The Government Age Pension pays you a regular income each fortnight. If you have retired and are eligible, it can work together with income you get from other sources. These may include your super and other savings or investments.
Key points:
- You’re eligible if you’re 65-67 years, an Australian resident, and pass an income and assets test.
- You could even receive the Government Age Pension if you’re using super money in retirement.
- The Government Age Pension is different to an account-based pension from your super.
Super is one part of your income in retirement. For many Australians it’s the biggest part.
But some of us might worry we won’t have enough in our super and savings to afford retirement.
To help bridge the gap, there’s the Government Age Pension, which is a fortnightly income support payment to help eligible Australians in retirement.
More than 60% of Australians over the age of 65 receive extra income from the Government Age Pension, to help fund their retirement.
To be eligible, you need to be 66 and 6 months, or older, depending on when you were born.
You’ll also need to pass an income test and an asset test.
These measure the value of any savings or investments you have, as well as the things you own, besides your home.
Over time, your income and assets will change.
So even if you don’t qualify now or when you retire, you can keep checking to see if that changes.
You’ll also receive a Pensioner Concession Card. This saves you money on essentials like medicine and health services.
Depending on where you live, it can even save you money on gas, water, electricity, car registration and public transport.
If you’re not eligible for the Government Age Pension, you might qualify for a Seniors Health Card which helps lower the cost of prescription medicines, health services, energy bills and transport.
To learn more about Government benefits, visit aware.com.au/agepension
Disclaimers
To learn more about how more than 60% of Australians rely on the government age pension visit www.aihw.gov.au/reports/australias-welfare/age-pension and for a full list of government benefits to support your retirement visit www.servicesaustralia.gov.au/benefits-pensioner-concession-card?context=22006
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We have partnered with Retirement Essentials to help you feel confident that you’re getting all your Age Pension entitlements.
Use their calculator to find out how much you could get if you’re eligible.
You may not be eligible for the Government Age Pension now, but over time your income and assets will change.
So it’s important to keep checking because you could become eligible.
1 Australian Institute of Health Welfare, March 2021
1. You need to reach a certain age
From 1 July 2023, the qualifying age for everyone will be 67.
In the meantime, the age will increase by six months, every six months until it reaches 67 years.
Refer to table below. Scroll table horizontally on mobile
| If you were born | Your pension age is |
| 1 July 1952 to 31 December 1953 | 65 years and 6 months |
| 1 January 1954 to 30 June 1955 | 66 years |
| 1 July 1955 to 31 December 1956 | 66 years and 6 months |
| 1 January 1957 onwards | 67 years |
Why is the Government Age Pension age rising?
People are living longer in retirement, so the Government has been gradually increasing the pension age from 65 to 67. This is to encourage Australians to grow larger super balances so their money in retirement will last longer.
2. You need to pass an income and assets test
Apart from your age, the Government uses an income and assets test to see if you're eligible. The income test looks at all sources of income that you receive. This includes income from financial investments such as your super2.
The assets test looks at all your financial assets, aside from your home.
The test that results in the lower Government Age Pension payment is the one that is used to decide how much you receive. Find out more about the income and asset tests.
Government Age Pension amounts for singles and couples
Being in a couple affects how much you could get paid.
3. You must be an Australian resident
On the day you apply and for at least 10 years before.
2 Centrelink use rules to work out how much income your financial investments produce. These rules assume your assets earn a set percentage of income. This may be different to what they actually earn.
Every six months, we provide a report to Centrelink on how much you receive from your retirement income stream. If this amount changes, it could affect how much Government Age Pension you get.
Other Government benefits
When you receive the Government Age Pension, you also get a Pensioner Concession Card. This provides discounts on medicine, health and other Government services.
Depending on the state you live in, you could get discounts on gas, water, electricity, car registration and travel concessions. This means the Government Age Pension helps pay for, and lower, your expenses too.
The Commonwealth Seniors Health Card is available for eligible people. Even if you’re not eligible for the Government Age Pension, you may be eligible for this card. Some state and local governments offer extra health, transport, education and recreation concessions.
If you receive a Centrelink payment, like the Government Age Pension, and pay rent, you may qualify for rent assistance. How much you’ll receive depends on how much rent you pay.
If you own a home, you are not eligible.
Find out more about Rent Assistance at Services Australia.
This scheme offers eligible Australians a chance to supplement their existing retirement income with a tax-free fortnightly loan from the government.
This loan uses your house as security.
You are charged interest on the loan, but regular repayments are optional. You can stay in your house until it’s sold, with the loan repaid from the proceeds of the sale.
Find out more about the Home Equity Access Scheme at Services Australia.
If you’re an eligible pensioner, the Work Bonus can help you earn more income from working without reducing your Government Age Pension.
This means you can earn up to $300 a fortnight on top on your Government Age Pension.
Find out more about the Work Bonus at the Department of Social Services.
For a full list of Government benefits to help support you in retirement, visit Services Australia
Understanding the Government Aged Pension is important for planning your retirement, so you can see how it works with super. We'll look at eligibility for the Government Aged Pension and how it can make your super last longer. Will also look at how you can begin to access your super and other government benefits.
