Time to read : 5 Minutes
It’s surprising how often Aussies make mistakes when it comes to getting the pension. From diddling themselves on the means test to overlooking their eligibility to claim it in the first place, it all has the same result: unclaimed money.
Many also wrongly believe it’s all or nothing – that you are either entitled to the full pension or nothing.
In this article, I’ll help you understand:
how eligibility for the age pension is calculated
what you may be able to receive
why claiming any pension at all could be financially worthwhile.
So let’s dive straight in.
Who is eligible for an age pension?
The Age Pension is currently available to people aged 67 and over. You must be living in Australia and be either:
an Australian citizen
a permanent visa holder
a New Zealand citizen with a protected Special Category visa (SCV).
Anyone applying for the pension will also be assessed under an income test, which examines your own and your partner’s income. You will also undergo an assets test, which looks at the total value of assets you own.
Even if you receive other income or own assessable assets, you may still be eligible to receive some of the pension, though not the full amount. This is called a part pension.
How much can you receive in a part pension vs the full pension?
As of March 2025, the full pension (including the maximum Pension Supplement and Energy Supplement) is $1,149 per fortnight for singles and $1,732.20 for couples.
A part pension will be less, but how much you receive will depend on your other income and assets.
Note: you may be eligible for a part pension if the value of your assets is greater than the full pension asset limit. Your part pension amount is based on a sliding scale according to the value of your assets.
Under the income test, your pension reduces by:
50 cents for every dollar you earn over $212 per fortnight (singles)
25 cents for every dollar you earn over $372 (couples).
Cut-off levels vary depending on whether you are single, a couple living together, living apart for health reasons (eg one of you is in supported care accommodation), or are covered by “transitional” rates.
The assets test limits are higher for renters than homeowners. You may receive the full pension with assets worth up to:
$314,000 (single homeowners)
$566,000 (non-homeowner singles)
$470,000 (homeowner couples)
$722,000 (non-homeowner couples).
You can still claim a part pension with assets worth up to:
$697,000 (single homeowners)
$949,000 (non-homeowner singles)
$1,047,500 (homeowner couples)
$1,299,500 (non-homeowners couples)
$1,236,000 (homeowner couples separated because of illness)
$1,488,000 (non-homeowner couples separated because of illness).
What are the benefits of claiming a part pension?
Claiming a part pension has two main benefits:
Offsetting your income: you can draw down less from your superannuation.
Gaining access to other benefits: part pensions still give you access to pensioner healthcare cards and discounts. You may also be eligible for the Pension and Energy supplements and other concessions.
While everyone’s situation is different, a part pension could potentially put thousands of dollars into your pocket each year and allow your super to go the distance.
What factors can change the pension amount you receive?
Whether you qualify for a pension and how much you receive can change when your circumstances change. Here are some factors that can do that:
If you need to care for your partner (or vice versa) – especially if one of you is still working.
If your partner dies, your pension will reduce to the singles rate. However, any Rent Assistance or other concessions may go up, since they are generally higher for singles.
Selling assets – reducing investment income, creating assessable cash savings, reducing assessable assets if the proceeds are used for home improvements/renovations.
Unlocking home equity – money previously exempt from the assets test may become assessable.
If you retire part-way through the year. You may not qualify for the pension that year because of your employment income.
Be aware: never assume “nobody needs to know” and keep any changed circumstances to yourself. Not disclosing changes (such as the ones listed above) to maintain your pension can attract hefty penalties.
How to maximise the value of your pension
While it’s easy to assume that you don’t qualify for a pension, many Aussies on the other hand believe that claiming it should be done at any cost. Here are three steps to get the best out of your situation.
Step 1: Check your eligibility
To get started, check the eligibility rules on Services Australia. These include residence rules, income test and asset test.
💡 Be realistic with valuations of your personal property and assets under the means test – people often over estimate their true worth because of sentimentality or emotional attachment. Doing this can cut the size of your pension.
Step 2: Explore pension boosting opportunities
Are there any changes you can make to boost how much pension you can claim? These could include:
selling assets
early inheritances for your adult kids or grandkids
changing ownership structures for example transferring ownership between you and your partner, or into a family trust.
Important: these are all big decisions, so you should always speak to a financial adviser before deciding what to do.
Step 3: Talk to a financial adviser
Some decisions can leave you better off financially. This step can be a little tricky to navigate but a good financial adviser can help you with this.
Here’s an example of how I helped one of my clients. They were a married couple who initially weren’t eligible for a pension because of their superannuation and an investment property they owned.
But by selling the property and adjusting where their money was held allowed them to receive a part pension while reducing their Capital Gains Tax (CGT) on the sale.
Be aware: selling assets or reducing cash savings to qualify for the pension may work for some people, but for others, the pension could be worth less than the income from those assets or savings. Talk to a professional to discover what’s best for you.
Important: remember that if your circumstances change in the future (such as your health deteriorates), you may need to rely on those savings.
Bottom line
Be sure to look at your finances holistically with a long-term view to determine what works best for you – not just for now but in the future too. You may need a good financial adviser to help you.
Claiming the pension, even a small part pension, can go a long way to safeguarding your retirement income and lifestyle. But only if the numbers add up in your favour.
Go deeper:
Are there tax implications for transferring assets from one generation to another?
5 important foundations to help you build financial security
Disclaimer
The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754.
