The Age Pension is a critical part of retirement income for millions of Australians, but the eligibility rules catch many people off guard. Your entitlement depends on two separate tests — the income test and the assets test — and Centrelink pays you based on whichever test produces the lower amount.
The pension isn’t all or nothing. How your assets and income are structured can mean thousands a year difference. Here’s how the tests actually work.
| Situation | Full Pension Cutoff | Part Pension Cutoff |
|---|---|---|
| Single, homeowner | $314,000 | $695,500 |
| Couple, homeowner | $470,000 | $1,045,500 |
| Single, non-homeowner | $566,000 | $947,500 |
| Couple, non-homeowner | $722,000 | $1,297,500 |
Asset test thresholds as at March 2026. These change on 1 July and 20 March each year. Your home is not counted as an assessable asset.
Understanding how these tests work is essential if you are approaching Age Pension age (currently 67) or already receiving a pension. Small changes to how your assets are structured can mean thousands of dollars a year in additional pension payments.
This guide covers the current thresholds, how each test works, and the key strategies retirees use to optimise their entitlement.
Age Pension Age and Basic Eligibility
To qualify for the Age Pension you must:
- Be at least 67 years old
- Be an Australian resident and have lived in Australia for at least 10 years (with certain exceptions)
- Meet both the income test and the assets test
If you meet the age and residency requirements, your payment amount is determined by whichever test — income or assets — results in the lower pension. This is sometimes called the “means test.”
The Assets Test: Current Thresholds
The assets test looks at the value of your assessable assets. Your family home is exempt from the assets test regardless of its value, but almost everything else counts — superannuation, bank accounts, shares, investment properties, vehicles, personal belongings, and any other financial assets.
Full pension thresholds (per fortnight, as at March 2026):
- Single homeowner: up to $314,000 in assets
- Single non-homeowner: up to $566,000
- Couple (combined) homeowner: up to $470,000
- Couple (combined) non-homeowner: up to $722,000
Part pension cut-off thresholds:
- Single homeowner: ,250
- Single non-homeowner: ,250
- Couple (combined) homeowner: ,031,000
- Couple (combined) non-homeowner: ,283,000
For every $1,000 in assets above the full pension threshold, your pension reduces by per fortnight for singles or .50 per fortnight for couples (combined). Once your assets exceed the cut-off, you receive no pension at all.
The Income Test: How Deeming Works
The income test does not look at the actual income your investments produce. Instead, Centrelink uses a system called deeming, which assumes your financial assets earn income at set rates — regardless of what they actually earn.
| Deeming Rate | Single Threshold | Couple Threshold | Rate |
|---|---|---|---|
| Lower rate | First $64,200 | First $106,600 | 0.25% |
| Upper rate | Above $64,200 | Above $106,600 | 2.25% |
Deeming rates as at March 2026. Centrelink uses these rates to estimate your investment income, regardless of what you actually earn.
Current deeming rates (as at March 2026):
- First ,600 (single) or ,800 (couple combined): deemed at 0.25%
- Amounts above those thresholds: deemed at 2.25%
Financial assets subject to deeming include bank accounts, term deposits, shares, managed funds, account-based pensions, and superannuation in pension phase. Your home, personal belongings, and real property (like an investment property) are not subject to deeming — though rental income from property is counted separately as actual income.
Income test free areas:
- Single: per fortnight
- Couple (combined): per fortnight
For every dollar of assessed income above the free area, the pension reduces by 50 cents for singles or 50 cents combined for couples.
Which Test Applies to You?
Centrelink calculates your pension under both tests and pays you the lower of the two amounts. In practice, most retirees with moderate super balances are primarily affected by the assets test, while those with higher incomes from employment, rental properties, or other sources may find the income test is more restrictive.
This is important because strategies that reduce your assessable assets may not help if the income test is already the binding constraint, and vice versa.
The difference between a good structure and a bad one can be $5,000 a year.
Common Strategies to Optimise Your Pension
There are legitimate strategies that can help you structure your finances to maximise your Age Pension entitlement. These are not loopholes — they are planning decisions that take advantage of how the means tests work.
