Australian Age Pension 2026: Eligibility, Assets Test, and How to Maximise Your Payment
The Age Pension is the foundation of retirement income for most Australians. In 2026, the full single rate is $1,149.00 per fortnight ($29,874 per year), and the couples rate is $867.00 per fortnight each ($45,084 combined). But getting the maximum entitlement requires understanding how the assets test and income test interact with your super, investments, and home. Many retirees leave money on the table by not structuring their assets correctly before age 67.
Age Pension Eligibility in 2026
To receive the Age Pension in Australia, you must meet three criteria: age, residency, and means testing.
Age: The qualifying age is 67 for anyone born on or after 1 January 1957. This applies to all new claimants from 1 July 2023 onwards. There are no earlier qualifying ages for current claimants — the gradual increase from 65 to 67 is complete.
Residency: You must be an Australian resident and have lived in Australia for at least 10 years continuously, or 10 years total with at least 5 continuous years. If you have worked in a country with a social security agreement with Australia, periods of residence there may count toward your qualifying period. New Zealand citizens who have been Australian residents for 10 years may also qualify.
Means testing: Both an assets test and an income test apply. Services Australia uses whichever test results in the lower pension payment. If you have significant assets or income, your pension reduces — or cuts out entirely above the threshold.
| Payment Type | Per Fortnight | Per Year |
|---|---|---|
| Single — full pension | $1,149.00 | $29,874 |
| Couple (each) — full pension | $867.00 | $22,542 |
| Couple (combined) — full pension | $1,734.00 | $45,084 |
Rates are indexed twice per year (March and September) to the higher of CPI or Male Total Average Weekly Earnings (MTAWE) movements. This means the Age Pension maintains its real purchasing power over time.
The Assets Test: What Counts and What Doesn't
The assets test assesses the value of most assets you own. Above the lower threshold, your pension reduces by $3 per fortnight for every $1,000 of assets. Above the upper threshold, no pension is payable.
| Status | Full Pension Below | Part Pension Cuts Out Above |
|---|---|---|
| Single homeowner | $295,500 | $695,500 |
| Couple homeowners (combined) | $443,500 | $1,045,500 |
| Single non-homeowner | $504,500 | $904,500 |
| Couple non-homeowners (combined) | $652,500 | $1,254,500 |
What is included in assets: Superannuation balances (including account-based pensions once you reach pension age), financial investments (shares, managed funds, term deposits, savings accounts), investment properties (market value less mortgage), motor vehicles, boats, caravans, and personal property above basic household goods.
What is excluded: Your principal place of residence (the family home — regardless of value), household contents and personal effects, prepaid funerals (one per person), and special disability trusts up to the cap. Funeral bonds are also exempt up to $15,000 each.
The family home exemption is the most significant asset test concession. A retiree with a $2,000,000 home and $500,000 in super receives a full or part pension based only on the $500,000 in super and other financial assets — the home value is ignored entirely.
The Income Test: Deeming and How Investment Income Is Assessed
The income test does not simply look at what income you actually receive. For most financial assets (shares, managed funds, super, bank accounts), Services Australia uses deemed income — a calculated amount based on the total value of financial assets, regardless of actual earnings or withdrawals.
Deeming rates for 2025-26:
- First $62,600 of financial assets (singles) / $103,800 (couples): deemed to earn 0.25% p.a.
- Amount above those thresholds: deemed to earn 2.25% p.a.
Example: A single retiree has $400,000 in an account-based pension. Deemed income = ($62,600 × 0.25%) + (($400,000 − $62,600) × 2.25%) = $156.50 + $7,591.50 = $7,748 per year in deemed income. This is used in the income test regardless of whether they actually withdraw that amount.
The income test free area (income below which no pension reduction applies) is $212 per fortnight for singles and $372 per fortnight for couples. Above this, the pension reduces by 50 cents per dollar of income (for singles) until the pension cuts out.
