Age Pension 101

Understanding Age Pension

Not everyone will be eligible for the age pension. There are eligibility criteria including residency, age qualification and a means test.

The maximum age pension benefit is dependent on your situation. A single pensioner may be entitled to $1,064 a fortnight or $27,644 a year. Each member of a couple may be entitled to $802 a fortnight or $20,852 a year. This means a couple (combined) can get up to $41,704 a year. These rates are applicable from 20 March 2023 and include the supplements.

Not everyone who is eligible for the age will receive the maximum benefit. How much your age pension benefit will be is determined by the application of an assets test and an income test. The test that gives you the lessor pension benefit amount is the test that is used to work out your benefit.

Asset Test 

To qualify for the maximum age pension benefit, a single homeowner must have assets valued below $280,000. To qualify for a part pension, a single homeowner must have assets valued at below $634,750.

Singles who don’t own their own home can have assets valued at up to $504,500. To qualify for a part pension, a single non-homeowner must have assets value at below $859,250.

To qualify for the maximum age pension benefit, a couple who own their own home must have assets valued below $419,000. To qualify for a part pension, a couple who own their own home must have assets valued at below $954,000.

Couples who don’t own their own home can have assets valued at up to $643,500. To qualify for a part pension, a couple who don’t own their own home can have assets value at below $1,178,500.

If you are unsure of what are assessable assets, please read my article on assessable assets!

Income Test 

For a single person to be eligible for the maximum age pension, assessable income must be below $190 a fortnight. They may still qualify for a part pension if their income is less than $2,318 per fortnight.

For a couple to be eligible for the maximum age pension, assessable income must be below $336 a fortnight. They may still qualify for a part pension if their income is less than $3,544 a fortnight.

Work Bonus

The work bonus allows you to earn up to $300 per fortnight from personal exertion income. This includes both employment income and self-employed income.

If a pensioner does not earn income thereby not utilise their work bonus credits, their work bonus credits accumulate each fortnight. The maximum credit balance is $7,800 ($300 X 26 fortnights).

When a pensioner does earn income, that income will not be assessed unless it is in excess of your current work bonus credits. The work bonus credits are decreased by the amount earnt.

As a temporary measure introduced in September 2022, an additional $4,000 of work bonus credits were allocated to every pensioner’s account and the maximum work bonus credit balance lifted to $11,800.

It is expected that the maximum credit balance will be reduced back to the $7,800 on 31 December 2023. So if a pensioner has not used their additional work bonus credits before this date, it is expected that they will lose them.