Are You Getting the Most Out of the Centrelink Age Pension?

The Age Pension is the primary government income support payment for Australians who have reached the qualifying pension age and meet other requirements.

It is administered by Services Australia through the Centrelink system. The Age Pension is designed to help ensure people in retirement have a minimum level of income, especially if their private savings, superannuation, or other income sources are not sufficient.

To receive the Age Pension, you must satisfy a number of requirements: age, residence, income and assets tests.

Between the two, the test that yields the lower pension is applied.

There is also a Work Bonus — up to $300 per fortnight can be earned (from employment) and not counted under the income test, to encourage work while on pension.

The maximum (full) Age Pension rates are reviewed twice per year (March & September), tied to inflation and wage indexes.

For the period 20 September 2025 to 19 March 2026:

• Single: Single: $1,178.70 per fortnight (approx. $30,646/year)
• Couple (each): $888.50 per fortnight (approx. $23,101/year)
• Combined for couple: $1,777.00 per fortnight (approx. $46,202/year)

If you are only eligible for a part pension, the payment is reduced proportionally, depending on how much you exceed the thresholds in the income or asset tests.

There are also transitional pension rates for those affected by changes to the rules (especially for older cohorts) — but these generally provide lower payments than the standard rate.

If you are outside Australia but still eligible, different “absent from Australia” rates apply.

In addition to the base pension, there are supplements (e.g. pension supplement) and sometimes energy supplements (for eligible pensioners).

Some key points:

• Your home (principal place of residence) is generally exempt under the asset test (i.e. it is not counted).
• Other real property, investments, vehicles, superannuation balances, and financial assets are counted.
• There are different thresholds depending on whether you own your home or not, and whether you are single or part of a couple.
• If your assets are above the “lower thresholds,” you may still qualify for a part pension; above the “upper threshold,” your pension is zero.

For example (as of 20 September 2025):

1. A single person (owns home): full pension if assets ≤ $321,500; part until $714,500; above that no pension.
2. For couples (own home): full pension if combined assets ≤ $481,500; part until $1,074,000.

The exact thresholds shift each review period.

Key aspects:

• Income from employment, investments, business, etc. is assessed.
• There is a “free area” under which you can earn income without affecting your pension — for singles, income under $218 per fortnight allows full pension; for couples, combined income under $380 per fortnight.
• Above that, income is assessed and the pension is reduced.
• A special “Work Bonus” scheme allows you to earn up to $300 per fortnight from work (per person) without being included in the income test.

Again, which test (income or assets) produces the lower pension is the one applied.

• The pension is normally paid fortnightly.
• Find Purpose: Volunteer, travel, or pursue hobbies
• Under certain hardship or housing circumstances (e.g. homelessness risk), you may request weekly payments.
• You can request advance payments (one to three in a six-month period) if you have been receiving the pension for at least three months. These are deducted from future payments.
• If you pay rent, you may qualify for Rent Assistance (if you meet the eligibility and pay a minimum rent).

Your superannuation, account-based pensions, and other retirement income streams are taken into account under both the income and assets tests.

This means that even though super is “your own money,” it can reduce your Age Pension entitlement if it pushes you over the thresholds.

Balancing how and when you draw from super is an important planning decision to maximize pension entitlements and avoid unnecessary reductions.

Other income (e.g. from part-time work, dividends, rent) is assessed under the income test (subject to the “free area” and Work Bonus).

It’s often possible to structure income streams or timing (e.g. delaying drawdowns, using tax strategies) to stay under threshold limits.

If you give away assets (gifting) to reduce your asset base, Centrelink may treat those gifts as “deprivation” and still count them for the purposes of the asset test, depending on timing and amounts.

You should be cautious and informed before transferring significant assets, as this may affect pension eligibility.

In some cases, delaying your claim may be beneficial (depending on expected asset growth, super drawdowns, or taxation strategies).

But note: the Age Pension is not like a defined benefit — delaying beyond eligibility age does not generally increase the base pension amount (unlike some private or overseas pensions).

Navigating the Age Pension system can be overwhelming — from understanding the income and assets tests to structuring your superannuation withdrawals and investments in a way that supports long-term retirement income. This is where a qualified financial advisor can make a real difference.

Advisors can help you organise your investments and retirement savings so that you remain eligible for the maximum Age Pension possible. For instance, they can recommend whether to keep funds in super, move them into an account-based pension, or consider other investment structures that may be more Centrelink-friendly.

Large lump-sum withdrawals from super or other investments can push you over the income or assets threshold, reducing your pension entitlement. Advisors can guide you on timing withdrawals to minimise impacts, ensuring you don’t miss out on pension payments unnecessarily.

Many retirees want to gift money to children or grandchildren. However, Centrelink has strict rules on gifting as discussed above. A financial advisor can explain these limits and help plan gifts without breaching the “deprivation rules” that could reduce your pension.

A well-designed retirement strategy usually involves balancing superannuation drawdowns with Age Pension entitlements. An advisor can create a tailored plan that combines both sources for stability, tax efficiency, and maximised benefits.

Perhaps most importantly, a financial advisor ensures your overall financial plan is sustainable — balancing short-term cash flow needs with long-term security. They can stress-test your strategy against inflation, healthcare costs, and unexpected expenses to help you feel more confident about retirement.

Here are a few case studies of how the means tests and pension payments can play out: