Age Pension Eligibility Guide 2025: Centrelink Rates & Assets Tests

Age Pension Rates (September 2025)

Single Person

$1,144.40

per fortnight ($29,754/year)

Couple (combined)

$1,725.20

per fortnight ($44,855/year)

Includes Pension Supplement and Energy Supplement. Rates indexed twice yearly (March & September).

Age Pension Eligibility Requirements

To receive the Age Pension, you must meet all of the following requirements:

1. Age Requirement

You must be at least 67 years old. This applies to anyone born on or after 1 January 1957. If you were born earlier, you may have qualified at a younger age.

Birth Date	Qualifying Age
Before 1 July 1952	65
1 July 1952 - 31 Dec 1953	65.5
1 Jan 1954 - 30 June 1955	66
1 July 1955 - 31 Dec 1956	66.5
1 January 1957 onwards	67

2. Residency Requirements

Australian citizen, permanent resident, or Protected Special Category Visa holder
10 years residence in Australia, with at least 5 years continuous residence
OR exempt due to being a refugee, former refugee, or covered by an International Social Security Agreement

3. Income and Assets Tests

Your pension amount is determined by both the income test and the assets test. Centrelink applies whichever test results in the lower payment.

The Income Test Explained

The income test assesses your income from all sources, including:

Employment income
Investment returns
Superannuation income streams
Deemed income from financial assets
Rental income
Foreign income

Income Test Free Areas (2025)

Status	Fortnightly Free Area	Annual Equivalent
Single	$212	$5,512
Couple (combined)	$372	$9,672

For income above the free area, your pension reduces by 50 cents for every dollar of income (25 cents each for couples). This is called the "taper rate."

Deeming Rules

Financial assets (bank accounts, super pension, shares, managed funds) are subject to "deeming." Centrelink assumes your assets earn a certain rate of return, regardless of actual returns:

Deeming Rates (Frozen at 2.25%)

Lower threshold: 0.25% deemed on first $62,600 (single) / $103,800 (couple)

Upper rate: 2.25% deemed on amounts above these thresholds

The deeming rate freeze has been extended, allowing retirees to benefit from higher actual returns without pension reductions.

The Assets Test Explained

The assets test looks at the total value of your assets, excluding some exempt items.

Assets Test Thresholds (2025)

Status	Full Pension (to)	Cut-Off (above = $0)
Homeowners
Single	$314,000	$695,500
Couple (combined)	$470,000	$1,045,500
Non-Homeowners
Single	$566,000	$947,500
Couple (combined)	$722,000	$1,297,500

For assets above the full pension threshold, the pension reduces by $3 per fortnight for every $1,000 of assets above the limit (taper rate of $78/year per $1,000).

What Counts as Assets?

Counted Assets

• Bank accounts & term deposits
• Superannuation (if age pension age)
• Shares & managed funds
• Investment properties
• Cars (at market value)
• Caravans, boats, trailers
• Personal valuables over $10,000
• Funeral bonds over $15,000

Exempt Assets

• Your principal home
• Household contents (most)
• One car per person
• Medical equipment
• Funeral bonds up to $15,000
• Accommodation bonds (aged care)
• Life insurance policies
• Super (if under pension age)

Work Bonus: Keep Working, Keep More Pension

The Work Bonus allows pensioners to earn extra employment income without affecting their pension.

Work Bonus Key Points

$ $300 per fortnight of employment income is exempt from income test
$ Unused amounts accumulate in a Work Bonus Bank (up to $11,800)
$ Only applies to employment and self-employment income (not investments)
$ Work Bonus applies before the income test free area

Work Bonus Example

Mary receives the Age Pension and works part-time, earning $500 per fortnight:

Work Bonus reduces assessable income by $300
Remaining $200 is within the $212 free area
Result: Mary keeps her full pension while earning $500/fortnight extra

Strategies to Maximize Your Pension

1. Understand Gifting Rules

Gifting Limits

Gifts over $10,000 per year (or $30,000 over 5 years) are still counted as assets for 5 years. This prevents people gifting assets to qualify for pension.

Plan any significant gifts well before retirement to avoid the 5-year waiting period.

2. Consider Your Superannuation Strategy

Super is counted once you reach Age Pension age, whether you've accessed it or not
Account-based pensions: May be assessed differently under income test
Spend super first? If wealthy, it may make sense to drawdown super before pension age to lower assets

3. Home Ownership

Your principal home is exempt from the assets test with no cap. This makes home ownership highly advantageous for pension purposes:

Paying off your mortgage increases pension eligibility
Home renovations reduce assessable assets
Downsizing can release funds but may affect pension (careful planning needed)

4. Granny Flat Arrangements

If you transfer assets to a family member in exchange for a right to live in their home, special rules apply. Done correctly, the transferred amount may not be counted. Get professional advice.

Pension Supplements and Extras

The base Age Pension includes several supplements automatically:

Supplement	Single	Couple (each)
Pension Supplement	$83.20/fn	$62.70/fn
Energy Supplement	$14.10/fn	$10.60/fn

Additional Benefits for Pensioners

Pensioner Concession Card: Discounts on medicines, transport, utilities
Commonwealth Seniors Health Card: For self-funded retirees who don't qualify for pension
Rent Assistance: Up to $211.60/fortnight (single) if renting
State concessions: Council rates, car rego, public transport discounts

How to Apply for Age Pension

Application Steps

1 Apply up to 13 weeks before you turn 67 (or your qualifying age)
2 Create a myGov account and link it to Centrelink
3 Gather documents: Bank statements, super balances, property valuations
4 Complete online claim (or visit a Centrelink office)
5 Processing takes 6-12 weeks typically

Use Our Age Pension Calculator

Understanding your pension eligibility can be complex. Use our Age Pension Calculator to estimate:

Whether you qualify based on income and assets tests
How much pension you might receive
The impact of working or investing on your pension
How deeming affects your assessable income

Final Thoughts

The Age Pension is a valuable safety net for Australian retirees, providing up to $30,000/year for singles and $45,000 for couples. With careful planning around assets, income, and the tests, many Australians can maximize their entitlement while maintaining financial security.

If your situation is complex—especially with investment properties, self-managed super, or business interests—consider consulting a financial adviser who specializes in Centrelink optimization.

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