Plan for the Pension

If you’re in your fifties or sixties you may be starting to think about life after full-time work. This is when you should get up to speed on your options for the Age Pension, rather than waiting until the day before you retire.

Knowing if you’re likely to qualify for the Age Pension is an important question in your retirement saving strategy. (Of course, your financial adviser will help you through this process.)

What are the qualifying criteria?

There are three main things Centrelink looks at when assessing your pension eligibility.

1.     Age and residency

The qualifying age is 65 years for men and 64.5 years for women. From 1 July 2017, the qualifying age for men and women will progressively increase to age 67 (by 1 July 2023).

Generally, you must live in Australia and have done so for at least ten years, including at least one continuous period of five years or more.

2.     Your income

How much you earn can affect your eligibility for a pension:


Entitlement to full pension (lower threshold)

No pension entitlement (upper threshold)


If you earn up to $152 per fortnight

If you earn over $1,663 per fortnight


If you earn up to $268 per fortnight

If you earn over $2,546 per fortnight


Every $1 over the lower threshold reduces the maximum entitlement by 50 cents (single) or 25 cents (each member of a couple.)There are separate thresholds for illness-separated couples. These figures may be higher if you get Rent Assistance.

Types of income Centrelink takes into account include:

  • gross employment earnings
  • overseas income
  • income streams and superannuation pensions
  • rent from real estate or business investments
  • deemed income on financial investments.

Retirement income stream products may provide favourable treatment under the Centrelink income test, and you may be able to work part time without affecting your Age Pension. Under the Government’s Work Bonus, the first $250 of employment income you earn each fortnight is not counted as income.

3.     Your assets

The value of your assets can also affect your pension eligibility:


Homeowner status

Entitlement to full pension

(lower threshold) if assets are valued up to:

No pension entitlement

(upper threshold) if assets are valued at over:
















Assets over the amount for maximum payment reduces the pension by $1.50 per fortnight for every $1,000 (single or couple combined).There are separate thresholds for illness-separated couples.

Limits are higher if you get Rent Assistance.

Assessable assets include:

  • bank accounts
  • managed investments
  • real estate and business investments
  • private trusts and companies
  • motor vehicles, boats and caravans
  • household contents and personal effects
  • gifted assets above certain limits.


How much is the Age Pension?

Not a lot, is the short answer. The Age Pension is just over one quarter of Australia’s average earnings^ and is approximately the same as the poverty line.

Including the Pension Supplement, the pension rate is only $19,643 per year for a single person and $29,614 a year for a couple.*

What now?

Implementing a financial plan with your adviser well before you retire can help minimise your future reliance on the Age Pension (while still maximising your entitlements) and give you peace of mind about your future financial security.

Centrelink also runs regular ‘Financial Information Service’ seminars, including a topic titled ‘Age Pension and your choices’. You can find out more at (this is Centrelink’s new website).

^ABS: 6302.0 - Average Weekly Earnings, Australia, Feb 2012

*As at 1 July 2012

Tags: Retirement