Age Pension eligibility: step-by-step guide
This simple guide will help you determine whether you could receive a government Age Pension.
By Jodie Cook - 3 min read
A little about Jodie
As a Member Solutions Consultant at Russell Investments, Jodie Cook understands all the ins and outs of super and retirement legislation, and loves to answer questions and help members.
If you’ve finished work or are nearing retirement, you may be wondering about your Age Pension eligibility and whether you could receive a full or part Age Pension to supplement your retirement income.
We’ve put together a simple step-by-step guide to help you determine your eligibility.
- Step 1: Are you old enough?
- Step 2: Do you meet the residence rules?
- Step 3: The income test: How much are you entitled to?
- Step 4: The assets test: How much are you entitled to?
Step 1: Are you old enough?
If you’re 67 or over now, you are already old enough to qualify for an Age Pension. If you are 66 or under, the age at which you become eligible will depend on your birthday, as below.
|Birth date||Pension age|
|July 1, 1955 – December 31, 1956 (inclusive)||66 years, 6 months|
|January 1, 1957 (or after)||67 years|
Source: Department of Social Services
Step 2: Do you meet the residence rules?
In general, you will meet the residence rules if you can answer ‘yes’ to these questions on the day you claim the Age Pension:
- Are you an Australian resident?
- Are you in Australia?
- Have you been an Australian resident for at least 10 years in total?
- Are at least five of these years continuous with no break?
If you answer no to some of these questions, you may still meet the residence rules.
Step 3: The income test: How much are you entitled to?
The amount of income you earn from sources such as super, investments and work is considered when determining whether you receive an Age Pension, and how much you get.
The income test includes your income plus your partner’s income (where relevant) from all sources. Some financial assets such as account-based pensions, savings accounts and term deposits are deemed to earn an income at a set rate, regardless of the income they actually earn.
In general, you can earn up to $190 a fortnight as a single person and up to $336 combined as a couple and receive a full pension. Above that amount, your pension payments will be reduced by 50 cents for every extra dollar earned for singles, and 25 cents per person for couples.
The cut offs for most people receiving pension payments are listed below.
| Your situation
|| Income cut off point
|A couple living together||$3,431.20 combined|
|A couple living apart due to ill health||$4,442.00 combined|
Source: Services Australia. Note: These figures are correct as of February 14, 2023. Different limits may apply in certain circumstances.
Special rules apply if you’re working while you’re receiving an Age Pension.
It’s also worth mentioning that when you’re assessed for the Age Pension using the income test and the assets test (more on that below), the test that produces the lower result will be used to decide how much (if any) pension you will receive.
Step 4: The assets test: How much are you entitled to?
The total value of the assets you own helps to determine your pension entitlement. If you have a partner, your assets are combined for the test.
Included in the assets test are:
- financial assets such as bank accounts and term deposits, shares and account-based pensions
- non-financial assets such as jewellery, home contents, cars and collectibles
- assets you own in Australia and overseas
- debts owed to you.
Excluded from the assets test are:
- the value of your home
- your partner’s super if they are under the pension age.
How much Age Pension you can be paid depends on whether you own a home (but not its value) and whether you are single or have a partner.
||Limit of asset value to receive a full pension||Limit of asset value to receive a part pension
|A couple, combined||$419,000
|A couple, separated due to illness, combined||$419,000
|A couple, one partner eligible, combined||$419,000
Source: Services Australia. Note: These figures are correct as of February 14, 2023. The limits are reviewed in January, March, July and September by the Department of Social Services.
As mentioned earlier, when you’re assessed for the Age Pension using the income test and the assets test, the test that produces the lower result will be used to decide how much (if any) pension you will receive.
Jane and Tim: How they qualified for a part pensionJane is 68 and her husband Tim is 69. Both are fully retired with no employment income. They are both Australian citizens and have lived in Australia continuously for more than 10 years. They own a home. Their home contents, car and jewellery have a combined value of $112,000.
In addition, Jane has $250,000 in super and Tim has $420,000 in super. They also have $150,000 cash in a term deposit.
Both Jane and Tim pass the age and the residence tests.
Combined, their superannuation is deemed to earn approximately $16,578 in income for the year, which equates to $638 a fortnight.
Given their combined income is below the income cut off point ($3,431.20 per fortnight), Jane and Tim would be entitled to a part pension under the income test.
The total value of their assets for the assets test is $932,000. The value of their assets exceeds the lower cut off for a full pension ($419,000), but they will qualify for a small part pension under the assets test.
The Age Pension amount Jane and Tim actually receive is the lower of the age pension entitlement calculated under the income and asset test.
Receiving even a small part pension means Jane and Tim will be entitled to pensioner concessions and savings.
This example is provided for illustrative purposes only. To get a better understanding of your own situation, refer to the 'Need assistance' section below.
Each person’s situation is different. So if you’re thinking of the best way to manage your retirement income, including any Age Pension entitlements… it really does depend on your circumstances. You can:
- contact us for more detailed information and assistance
- explore our advice options if you want more personalised support
- refer to the retirement masterclass ‘Understanding your entitlements’
- contact Services Australia.
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