Australian Age Pension Guide 2025
The Age Pension is a government income support payment for eligible Australians in retirement. Understanding how it works — and how to maximise your entitlement — is one of the most valuable pieces of financial knowledge for older Australians.
Who Is Eligible?
- Age: You must be 67 or older (Age Pension age as of 2023, applies to those born after 1 January 1957)
- Residency: Must be an Australian resident and have lived in Australia for at least 10 years (with at least 5 continuous years)
- Means test: Must pass both the income test and the assets test
Current Age Pension Rates (2025–26)
| Status | Per Fortnight | Per Year |
|---|---|---|
| Single person | $1,144.40 | $29,754 |
| Couple (each) | $862.60 | $22,428 |
| Couple (combined) | $1,725.20 | $44,855 |
Rates are indexed twice yearly (March and September) to CPI and wage movements. Pensioners also receive various supplements including the Pension Supplement and Energy Supplement.
The Income Test
The pension reduces by 50 cents for every dollar of assessable income above the free area:
- Single: first $204/fortnight is exempt
- Couple: first $360/fortnight (combined) is exempt
The pension cuts out entirely at approximately $2,318/fortnight for singles and $3,544/fortnight combined for couples.
The Assets Test
| Status | Full Pension Below | No Pension Above |
|---|---|---|
| Single homeowner | $314,000 | $695,500 |
| Single non-homeowner | $566,000 | $947,500 |
| Couple homeowners | $470,000 | $1,045,500 |
| Couple non-homeowners | $722,000 | $1,297,500 |
Between the full pension threshold and the cut-off, the pension reduces by $3 per fortnight for every $1,000 in assets above the lower threshold.
What Counts as Assessable Assets?
- Bank accounts, term deposits, managed funds, shares
- Superannuation (if you are over Age Pension age)
- Investment properties (market value, not equity)
- Vehicles, boats, caravans
- Household contents at reasonable estimate
NOT assessable: Your principal home (the house you live in), funeral bonds up to $15,000, certain exempt assets.
Strategies to Maximise Your Pension
- Prepaid funeral: A funeral bond up to $15,000 is assets-test exempt
- Home improvements: Spending money improving your exempt principal home reduces assessable assets
- Gifting rules: You can gift up to $10,000 per year (max $30,000 over 5 years) without affecting your pension
- Downsizer super contribution: Contributing home sale proceeds to super may reduce assessable assets for a period
Important: Pension optimisation strategies are complex and highly individual. Always consult a financial adviser or Centrelink Financial Information Service (FIS) officer before making decisions intended to increase your pension entitlement.
Rates and thresholds are based on 2025-26 figures and are indexed periodically. Always verify current rates at servicesaustralia.gov.au. This guide provides general information only — not financial advice.
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