Q&A: Government Age Pension

Funding your lifestyle after retirement can come from different sources. Find out how the government Age Pension fits into it.

By Joel Atputharaj   - 3 min read

A little about Joel

Joel Atputharaj is a senior manager at Russell Investments. A Fellow of the Institute of Actuaries, he helps clients navigate complexity and has worn many hats across the superannuation and consulting businesses, including actuarial consulting, account management, insurance and fund administration.

In the lead up to retirement, you’ll want to consider all your financial options. This includes any sources of income available to replace your pay cheques from employment, as well as discounts and benefits that may help minimise living costs. Our superannuation expert Joel Atputharaj explains how the government Age Pension might fit into your planning.

What are the benefits of applying for a government Age Pension?

The best thing about the government Age Pension is it’s an income source for life for people who are entitled to receive it. The full amount of the government Age Pension from March 2024 is just over $29,000 a year for a single person and around $43,750 for a couple—although the amount you’re entitled to depends on factors such as your assets and other income.

It’s obviously great to have extra money coming in, but having a guaranteed income from the government also gives you the option of leaving more of superannuation in your fund earning investment returns for longer. Also, having a significant portion of your retirement income ‘guaranteed’, can provide the comfort you need to invest your superannuation in more growth assets (that is, taking on more investment risk), which is expected to deliver greater investment returns in the long run. Of course, we’re all different and what is right for one may not be right for another.

Are there other reasons to apply?

If you’re receiving a government Age Pension, you’re also eligible for other discounts and allowances. For example, you may be able to get a Pensioner Concession Card or a Commonwealth Seniors Health Card, which can help with the cost of health care and medicines, and give you discounts on utility bills, property and water rates, transport fares and motor vehicle registration. Even if you only get a small payment from the government Age Pension, these benefits can bring valuable savings.

When can you apply for a government Age Pension?

In general, you become eligible for a government Age Pension when you turn 67, as long as you’ve been living in Australia as an Australian resident for at least 10 years. You may eligible at an earlier age if you were born before 1 January 1957. If you have a partner, you can apply when either person meets the eligibility criteria.

But just because you’re eligible doesn’t mean you’ll be entitled to receive an Age Pension at that time.

How are pension entitlements assessed?

Your entitlement to an Age Pension depends on how much income you receive from other sources (assessed by the income test), and the value of your assets not including the home you live in (assessed by the assets test). Other factors come into play, such as whether you’re single or have a partner, and if you’re a member of a couple, whether you live together or are living separately due to illness. People who are renting may also receive a higher level of support than those who own their home.

What should people do if they’re eligible but not entitled?

Some people might not be entitled to receive payments on day-one of their retirement (due to the income and assets tests), but may become entitled during their retirement if their assets reduce. It’s a good idea to understand the thresholds and tests and check back with Centrelink if your circumstances have changed and you think you might now be entitled. You can’t get back-pay for a government Age Pension if you are entitled but haven’t applied, so if you don’t keep on top of it, you might miss out on the income and discounts I mentioned.

What are the barriers you see to people applying for a government Age Pension?

Often, people simply forget to apply or don’t know they might be eligible. If you’ve never interacted with Centrelink in this capacity before, unless someone tells you that you might be eligible, you just might not know.

Where can people get more information?

The Russell Investments website has general education on the government Age Pension. You can also contact Services Australia via their website.

Our RetireAssist program allows members (who are 12 months or less from retiring) to get assistance with applying for the Age Pension via Centrelink as an additional service. For more information, you can request a RetireAssist call back here.

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