. If you are eligible for the Age Pension, you will receive a fortnightly payment and other benefits which may include Rent Assistance and the Pension Supplement (which helps eligible recipients of a Centrelink pension meet the costs of daily household and living requirements like telephone, internet, utility bills and pharmaceutical costs).

Qualifying Ages for the Age Pension

The current qualifying age is 65 for everyone.

Commencing from 1 July 2017 (that is, if you were born after 1 July 1952), the Age Pension qualifying age for both men and women will be increased in six month increments every two years. This means that from 1 July 2023 (or if you are born after 1 January 1957) the qualifying age for the Age Pension will be 67. In the 2014 Federal Budget, the Government announced further increases to the qualifying age, with a proposal to continue the six month increments from 1 July 2023 to 1 July 2035. This means that the qualifying age may increase to 70.

The current and proposed rules are detailed in the following table:

The Assets Test

The Assets Test is designed to limit access to Centrelink benefits for a person with substantial assets. Pensioners are entitled to a certain value of assets before the maximum pension entitlement is reduced. The applicable thresholds depend on whether or not the applicant is part of a couple, and whether they are a homeowner or non-homeowner.

The Income Test

Under the Income Test, pensioners are entitled to earn a certain amount of income per fortnight before the maximum benefit is reduced. This income limit is reviewed on a regular basis. Where recipients are members of a pensioner couple (including de facto), Centrelink assess the combined income of the couple against the partnered allowable income limit.

Can I receive the Age Pension if I am working?

Yes. The Government encourages people of Age Pension age to continue working, and does this by allowing you to keep more of your employment income for short periods without impacting your Age Pension entitlement. This is called the Work Bonus. The Work Bonus automatically applies to your eligible employment income and does not need to be applied for. The Work Bonus is applied to the Income Test as follows:

  • The first $250 of employment income per fortnight is excluded from the Income test.

  • If you earn less than $250 per fortnight, the unused portion can be accrued and used to offset employment income in future income years, as it will be added to a Work Bonus balance. The balance can be accumulated to a maximum amount of $6,500 and can be offset against any future employment income that you earn above $250 in a fortnight.

The Work Bonus can be deferred so that regardless of how much you earn or the hours that you work in a year, all eligible pensioners can have up to $6,500 of employment income offset each year. The Work Bonus is not applied to certain types of income including leave payments if you have been terminated from your employment or self-employed income.

If your circumstances change

You need to tell Centrelink when your circumstances change. For example, if you or your partner: start or stop working, get a lump sum payment, go into care, or move or sell your house. You need to notify Centrelink within 14 days in case this affects your Age Pension payment. For more information including eligibility and level of payments please visit your local Centrelink office or go to their website at www.humanservices.gov.au.

For a confidential discussion about your retirement planning, including entitlement to government benefits, please contact us on 03 9935 5233 to set an appointment at our Little Collins Street office in Melbourne CBD.


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