Fact-checked against Services Australia — Age Pension on 2026-04-25.
The Age Pension is the federal income-support payment for older Australians, and it’s a more substantial part of the Australian retirement system than people without yet-eligible parents tend to realise. The thing is, almost two-thirds of Australians over Age Pension age receive at least a part-pension, and most of the others fall just outside the means-test thresholds. So Age Pension isn’t a backstop for the few — it’s a structural part of how most Australians actually fund retirement. Anyway.
The three tests every Age Pension claim runs through
Bear with me. Every Age Pension claim is assessed against three independent tests, all of which must be passed:
- Age and residency — qualifying age and residency duration requirements
- Income test — how much income (including deemed income from financial assets) the person and partner have
- Assets test — how much in countable assets the person and partner hold
Services Australia applies whichever of the income and assets tests produces the lower payment. So passing one and failing the other still produces a reduced or zero pension; both have to be navigated. The tests are described on the Services Australia income and assets tests page.
The eligibility framework — who is eligible for Centrelink payments more broadly — is covered in our Centrelink eligibility article. This article goes deeper specifically on Age Pension mechanics.
The qualifying age and residency requirements
Here’s the catch. The current qualifying age for the Age Pension is 67 for new claimants. The age rose progressively from 65 over a published schedule, and people born on or after 1 January 1957 reach Age Pension age at 67. The current qualifying-age table sits on the “when you can get it” page.
The residency requirements add a second layer:
- Generally need to be an Australian resident at the time of claim
- Have been an Australian resident for a defined number of years (commonly 10 years total, with at least 5 years continuous)
- Some exceptions apply for people from countries with international social security agreements
People who have moved overseas later in life or migrated to Australia closer to retirement age sometimes encounter the residency requirement as the binding constraint, which is why understanding it before retirement is genuinely useful.
The income test in practice
The income test counts:
- Wages and salary, including casual work after retirement
- Business and self-employment income
- Deemed income from financial assets — Centrelink applies a deeming rate to bank accounts, term deposits, shares, managed funds, and (for new pensioners after 2015) account-based pensions
- Foreign pensions and overseas income, in many cases
- Partner’s income, for partnered claimants
The income test has a free area — income up to a defined threshold doesn’t reduce the pension. Above the free area, the pension reduces by a published taper rate for each dollar of additional income. The full pension cuts out at the income level where the taper has reduced the pension to zero.
The deeming rule is one of the more counterintuitive parts of the system. Real interest rates from bank accounts can be below the deeming rate, which means the income test counts more income than the assets actually generate. For people with significant savings in low-interest accounts, this matters financially.
The assets test and the family home
The assets test counts most assets owned by the person and partner, with several important exclusions. The single most important exclusion is the family home — the home the person lives in is exempt from the assets test, regardless of value.
What counts:
- Investments — shares, bonds, managed funds, term deposits, savings accounts
- Real estate other than the family home
- Vehicles, boats, caravans (above threshold values)
- Business assets owned
- Some superannuation balances (varying rules by age and account type)
- Personal effects above defined threshold values
What’s exempt:
- The family home (the principal place of residence)
- Some specific funeral-bond products up to defined limits
- Certain compensation-protected categories
Homeowner and non-homeowner thresholds differ — non-homeowners get a higher threshold to reflect that the value held outside their housing is what’s countable. Both thresholds shift periodically with indexation, and the current values are on the income-and-assets-tests page.
Payment rates, supplements, and concessions
The Age Pension has different rates for singles and partnered recipients, with supplements that bring the total payment somewhat above the headline rate. The current published rates sit on the Age Pension rates page, indexed twice a year (March and September).
Supplements that typically attach to the Age Pension:
- Pension Supplement — added to the basic rate
- Energy Supplement — a further small amount
- Rent Assistance — for eligible renters paying above a threshold
Plus, Age Pension recipients usually qualify for the Pensioner Concession Card, which provides discounts on PBS prescriptions, transport in many states, utility rebates, and some council rates. The card is often as financially valuable as a chunk of the pension itself, depending on usage.
How the Age Pension interacts with super
The Age Pension and superannuation are designed to work together. Super is the working-life-funded portion; the Age Pension is the social-floor portion. The interaction is direct: more super-derived income reduces the Age Pension under the means tests, and the system is calibrated so that people with mid-range super balances often draw a part-pension on top of super. That’s the gist.
How super affects the Age Pension depends on the recipient’s age and how the super is being accessed:
- Below Age Pension age, super in accumulation mode is generally exempt from Centrelink means tests
- At or above Age Pension age, super balances and account-based pensions are typically counted
- Lump sum withdrawals from super that go into other assets get counted in the assets test from that point
The interaction with superannuation is also covered from the super side in our superannuation eligibility article, and the broader retirement framework is in how retirement systems work across countries (covering Australia in detail).
Frequently asked questions
What is the Age Pension qualifying age in Australia?
The Age Pension qualifying age is 67 for new claimants. It rose progressively from 65 over a published schedule. People born on or after 1 January 1957 reach Age Pension age at 67. Reaching the qualifying age is necessary but not sufficient — residency and means tests also apply.
Is the Age Pension means-tested?
Yes. The Age Pension uses an income test and an assets test, with Services Australia applying whichever produces the lower payment. Many people receive a part-pension rather than the full payment because their other income or assets reduce eligibility above the full-payment threshold but not below the cut-off.
Does owning my home affect Age Pension eligibility?
Owning your home doesn’t disqualify you, but it does change the assets-test thresholds. Homeowners and non-homeowners have different threshold levels because the family home itself is exempt from the assets test. Non-homeowners get a higher assets threshold to reflect the value held outside an exempt home.
The pre-retirement decision that affects Age Pension outcomes most
The single decision that affects Age Pension outcomes most isn’t a financial decision at retirement — it’s the structure of assets and income across the years approaching retirement. The means-test thresholds work in dollar amounts, and where assets sit (in super versus outside, in property versus financial assets, in the family home versus elsewhere) changes how those dollar amounts get counted.
Understanding which assets are countable and which are exempt — well before reaching qualifying age — produces measurably different Age Pension outcomes for people with similar total wealth. This isn’t an opportunity to game the system; it’s the consequence of the system being designed with specific exemptions and rules. For anyone within five years of qualifying age with significant assets, financial advice that specifically covers Age Pension means-test interactions is generally where the decisions get made.
The Services Australia website’s main Age Pension page remains the authoritative starting point for the rules, with the rates and thresholds updated as they change.