Services Australia applies whichever of the assets test or income test results in the lower pension. For most retirees with moderate super balances and low other income, the assets test is the binding constraint.
Strategies to Maximise Your Age Pension Entitlement
Several legal strategies can increase your pension entitlement by reducing assessable assets or income:
1. Spend on your home before claiming: Money spent on renovating or improving your principal residence reduces assessable financial assets without reducing the home exemption. Retirees close to the assets test threshold sometimes renovate their home (new kitchen, bathroom, extension) using investment assets in the years before or after reaching pension age.
2. Gifting within the limits: You can gift up to $10,000 per financial year (and $30,000 over five years) without the gifted amount remaining in your assessable assets. Gifts above these limits are counted as "deprived assets" for five years. Careful gifting within the limits reduces assessable assets over time.
3. Prepaid funerals: A prepaid funeral bond is excluded from the assets test up to $15,000 per person. A couple can remove $30,000 from assessable assets by prepaying funeral arrangements.
4. Spouse super contributions: For couples where one spouse is over pension age and one is under, assets held in the younger spouse's superannuation are generally not assessable until they reach pension age. Shifting assets into the under-age spouse's super can reduce assessable assets.
5. Transition timing: The age pension means test for super balances applies only from pension age — superannuation held by a person under 67 is not counted in the assets or income test of their partner. This creates timing opportunities for younger spouses.
Pension Supplements and Additional Payments
The base Age Pension rate is supplemented by several additional payments that most pensioners receive automatically:
- Pension Supplement: $80.10 per fortnight (singles) / $60.60 each (couples). Covers phone, internet, and pharmaceutical costs.
- Energy Supplement: $14.10 per fortnight (singles) / $10.60 each (couples). Helps with energy costs.
- Rent Assistance: Up to $211.20 per fortnight (singles) / $199.00 (couples) for pensioners renting in the private market. Amount depends on rent paid.
- Commonwealth Seniors Health Card: Available to those who are pension age but do not receive the Age Pension due to assets — provides access to cheaper medicines through the PBS.
The Pension Supplement and Energy Supplement are included in the headline rates above and paid automatically. Rent Assistance is additional and requires Centrelink evidence of rental payments.
Frequently Asked Questions
- Is the family home included in the assets test?
- No. Your principal place of residence is fully exempt from the assets test, regardless of its value. A retiree with a $3,000,000 home and $200,000 in super is assessed only on the $200,000. However, non-homeowners receive a higher assets test threshold (by approximately $209,000) to partially compensate for the lack of housing wealth.
- Does my super balance affect the Age Pension?
- Once you reach Age Pension age (67), your superannuation balance — including account-based pensions — is counted in both the assets test and income test (via deeming). Before pension age, your own super balance is generally excluded from your partner's pension assessment. The ATO and Services Australia share data, so your super balance is reported automatically.
- Can I receive the Age Pension if I still work?
- Yes. The Work Bonus allows Age Pension recipients to earn up to $300 per fortnight from employment without it affecting the income test. Any unused Work Bonus accumulates up to a maximum of $11,800. Combined with the income test free area, a pensioner can earn meaningful employment income before their pension reduces.
- How does downsizing affect my pension?
- If you sell your home and downsize, the proceeds are counted in the assets test from the date of sale. This can reduce or eliminate your pension, sometimes significantly. However, from age 55, you can contribute up to $300,000 (singles) or $600,000 (couples) of downsizer proceeds into super outside the normal contribution caps — though this does not exempt those funds from the assets test once in super. Careful planning before downsizing is important.
- How long does the Age Pension application take?
- Services Australia typically takes 4–13 weeks to process a pension claim, depending on the complexity of your assets. You can lodge a claim up to 13 weeks before you reach pension age, and backdating to the date you meet all criteria (age, residency, means test) is available if there are processing delays. Lodge your claim as early as possible to avoid losing payments during delays.
