The Age Pension mistake costing Australians

The Age Pension is an income support payment designed to supplement older Australians’ income and provide them with a better quality of life in retirement.

If you’re eligible for the Age Pension but are procrastinating when it comes to filling out the forms, you could be missing out on some big bucks.

A recent case study from Retirement Essentials found that one client who waited three years after he was eligible before applying for the Age Pension missed out on over $25,000 per year in Age Pension payments. That’s a staggering $75,000 of potential lost income over three years, so it pays to check your eligibility.

To find out whether you’re eligible for the Age Pension, you can read the rules below or try out the Age Pension Eligibility Calculator.

The age at which you become eligible for the Age Pension, and how much you’ll receive in your payments, is determined by several rules.  

To start, you’ll need to be at least 67 years old. However, turning 67 is not enough on its own to qualify you for the payment. You’ll also need to meet Australia’s residency rules. 

Additionally, your income and the value of your assets will be assessed to determine exactly how much you’re entitled to.  

Let’s start with the assets test – this assesses the value of your investments, car, the contents of your home, your super balance, your real estate holdings and any other assets you may own. 

The table below outlines the cut-offs for a full pension. If the value of your assets exceeds these caps, you’ll receive either a part pension, or no pension at all. Couples’ assets are assessed together.  

Source: Services Australia. Applicable 20 September 2023 to 19 March 2024

Below are the cut-offs for a part pension. If you exceed these caps, you won’t eligible for the Age Pension (with some exceptions for couples separated by illness). 

Source: Services Australia. Applicable 20 September 2023 to 19 March 2024

But wait - there's more. An income test also applies, which assesses you and your partner’s income from all sources. This includes income from financial assets such as savings, shares and superannuation. To work out how much income you earn from your financial assets, deeming rules apply. 

Single pensioners’ payments will decrease by 50 cents for every dollar they earn over $204. Couples can receive combined fortnightly income of up to $360 without their payments being reduced, but their payments will decrease by 25 cents (each) for every dollar they earn over this limit¹.

The test that results in the lowest amount of Age Pension is then used to determine your age pension entitlement.  

If you’re still unsure about your own eligibility, you can quickly check using our retirement calculator – or speak with a financial adviser.