The Age Pension — what you get, how it's tested, what you actually take home

The Age Pension is the foundation of most Australians' retirement income. Currently up to $1,200.90/fortnight ($31,331/year) for a single pensioner and $905.20/fortnight each ($47,225/year combined) for partnered pensioners. Two means tests determine how much you actually get, indexed twice a year against CPI / PBLCI / MTAWE. Verified against Services Australia — Age Pension, income test, assets test and deeming rules as at 24 June 2026.

Rates change. Payment amounts and the Pension Supplement / Energy Supplement move every 20 March and 20 September. Lower thresholds (income free area + full-pension assets thresholds) move 1 July annually. Always verify with Services Australia before relying on a specific figure for a real decision.

Eligibility — the gate questions

You qualify for the Age Pension if all of these apply:

• Age: You're at least your Age Pension age. Since 1 July 2023 that's 67 for everyone born on or after 1 January 1957.
• Residency: Australian resident for at least 10 years total, with at least 5 of those years in one continuous period at the time you claim.
• Income test passes: Your assessable income is below the cut-off (see below).
• Assets test passes: Your assessable assets are below the cut-off.

You're assessed under BOTH the income and assets tests — your payment is based on whichever test gives you the LOWER amount.

The rates — fortnightly, from 20 March 2026

Source: Services Australia — how much Age Pension you can get.

Income test — what counts and what doesn't

The income test asks: "What's flowing into your hand each fortnight?" It includes:

• Deemed income on your financial assets (bank, term deposits, shares, ETFs, super once you're Age Pension age, account-based pensions started after 1 January 2015).
• Employment income (wages, salary, self-employment), minus the Work Bonus exemption.
• Rental income (net of allowable deductions).
• Foreign pensions including NZ Super.
• Defined-benefit super income streams (taxable portion, with 10% deductible amount).
• Trust distributions and other private income.

It EXCLUDES the principal home, paid-up funeral bonds (to a cap), cemetery plots, and the value of your superannuation accumulation phase BEFORE you reach Age Pension age.

Income test thresholds (from 1 July 2026 lower-threshold indexation; rates set 20 March 2026):

Deeming — the invisible income

Centrelink doesn't ask what your bank earned. It deems a return on your financial assets:

• Lower rate (1.25%/yr) applies to financial assets up to $66,800 (single) or $110,600 (couple combined) — thresholds stepped up 1 July 2026.
• Upper rate (3.25%/yr) applies to financial assets above those thresholds.

That deemed income is added to your assessable income for the income test. The deeming-rate freeze ended 30 June 2026, but the government held rates at 1.25% / 3.25% for 1 July 2026 by ministerial decision — thresholds indexed as normal.

Assets test — what you own

The assets test asks: "What could you sell?" It includes investment property, motor vehicles, caravans, boats, household contents at depreciated value, business assets — and EXCLUDES your principal home (if you're a homeowner), pre-paid funeral bonds, and cemetery plots.

Full-pension assets thresholds (from 20 March 2026):

Cut-off thresholds (no pension above):

Above the full-pension threshold, your fortnightly payment reduces by $3 per $1,000 in assets, until the cut-off.

The Work Bonus — keep working without losing pension

If you're earning employment income while on the pension:

• The first $300/fortnight of employment income is exempt from the income test.
• New pensioners start with a $4,000 Work Bonus bank balance that lets unused exemption roll forward.
• The bank can build up to a maximum of $11,800.
• Centrelink applies the Work Bonus automatically — you don't have to do anything special.

This means a pensioner can earn $300/fortnight of wages with no pension reduction — and if they didn't work for the first few months of the year, they can earn substantially more later without immediately hitting the taper.

See our Work Bonus guide for the full mechanics, including how the bank balance accumulates and worked examples.

Worked example — Margaret

Margaret is 70, single, homeowner. She has $230,000 in financial assets and $8,000 of household contents. Her only income is whatever those assets earn.

Deemed income (FY 2026-27 thresholds):

• $66,800 × 1.25% = $835.00/year
• $163,200 × 3.25% = $5,304.00/year
• Total deemed income: ~$6,139/year = $236.12/fortnight

Income test:

• $236.12/fn is above the $226/fn free area by $10.12.
• 50¢ taper: reduction = $5.06/fortnight
• Income-test pension = $1,200.90 − $5.06 = $1,195.84/fortnight (single max minus taper).

Assets test:

• Assessable assets = $230,000 + $8,000 = $238,000
• This is below the $333,000 single-homeowner full-pension threshold → full pension under the assets test.

Margaret's actual pension = LOWER of the two = $1,195.84/fortnight (~$31,199/yr), because the income test taper kicked in slightly.

When you're just over the cut-off

If your income or assets are above the Age Pension cut-off, you don't get a payment — but you may still qualify for the Commonwealth Seniors Health Card (CSHC). The CSHC gives you the same concession-card benefits as a pensioner (cheaper PBS scripts, lower Medicare Safety Net threshold, state energy + transport concessions) but is income-tested at a much higher cut-off ($101,105/yr single; $161,768/yr couple combined).

See our Commonwealth Seniors Health Card guide for the eligibility test and what it actually unlocks.

Where to claim + next steps

• Apply through my.gov.au linked to your Centrelink account. Allow at least 13 weeks before your retirement date for the application to be processed.
• Use the Services Australia Payment and Service Finder for a personalised eligibility check.
• Talk to a Financial Information Service officer — free service from Services Australia. They can model your specific income/assets position before you claim.
• Use the NestWise Age Pension calculator to model your own situation — both tests applied, deeming + Work Bonus included, working shown line-by-line. Or cross-check against the MoneySmart Retirement Planner.