The Centrelink Age Pension is an Australian Government payment that provides ongoing financial assistance to eligible older Australians during retirement. In addition to regular income payments, eligible recipients may also qualify for a range of government concessions and benefits. The amount of Age Pension you receive depends on your individual circumstances.
In order to be eligible to receive Centrelink Age pension, you must meet all 3 conditions:
1. Age Requirement
You must be at least 67 years old, to be eligible for age pension. Centrelink has now discontinued the perservation age as a guideline.
2. Income Test
Your total assessable income may not exceed the relevant threshold based on the table below. There are two types of income threshold that will determine whether you are eligible for the full age pension or part age pension:
The income test assesses both your income and your partner’s income from all sources, such as your salary, savings, shares, and superannuation
Services Australia uses “deeming” to calculate how much income your financial asset produces. This is explained more here.
3. Assets Test
How much you receive in Age Pension will depend on the value of your assets, homeownership, and if you are in a relationship
These assets include property or possessions that you own or have any interest. They can include assets held outside of Australia and debt owed to you.
The home you live in is not counted as an assessable asset, but it will affect the asset limit applicable to you. Your home will also be exempt as an asset after you vacate if:
- You enter a residential aged care your home will not be considered an asset for up to 2 years
- If your partner continues to live in the home after you moved to residential aged care, the home continues to be exempt. If your partner vacates to enter residential aged care or if they pass away, the home will be exempt for up to 2 years
If your home was sold during the 2-year exemption period after entering to aged care, the home exemption will cease and you will be considered a non-homeowner. This applies even if a new home is purchased with the sale proceeds from the previous home. Your applicable asset test limit will change to a non-homeowner.
The asset limit to receive full pension are below:
If your assets exceed the full pension limit but remain below the maximum allowable threshold, you may still qualify for a part Age Pension
If you satisfy both the income and assets tests, Centrelink will determine your Age Pension entitlement based on the test that results in the lower payment, under the Income and the Assets Test.
The Centrelink treatment of account-based pensions depends on when the pension commenced:
- Account-based pensions commenced on or after 1 January 2015 are generally assessed as financial assets and are subject to both the income and assets tests.
- Account-based pensions commenced before 1 January 2015 may continue to receive grandfathered treatment if the recipient was already receiving eligible Centrelink payments on 1 January 2015. In these circumstances, the pension are partially exempt for the Income Test.
For further information about the Age Pension and current eligibility requirements, refer to the official Centrelink guidance.
If you have a Self-Managed Super Fund (SMSF), you may also be able to start drawing retirement benefits once you have reached your preservation age and satisfied a condition of release. For more information on commencing an SMSF pension, see our guide.