👴 Your Details
⚖️ Assets Test vs Income Test
Services Australia calculates both and pays the lower result. The binding test (lower pension) is highlighted.
📊 Assets Strategy Table
How your pension changes at different asset levels. Your current position is highlighted.
| Total Assets | Assets Test Pension (fortnight) | Annual Pension |
|---|
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The Australian Age Pension: How It Works and How to Maximise Your Entitlement
The Australian Age Pension is the government's retirement income safety net — providing up to $1,178.70 per fortnight ($30,646/year) for singles and $1,778.60 per fortnight ($46,244/year) for couples (March 2026 rates). Understanding how the means tests work is essential for retirement planning — and for legally maximising your entitlement.
The Two Tests — Assets Test and Income Test
Services Australia applies two tests every fortnight and pays whichever gives you the lower pension:
Assets Test
Assesses the value of your assets (excluding your home). Assets above the full-pension threshold reduce your pension by $3 per fortnight for every $1,000 over the limit.
| Situation | Full Pension (up to) | No Pension (above) |
|---|---|---|
| Single Homeowner | $321,500 | $722,000 |
| Single Non-Homeowner | $579,500 | $980,000 |
| Couple Homeowner (combined) | $481,500 | $1,085,000 |
| Couple Non-Homeowner (combined) | $739,500 | $1,343,000 |
Income Test
Assesses your fortnightly income. Income above the free area reduces your pension by 50 cents for every dollar over the limit. For couples, the free area is $380/fortnight combined.
Key rule: Most financial assets (super, shares, bank accounts) are not assessed on actual income withdrawn — instead, Services Australia applies deeming rates to calculate a "deemed income" regardless of what you actually receive or draw down.
Deeming Rates Explained — The Most Misunderstood Rule
Deeming is the way Services Australia estimates income from your financial assets. It applies a fixed rate to your financial assets regardless of what they actually earn:
- First $62,600 (singles) or $103,800 (couples): deemed at 0.25% p.a.
- Amount above threshold: deemed at 2.25% p.a.
Important: Deeming applies to your BALANCE — not what you withdraw. If you have $500,000 in super and withdraw $60,000/year, Centrelink does not count the $60,000 as income. It calculates deemed income on the $500,000 balance. This means drawing down your super does NOT increase your assessable income for pension purposes — only the reducing balance reduces deemed income.
Strategies to Maximise Your Age Pension
1. Spend on exempt assets before pension age
Your principal home is exempt from both the assets and income tests. Renovating, paying off the mortgage, or buying a better home using financial assets reduces your assessable assets without reducing your net worth — potentially qualifying you for a higher pension.
2. Prepay funeral expenses
Prepaid funeral plans (typically $8,000–$15,000) are exempt assets. This is a legitimate, small-scale strategy to reduce assessable assets.
3. Time your super withdrawals
If you are not yet Age Pension age, your partner's super is not assessed at all. Strategies around which partner draws from super first can significantly affect your combined assessable assets.
4. Consider the Work Bonus
If you work part-time, the Work Bonus disregards the first $300 per fortnight of employment income from the income test — allowing you to earn up to $7,800/year without affecting your pension. Unused Work Bonus accrues up to a $11,800 maximum.
Key insight: The Age Pension is not "all or nothing." The taper rates mean a partial pension remains valuable even at significant asset levels — a couple with $800,000 in assets may still receive $400–$600/fortnight in pension payments. Always model your specific situation rather than assuming you're "too wealthy" to bother.
Results are estimates based on March 2026 Services Australia rates. Actual entitlements depend on full Centrelink assessment. This calculator does not model all edge cases (e.g. gifting rules, overseas pensions, defined benefit super). Consult Services Australia at servicesaustralia.gov.au or a licensed financial adviser for personalised advice.