The Government’s Age Pension is a regular fortnightly payment designed to provide retirement income support for eligible older Australians. Many Australians are eligible for the Age Pension, and if you’re among them, you could use it to boost your retirement income.
Determining whether you are entitled to the Age Pension and to what amount can be complicated, and a number of changes affecting the Age Pension occur either annually or more frequently.
To give you a bit of an idea of what you could receive, we’ve highlighted some of the key payment rates and changes recently made to the Government’s Age Pension.
Latest Age Pension rates
There are different rates of Age Pension payments for single and partnered people. The current maximum fortnightly payments are1:
|
Per fortnight |
Single Person |
Couple each |
Couple combined |
Couple apart due to ill health |
|
Maximum basic rate |
$936.80 |
$706.20 |
$1412.40 |
$936.80 each |
|
Maximum pension supplement |
$75.60 |
$57.00 |
$114.00 |
$75.60 each |
|
Energy supplement |
$14.10 |
$10.60 |
$21.20 |
$14.10 each |
|
Total per fortnight |
$1026.50 |
$773.80 |
$1547.60 |
$1026.50 each |
The Department of Social Services regularly reviews these rates to reflect changes in the Consumer Price Index , Pensioner and Beneficiary Living Cost Index and the Average Weekly Earnings Index. The amounts shown above are the maximum rates each fortnight. In some circumstances, you can choose to get your payment each week. Depending on your circumstances, you may also get an advance payment.
Reaching preservation age and finishing up at work also doesn’t mean you’ll automatically get the Age Pension. Your eligibility is assessed based on your age, residency status and an assessment of your income and assets.
Working out your entitlements isn’t always straightforward. You can find out more regarding your eligibility and entitlement to a pension through Services Australia or visit our checklist to figure out if your eligible for the Age Pension.
Abolishing the work test for retirees
The Government abolished the work test on 1 July 2022. Under the change, retirees aged between 67 and 74 can top up their super without having to satisfy any employment requirement, provided their super is less than $1.7 million on 30 June2022.
Seek help from a professional
If you’re eligible for the Age Pension and approaching retirement age, you don’t necessarily have to spend all your super before you’re eligible for pension payments.
If you’d like some help assessing your eligibility for benefits, and strategies to maximise your retirement savings, a financial coach may help set you on the right track. Their job is to help you with every aspect of your financial life, while keeping you on track to achieve your goals.
Super income stream minimum withdrawal
The Australian Government has extended the temporary reduced minimum drawdown rates to 30 June 2023 for the financial year 2022/23. This government measure started in March 2020 in response to COVID-19’s impact on investment markets.
|
Age at 1 July each year |
Temporary minimum drawdown rates end 30 June 2023 |
Default minimum drawdown rates start from 1 July 2023 |
|
Under 65 |
2% |
4% |
|
65-74 |
2.5% |
5% |
|
75-79 |
3% |
6% |
|
80-84 |
3.5% |
7% |
|
85-89 |
4.5% |
9% |
|
90-94 |
5.5% |
11% |
|
95 or more |
7% |
14% |
Additional changes to the Age Pension
$4,000 work bonus increase
On 1 December 2022, a one-off $4,000 income credit will be added to the Work Bonus income bank of those at least pension age and in receipt of an Age Pension, Disability Support Pension or Carer Payment.
Under the Work Bonus, the first $300 of fortnightly income from work is not assessed under the pension income test. Any unused part of the $300 fortnightly Work Bonus accrues in the Work Bonus income bank and can be used to offset future income from work.
Currently, the Work Bonus income bank is capped at $7,800. This will temporarily be increased to $11,800 until 31 December 2023.
Effective 1 January 2024, any amount in the Work Bonus income bank that exceeds $7,800 will be removed and no longer available to offset future income from work.
For more information about the Work Bonus, see the Services Australia website.
Regaining access to the Age Pension made simpler
From 1 January 2023, those who lose their Age Pension due to the income test (and partners in receipt of eligible social security entitlements) will not have to reapply for the Age Pension for up to two years.
To be eligible, they must also continue to qualify for the income support payment had they not failed the income test. Currently, the Age Pension cancels after 12 weeks of exceeding the income limit.
Retention of the Pension Concession Card
From 1 January 2023, Age Pensioners, Disability Support Pensioners, and their partners (who also hold a Pensioner Concession Card) will be able to retain their Pensioner Concession Card and its associated benefits for two years following the cessation of their income support payment due to the income test.
Currently, Age Pensioners and Disability Support Pensioners lose eligibility for the pension concession card after 12 weeks and 52 weeks of their pension ceasing due to their level of income respectively. If temporarily absent from Australia, the maximum qualification period of up to six weeks still applies.
Where to go to for more information
Planning for retirement and working out your entitlements isn’t always straightforward. When you think about your retirement and how you’re going to fund it, you may only consider your super balance – but you may also be eligible for additional Age Pension payments.
Find out how your super and the Government Age Pension can work together by contacting Services Australia and speaking to a financial coach or call us today.
1 Australian Government Department of Human Services – Age Pension: https://www.humanservices.gov.au/individuals/services/centrelink/age-pension
2 Australian Government Department of Human Services – Age Pension – Deeming Rates: https://www.servicesaustralia.gov.au/deeming
Important information and disclaimer
This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at December 2022 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.