The Age Pension

The Age Pension is a government payment designed to support eligible older Australians to live in retirement. It remains the main source of income for most elderly Australians, with 2018-2019 ABS Census data finding 30% of women and 7% of men retired with no personal income, and therefore relied on government support.

The purpose of superannuation (super) is to ensure that as many people as possible can access an adequate income in retirement, higher than the Age Pension. There will always be a proportion of Australians who will rely on the Age Pension, either as a supplement to their super and other payments or as a standalone payment.

Age Pension Eligibility

To be eligible for the Age Pension, you must generally:

• be of Age Pension age, which is 66 years and 6 months for those born between 1 July 1955 and 31 December 1956, and 67 years for those born from 1 Jan 1957 onwards
• be an Australian resident for at least 10 years in total. Although exceptions may apply, see Residence Rules on the Services Australia website
• meet requirements under income and asset tests. The Age Pension is means tested, so your income and assets must fall below certain thresholds.

Learn more about the Age Pension eligibility.

Can I apply for the Age Pension if I’m still working?

Yes, if you’re at the eligible Age Pension age and still doing paid work, you can apply. Your income will be factored in as part of the income test and will impact how much pension you may receive.

Work Bonus

In the instance that you are eligible for the Age Pension and are still working you could qualify for a Work Bonus. The Work Bonus reduces the amount of employment income or eligible self-employment income that’s applied to your rate of pension under the income test.

It’s a portion of your earnings (the first $300 per fortnight for a single person) which can accrue up to $7,800.

There are some rules regarding what type of work is eligible for the Work Bonus. For example, work done for an employer and earning a salary is generally included. Also included is self-employment work, such as if you work as a plumber or artist. Work you do for yourself, however, like administering your own finances or domestic work at your own residence, is excluded.

The Work Bonus is automatically applied, provided you inform Centrelink of any income you receive. Learn more about the Work Bonus.

Am I eligible for the Age Pension if I receive super payments?

When you stop working there are three main income sources you might rely on:

1. Voluntary personal savings and investments
2. Compulsory super savings
3. Age Pension.

Different income source combinations as well as eligibility requirements, can affect the amount you might receive.

If you’re drawing down from your super as an income stream (also known as a super pension or annuity), you could still be eligible for a part pension. The amount will be determined by how you access your super, how much super you receive as well as other income and assets you have.

Applying for the Age Pension

How do I claim?

If you meet eligibility rules, you can make a claim for the Age Pension online on the Centrelink website either yourself, or nominate someone else to claim on your behalf.

You’ll likely be required to provide supporting documents.

Income and assets test

If you apply for the Age Pension, Centrelink will assess your income and assets from all sources and find out how much you’re eligible for, If you’re a member of a couple, your partner’s income and assets are also included.

To find out more about what constitutes income and assets in the test, see our articles:

• The Age Pension income test
• The Age Pension assets test

Overseas pensions

If you’ve lived or worked in another country for some time, you may be eligible for a pension in that country. Centrelink may ask you to apply for the overseas pension and advise of the outcome before they consider your claim for an Australian Age Pension.

Read more about international social security agreements.

How much can I get on the Age Pension?

This depends on the outcome of your income and assets test, and on whether you’re a member of a couple. If you have a partner, their income and assets are factored in alongside your own and this may affect your payment rate.

Maximum rates

The maximum fortnightly rate if you’re

• single is $882.20
• a member if a couple is $665 or $1,330.00 (for partners combined).

Additional supplements, such as the Pension Supplement (which helps cover the costs of utilities and medicines) and the Energy Supplement (which assists with energy costs) are also available. The maximum rates for these are:

• Pension Supplement (per fortnight): $71.20 if you’re single, $53.70 if you’re a member of a couple
• Energy Supplement (per fortnight): $14.10 if you’re single, $10.60 if you’re a member of a couple

The government usually updates the Age Pension, Pension Supplement and Energy Supplement rates every March and September. This figure is accurate as at 20 September 2021.

Transitional rates

Transitional rates apply to those who commenced receiving a part pension on 19 September 2009 or prior.

• The maximum fortnightly transitional rate if you’re single is $793.20
• The maximum fortnightly transitional rate if you’re a member of a couple is $640.60 (or $1281.20 for partners combined)
• Energy Supplement (per fortnight): $14.10 if you’re single, $10.60 if you’re a member of a couple.

Will my Age Pension be reviewed?

If you’re receiving the Age Pension, Centrelink may on occasion review your circumstances to ensure you’re still eligible for the amount you’re receiving. They may

• ask for up-to-date information on your, or your partner’s, income
• ask for Proof of Life documentation if you are over 80 years old and living overseas
• review your income streams, such as income streams from your super.

If your Age Pension is discontinued, or your pension is reduced, you can contact Centrelink to ask for a review of their decision.

What if I’m rejected for the Age Pension?

There may be a number of different reasons why your claim for an Age Pension is rejected. It may be because your income and/or assets exceed thresholds, or something simpler such as you not responding to a Centrelink request for supporting documentation.

If the reason why your claim was rejected is unclear, contact Centrelink to find out more.

If your circumstances change regarding income and assets, you can claim for the Age Pension again in the future. There’s no limit to how many times you claim.

How can I best prepare for retirement?

Super exists so that more people can live off savings, rather than rely on the Age Pension. The more you can save in super over the course of your working life, the longer you can use that money during your retirement, and the less likely you’ll need to rely on the Age Pension.

If you’re thinking about preparing for retirement, we have some useful tools available that may help with your planning.

• Use our pension income calculator to help you figure out what your pension income could be in retirement.
• Learn more on super and the government Age Pension.