Age Pension Australia 2025-26: Rates, Eligibility & Income Test

The Age Pension is Australia's primary government retirement income payment, providing a regular fortnightly payment to eligible older Australians. It's the cornerstone of Australia's three-pillar retirement income system, alongside compulsory superannuation and voluntary savings.

Approximately 2.6 million Australians receive some level of Age Pension, with around 60% receiving the full rate and the remainder receiving a part pension reduced by the income or assets test. The Age Pension is funded from general government revenue (not from a separate fund or your personal contributions) and is means-tested to target payments to those most in need. It provides a basic safety net for retirement rather than a comfortable lifestyle replacement — most financial advisers recommend combining the Age Pension with superannuation and other savings for a comfortable retirement.

Here's the thing. To be eligible for the Age Pension, you must have reached Age Pension age, which is 67 for anyone born on or after 1 January 1957. You must be an Australian resident (citizen, permanent visa holder, or certain protected visa holders) and have lived in Australia for at least 10 continuous years, or for a total of 10 years with one period of at least five continuous years.

If you've lived and worked in a country with a social security agreement with Australia, periods of residence in that country may count towards the 10-year requirement. You must be in Australia on the day you claim (unless you're overseas temporarily and meet certain conditions). There's no requirement to have ever worked or paid tax in Australia — the Age Pension is funded from general revenue, not from individual contributions.

However, the income and assets tests mean that wealthier retirees may receive a reduced payment or no payment at all.

The maximum fortnightly Age Pension rates from 20 March 2026 are: single — $1,200.90 per fortnight ($31,223 per year); couple (combined) — $1,810.40 per fortnight ($47,070 per year). These amounts include the Pension Supplement and Energy Supplement.

Additional payments may include Rent Assistance of up to approximately $216 per fortnight (single) or $204 per fortnight (couple combined) if you're a renter. The rates are indexed twice yearly (in March and September) to the higher of CPI or the Pensioner and Beneficiary Living Cost Index, with a benchmark that the single rate must be at least 27.7% of Male Total Average Weekly Earnings. Couples receive approximately 75% of the combined single rate, reflecting shared living costs.

Let's break this down. For a full pension couple who own their home, $47,070 per year is a modest but liveable income, particularly when combined with other benefits such as the Commonwealth Seniors Health Card, transport concessions, and reduced council rates.

The income test reduces your Age Pension once your assessable income exceeds certain thresholds. For singles, the income-free area is approximately $204 per fortnight ($5,304 per year).

Each dollar above this threshold reduces the pension by 50 cents. For couples (combined), the income-free area is approximately $360 per fortnight ($9,360 per year), with each dollar above reducing the combined pension by 50 cents. Assessable income includes employment earnings, super income stream payments, deemed income from financial investments (bank accounts, shares, managed funds, super in accumulation phase), rental income, and overseas pensions.

Deeming rules apply to financial assets: the first $60,400 of financial assets (single) is deemed to earn 0.25%, and anything above is deemed to earn 2.25%, regardless of the actual return. This means putting money in a high-interest savings account doesn't increase your assessed income — only the deemed amount counts.

The assets test also determines your Age Pension rate, and the more restrictive of the income or assets test applies. For a homeowner single, the full pension asset threshold is approximately $301,750 and the cut-off (where pension stops entirely) is approximately $674,000.

Quick reality check. For a homeowner couple, the full pension threshold is approximately $451,500 and the cut-off is approximately $1,012,500. For non-homeowners, the thresholds are higher by approximately $242,000, reflecting the need for housing. Assets include super balances (both accumulation and pension phase), bank accounts, shares, managed funds, investment properties, vehicles, household contents, and any other assets of value.

Your principal home is excluded from the assets test (but any land over two hectares may be assessed). The value of your home can affect your eligibility for the full rate through the income test if you've large financial assets. Understanding the interaction between income and assets tests is important for retirement planning.

Apply for the Age Pension through myGov linked to Centrelink, ideally 13 weeks before you reach Age Pension age. You will need identification, bank account details, income and asset documentation, and your super fund details.

Processing takes approximately four to eight weeks. To maximise your pension, consider strategies such as: prepaying expenses before reaching pension age to reduce assessable assets, structuring your super as an account-based pension (which is assessed under the income test deeming rules rather than the actual income test in some cases), contributing to your home (which is asset-test exempt) through renovations or mortgage repayment, and gifting assets to family (within the allowable limits of $10,000 per year or $30,000 over five years — amounts above this are still counted as assets for five years). Consult a financial adviser who specialises in retirement planning to optimise your pension entitlement alongside your super and other savings.

Use our Retirement Calculator to model how the Age Pension interacts with your super drawdown. Keep that in mind.