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The Age Pension in Australia helps millions of Australian retirees fund their retirement lifestyle. But how much money and what assets can you own before it affects your Age Pension income stream?
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- The Age Pension in Australia helps millions of Australian retirees fund their retirement lifestyle. But how much money and what assets can you own before it affects your Age Pension income stream?
- What is the Age Pension?
- Who is Eligible for the Age Pension?
- How Much is the Age Pension?
- How Much Income Can You Earn Before Losing the Age Pension?
There are many benefits to receiving a pension, even a part pension, but there are limits to how much income or how much property you could have in order to qualify.
The amount of money you receive from the age pension you receive depends on your age, wealth and income. It can be affected by the amount of money you have in your bank account as well as in your super fund.
What is the Age Pension?
The Age Pension is designed to provide income support to Australian retirees. It is provided by the Australian Government as a financial safety net so older Australians in retirement can afford to support themselves without a working income.
Pension rates are indexed to ensure they keep pace with Australian price and wage increases.
The Age Pension is paid to people who meet age and residency requirements, subject to an income test and an asset test.
Who is Eligible for the Age Pension?
Generally, to be eligible for the Age Pension, you must:
- be age 66 or over, depending on when you were born
- be an Australian resident and have lived in Australia for at least 10 years
- meet the income and asset tests
Just one-third of Australians are eligible for the annual age pension. Most retirees receive too much income (from their superannuation and investments) and are ineligible for the age pension.
If you get the Age Pension, you may also be eligible for other government benefits:
- Centrepay — a free direct debit (automated bill paying) service available as a regular deduction from your Centrelink payments.
- Work Bonus — a payment that helps you earn more without reducing your pension.
- Pensioner Concession Card — see Concession cards, below.
How Much is the Age Pension?
The amount of money you will receive from the age pension will be determined by your eligibility and income and assets tests.
Pensions are fixed through the year which means the figures may also change.
Normal rates (20 March 2023 to 19 September 2023)
| Per fortnight | Single | Couple each | Couple combined | Couple apart due to ill health |
| Maximum basic rate | $971.50 | $732.30 | $1464.60 | $971.50 |
| Maximum Pension Supplement | $78.40 | $59.10 | $118.20 | $78.40 |
| Energy Supplement | $14.10 | $10.60 | $21.20 | $14.10 |
| Total | $1064.00 | $802.00 | $1,604.00 | $1064.00 |
Transitional rates (20 March 2023 to 19 September 2023)
Some people who were getting part pensions on 19 September 2009 are on transitional rates. This is until they catch up with the current normal rates.
| Per fortnight | Single | Couple each | Couple combined | Couple apart due to ill health |
| Maximum rate | $873.50 | $705.50 | $1411.00 | $873.50 |
| Energy Supplement | $14.10 | $10.60 | $21.20 | $14.10 |
| Total | $887.60 | $716.10 | $1432.20 | $887.60 |
However, some things that will affect your age pension income include:
- income and assets test
- your relationship status
Are You Eligible for the Age Pension?
Get peace of mind and find out with the help of a finance expert by booking a complimentary call with our team.
How Much Income Can You Earn Before Losing the Age Pension?
You can earn up to a certain level of income before your age pension payments start decreasing.
| FAMILY SITUATION | TO RECEIVE THE MAXIMUM AGE PENSION, YOUR INCOME MUST BE BELOW: | YOU WON’T RECEIVE THE AGE PENSION IF YOUR INCOME EXCEEDS: |
| Single | $190 a fortnight | $2,318.00 a fortnight |
| Couple | $336 a fortnight | $3,544.00 a fortnight |
How Do the Age Pension Assets Test and Income Test Work?
To claim a full pension, you must pass the age pension asset test.
You will also need to pass the income test, which assesses your ongoing income levels in retirement.
You also need to reach the eligibility age and be an Australian resident to take the Australian age pension scheme.
The income and assets test measure your income and the value of your assets to assess your potential eligibility for the Age Pension – both the full-age pension and the part-age pension.
These tests measure your earning potential and the value of your assets (your investments etc.). If your earning potential is over a certain amount, it will reduce your pension payment.
Your income includes money you receive from:
- employment
- pensions
- annuities
- investments
- earnings outside Australia
- salary packaging
What Counts as Assessable Assets for the Assets Test?
Your assets can include:
- investment properties
- caravans, cars, and boats
- business assets
What Assets Are Exempt from the Assets Test?
There are certain assets exempt from the assets test.
Your house is not considered an asset if you live in it. Also, prepaid funeral products and housing bond payments received upon admission into an age are exempt.
The current asset tests limit for total age Pension is indexed on 1 July each year. Limits for part pensions are indexed in March, July, and September.
What Assets Can You Have Before Losing Your Pension?
Age Pension Asset Limits (20 March 2023 to 19 September 2023)
One of the most common questions that retirees ask is “How much money can I have before it affects my age pension payment?”
The key limits are as follows:
To receive a full pension, assets (excluding the value of the primary residence) must be less than:
| Your Situation | Homeowner | Non-Homeowner |
| Single | $280,000 | $504,500 |
| Couple (combined) | $419,000 | $643,500 |
| Couple, separated due to illness (combined) | $419,000 | $643,500 |
| Couple, one partner eligible (combined) | $419,000 | $643,500 |
To receive at least a part pension, assets must be less than:
| Your Situation | Homeowner | Non-homeowner |
| Single | $634,750 | $859,250 |
| Couple | $954,000 | $1,178,500 |
| Couple, separated due to illness (combined) | $1,128,500 | $1,353,000 |
| Couple, one partner eligible (combined) | $954,000 | $1,178,500 |
To get a transitional rate of pension, your assets must be less than:
| Your Situation | Homeowner | Non-Homeowner |
| Single | $576,000 | $800,500 |
| Couple (combined) | $896,500 | $1,121,000 |
| Couple, separated due to illness (combined) | $1,011,000 | $1,235,500 |
| Couple, one partner eligible (combined) | $896,500 | $1,121,000 |
How Can You Reduce Your Assessable Assets for the Assets Test?
If you are starting to think about your retirement income, it’s likely you are searching for ways to reduce your assets for the age pension assets test. In turn, this could increase your age pension payment.
While you may not be able to receive the full pension, you may be able to structure your assets in a way where you can receive a part pension.
There are a number of strategies that may be used to reduce asset levels under the age pension assets test. which may result in qualifying for a part pension or increasing the current pension amount received.
Here are six asset reduction strategies that may help you boost your pension:
- Gift money to family members
- Renovate your home
- Repay debt secured against exempt assets
- Set aside money for funeral costs (prepay funeral expenses or use funeral bonds)
- If you have a younger spouse, you can contribute to their superannuation- only if their super is in the accumulation phase
- Purchase an annuity (lifetime income stream)
Reducing your assessable assets within the relevant assets test threshold can provide you with an increased part-age pension.
If you are seeking more information about retirement planning and how to increase your nest egg for retirement, you can seek personal financial advice from one of our partners.
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