Age Pension guide

Age Pension assets test and income test, clearly.

When to get advice

When a small structure change could move the pension.

The Age Pension means test is mechanical, but your decisions are not. If you are close to an assets test or income test cutoff, starting an account-based pension, helping a parent, or unsure what Centrelink counts, get the numbers checked before you act.

• Close to a cutoff
• Starting a super pension
• Helping a parent

Get Age Pension guidance

Last updated: 6 May 2026. This guide explains the Age Pension assets test, Age Pension income test and Age Pension means test using Services Australia thresholds checked on 6 May 2026. The key Services Australia assets, income and deeming pages used below were last updated on 20 March 2026.

The Age Pension is a critical part of retirement income for many Australians, but the eligibility rules catch people off guard. Your entitlement depends on two separate tests: the income test and the assets test. Centrelink pays you based on whichever test produces the lower amount.

Asset test limits are from the Services Australia Age Pension assets test page, checked 6 May 2026. Services Australia says the Department of Social Services reviews asset limits and cut-off points in March, July and September.

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 affect pension payments.

This guide covers the current thresholds, how each test works, and the key planning decisions retirees commonly review.

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 Age Pension assets test, current thresholds.

The Age Pension assets test looks at the value of your assessable assets. Your family home is exempt from the assets test regardless of its value, but most other assets can count: superannuation once you reach Age Pension age, bank accounts, shares, managed funds, investment properties, vehicles, personal belongings, and other financial assets.

Full pension assets limits from 20 March 2026:

• Single homeowner: up to $321,500 in assessable assets
• Single non-homeowner: up to $579,500
• Couple homeowner: up to $481,500 combined
• Couple non-homeowner: up to $739,500 combined

Part pension assets cut-off points from 20 March 2026:

• Single homeowner: $722,000
• Single non-homeowner: $980,000
• Couple homeowner: $1,085,000 combined
• Couple non-homeowner: $1,343,000 combined

For the standard assets test, Services Australia reduces the pension by $3 per fortnight for every $1,000 of assets above the relevant full-pension limit. Once your assets are over the cut-off point for your situation, the Age Pension cancels.

Check the current Services Australia assets test limits.

The Age Pension income test and deeming.

The Age Pension income test counts assessable income from employment, investments, rental property, super pensions and other sources. For financial assets, Centrelink usually uses deeming, which assumes your financial assets earn income at set rates regardless of what they actually earn.

Deeming figures are from the Services Australia deeming page, checked 6 May 2026.

Income test free areas from 20 March 2026:

• Single: up to $218 per fortnight before your pension reduces
• Couple living together or apart due to ill health: up to $380 combined per fortnight before each person’s pension reduces

For standard-rate pensioners, a single person’s pension reduces by 50 cents for each dollar over $218. For couples, each person’s pension reduces by 25 cents for each dollar of combined income over $380.

Standard fortnightly income cut-off points: $2,619.80 for a single person and $4,000.80 combined for a couple living together. Different transitional and illness-separated rates can apply.

Check the current Services Australia income test rules.

Which Age Pension means test applies to you?

Centrelink calculates your pension under both tests and pays you the lower of the two amounts. That is why people often refer to the Age Pension assets test and Age Pension income test together as the Age Pension means test.

In practice, many retirees with moderate super balances are affected most by the pension asset test. People with employment income, rental income, or higher deemed financial income may be affected more by the income test.

This is important because strategies that reduce assessable assets may not help if the income test is already the binding constraint, and vice versa.

Common strategies to optimise your pension.

There are legitimate strategies that can help you structure your finances to maximise your Age Pension entitlement. These aren’t loopholes. They’re 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 $10,000 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 expenses are usually exempt. Funeral bonds can also be exempt if they meet Services Australia’s rules and stay within the Funeral Bond Allowable Limit.

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 were checked against Services Australia pages used on 6 May 2026, with the key assets, income and deeming pages last updated by Services Australia on 20 March 2026. 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 south-east Queensland understand and optimise their Age Pension entitlements. If you would like to know where you stand, book a meeting and we will walk you through your options.

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