Spend on exempt assets: Your home is exempt from the assets test. So renovating, paying off the mortgage, or prepaying expenses reduces your assessable assets while improving your lifestyle.
Gifting (within limits): You can gift up to $10$10,000 per financial year and $30,000 over a rolling five-year period without it being counted as a deprived asset. Amounts above these limits are still counted as assessable assets for five years.
Funeral bonds: Prepaid funeral bonds up to the allowable limit (currently around ,250 per person) are exempt from the assets test.
Structure your super drawdowns: How much you withdraw from super and when can affect both the assets test and the income test. Getting the timing right around your 67th birthday and Age Pension application is important.
Understand the income test free area: If your deemed income is close to the free area, small changes — like moving money from a high-balance account to prepaying expenses — can push you into a higher pension bracket.
Superannuation and the Age Pension
A common source of confusion is how superannuation interacts with the Age Pension. The rules depend on your age and the phase your super is in:
- Before Age Pension age: Super in accumulation phase is generally not counted under the assets test or income test. This changes the day you reach Age Pension age.
- At Age Pension age and beyond: All superannuation , whether it’s in accumulation or pension phase, becomes an assessable asset. Account-based pensions are also subject to deeming under the income test.
This transition is why the years immediately before and after turning 67 are so critical for planning. Decisions made in this window can affect your pension entitlement for decades.
When to Get Professional Advice
The Age Pension rules are complex, and they change regularly. The thresholds in this article are current as at March 2026, but they are updated on 20 March and 20 September each year. A strategy that works today may need adjusting after the next threshold update.
If you are within a few years of Age Pension age, or if you are already receiving a pension and suspect you may not be getting your full entitlement, it is worth having a professional review your situation. Even small adjustments to how your assets are structured can result in thousands of dollars of additional pension income over the course of your retirement.
At Great Advice, we help retirees across the Logan corridor understand and optimise their Age Pension entitlements. If you would like to know where you stand, book a free initial consultation and we will walk you through your options.
Call 07 3290 0393
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Common Questions
How much can I have in assets and still get the Age Pension?
As at March 2026, single homeowners can have up to $314,000 in assessable assets for a full pension and up to $704,500 for a part pension. Couples can hold $470,000 (full) or $1,059,500 (part). Non-homeowners get a higher threshold.
What counts as an asset for the Age Pension?
Super in pension phase, investment properties, shares, bank accounts, vehicles, contents (at second-hand value), and businesses. The family home is exempt up to two hectares of land.
How does the income test work?
Centrelink deems your financial assets earn a set rate — 0.25% on amounts up to a threshold and 2.25% above. This deemed income, plus any actual income from work, super pensions, or property, is assessed.
Can I get the Age Pension if I own my home?
Yes. The home is exempt from the assets test up to two hectares of land. Owning your home actually helps qualification because it removes a major asset from the test.
How does my spouse’s income affect my Age Pension?
Couples are assessed jointly, regardless of whose name assets are in. Half the combined income and assets is allocated to each partner. Splitting assets between spouses doesn’t change your pension entitlement.
References
- Services Australia, Age Pension: How Much You Can Get, March 2026 rates.
- Services Australia, Assets Test for Age Pension, 2026.
- Services Australia, Income Test for Age Pension, 2026.
- Services Australia, Deeming: How We Assess Your Financial Assets, 2026.
- Services Australia, Gifting Rules and Deprivation Provisions.
- Australian Taxation Office (ATO), Super and Age Pension Interactions.
- MoneySmart (ASIC), Age Pension and Government Entitlements.
General Advice Warning: This article contains general information only and does not take into account your individual objectives, financial situation, or needs. Age Pension rules change regularly and the thresholds quoted are current as at March 2026. Before making any financial decisions, you should seek personal financial advice from a licensed adviser. Great Advice Financial Advisers is a Corporate Authorised Representative of Akumin Financial Planning Pty Ltd (AFSL 232706).