While you're working, your income is mainly the salary you earn. But when you retire, your income could come from a few different places your super savings, your personal savings. Any other investments you have. And the Government Aged Pension. The Government Aged Pension is an income support payment to help eligible older Australians afford their basic living expenses in retirement. More than 60% of Australians over the age of 65 receive extra income from the Government Aged Pension. Generally, to receive the aged pension, a person needs to be eligible pension age and an Australian resident who's lived in Australia for at least ten years. The age when you can start receiving the Government Aged Pension depends on when you were born. You'll find your eligible age on this chart.
If you've reached the required age, you'll also need to prove that you actually need the pension. To see if you're eligible the government uses income and assets tests. For couples, your combined assets and incomes will be tested. The income test looks at all the sources of income you receive. This includes income from financial investments such as super, savings and shares. The assets test measures the value of the things you own, including your car, furniture and other valuable assets like jewellery and boats. Once you've reached your aged pension age, the assets test will also include your super. The assets test does not include your home. Whichever test gives you the lower payment amount is the one that will be applied.
If you qualify for the Government Aged Pension, you'll receive a payment every two weeks. As of July 2023 that means a maximum of $1,064 for a single person, or $1,604 for a couple, or just below $28,000 a year if you're a single person and just below $42,000 a year for a couple, these amounts can change so you should check with Centrelink for current rates.
As we've just seen, the Government Aged Pension is designed to work with super and make it last longer. Now let's look at how you can start receiving your super as an income, which you can do once you've reached your preservation age. You'll find your preservation age on this chart. Remember, your preservation age is different from your government pension age, which was shown earlier. There are two ways to keep your money in super and convert it into a steady income, while you're still working or when you've retired. Once your account is set up, you'll receive payments directly into your nominated bank account. For both options since your money stays invested, it keeps earning investment returns, which means you could have more income throughout your retirement. And there are tax benefits to. Let's look at the first option. If you've reached your preservation age and you're still working, you can open a transition to retirement account. This can be good if you'd like to work less but still want to maintain your current pay. A transition to retirement account helps you ease into retirement by paying you an income from your super while you continue to work. So your super keeps growing as you start to wind down. And you could save on tax at the same time. The second option is to convert your super into income by opening a retirement income account with us. You can do this when you retire and meet your preservation age all once you've reached 65. A retirement income account lets you start withdrawing regular tax free income from your super, and because you're still invested, your super can keep growing. With this account, you can control how much and how often you receive payments and you can make changes whenever you need to. So now that we know more about income accounts, let's look at the benefits of staying
invested. Because if you keep your money invested, it could mean you could have more income to enjoy in retirement.
In this example, you can see the difference between withdrawing super and investing your money in a bank account, compared to leaving your money in super and receiving it as an income. Staying invested in super means you could have over $5,000 more each year. Over time, this could make a big difference to the amount you have to spend in retirement.
Now let's look at an example of how the government age pension can help make your super last longer. Eliza is 67 and has just retired. She lives with her pet dog in a house she owns and has paid off her mortgage. She has $300,000 in super but very few other assets and only a small amount in savings. Eliza works out she'll need $49,000 a year to spend in retirement. Then using the Centrelink payment finder tool, Eliza finds out she could receive about $28,000 per year from the Government Aged Pension. Eliza can make the most of her aged pension payments and use this $28,000 a year first, so she'll only need to withdraw $21,000 from her super each year. Without the Government Aged Pension, allowing for investment growth of 6% a year, Eliza's super would last just over six years. But with the Government Aged Pension, her super could last over 18 years until Eliza is 85.
Now, here's an example where the aged pension won't apply. Marg and Gino are in the seventies, married and retired. As high income earners they've paid off the mortgage on their home, they have about $600,000 combined in their super accounts, they also have a holiday home worth about $450,000 that they rent out. Their family home isn't counted towards their assets. However, using the Centrelink payment finder tool, they discover the combined value of their super and holiday home is above the assets test limit. They won't be eligible for the Government Aged Pension. So Marg and Gino will need to use their super and their rental income to fund their retirement.
As well as providing income to make retirement possible, the government offers benefits for retirees to help make life less expensive. If you received the Government Aged Pension, you'll also receive a pensioner concession card. This saves you money on things like medicine and health services. Depending on where you live, it could even save you money on gas, water, electricity, car registration and public transport. If you're not eligible for the Government Aged Pension, you might qualify for a seniors health card. This saves you money by lowering the cost of prescription medicines, health services, energy bills and transport. As you've seen, over 60% of Australians will use the Government Aged Pension to help bridge the gap between super, their savings and their desired retirement income. To make sure you're on track. Make a free appointment to speak to one of our experts at aware.com.au/book
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Aware Super has partnered with Retirement Essentials
Applying for an Age Pension can be confusing and difficult. We've partnered with Retirement Essentials to help make this process simpler. Use their eligibility calculator to find out how much you could get.
Speak to a financial planner
A financial planner can work through complex financial matters and help you create the right strategies to achieve your financial goals in retirement. They’ll explain any next steps, fees and charges before progressing.