By Philippa Billings, Chief Advice Officer, Otivo
For many Australians approaching retirement, the age pension forms part of the financial picture — either as a primary income source or as a supplement to superannuation savings. Understanding how it works, what you're entitled to, and what else comes with it can make a real difference to how confidently you plan the years ahead.
What is the age pension?
The age pension is a government-funded, means-tested payment administered by Services Australia. It provides a regular income for older Australians who have limited financial resources in retirement. Payments are made fortnightly and are indexed twice a year — in March and September — to keep pace with changes in the cost of living.
The age pension is separate from superannuation. Super is money you and your employer have contributed to a private fund over your working life. The age pension is funded by the government and paid directly to eligible recipients.
Who can get the age pension?
To be eligible for the age pension, a person must meet three main criteria set out by Services Australia.
- Age — The qualifying age is currently 67 for anyone born on or after 1 January 1957.
- Residency — A person must be an Australian resident and have lived in Australia for at least 10 years in total, with at least five of those years being continuous.
- Income and assets tests — A person's income and assets must fall within the limits set by Services Australia. Both tests are applied and the one that results in the lower payment determines what's actually paid.
Full eligibility details are available at servicesaustralia.gov.au
How much is the age pension?
Age pension rates are usually increased on 20 March and 20 September each year. The age pension payable as at 20 March 2026, including the pension supplement and energy supplement, as published by Services Australia (cents are ignored) are:
- Singles: $31,223 per year
- Couples (combined): $47,070 per year
- Couples (each): $23,535 per year
These are the maximum amounts. The actual payment a person receives depends on the outcome of the income and assets tests.
How do the income and assets tests work?
What is the income test for the age pension?
The income test assesses all income a person or couple receives, including wages, deemed returns on financial investments, and income from any account-based pensions. As at 20 March 2026, a single person can have up to $218 per fortnight in income before their pension reduces. For couples, the combined free area is $380 per fortnight. Above those thresholds, the pension reduces by 50 cents for every dollar of income over the limit.
What is the assets test for the age pension?
The assets test looks at the total value of a person's assets, not including their primary residence if they're a homeowner. As at 20 March 2026, the full pension asset free areas are:
- Singles (homeowner): Full pension with assets up to $321,500
- Singles (non-homeowner): Full pension with assets up to $579,500
- Couples (homeowner, combined): Full pension with assets up to $481,500
- Couples (non-homeowner, combined): Full pension with assets up to $739,500
The pension reduces by $3.00 per fortnight for every $1,000 of assets above the free area. Superannuation balances count as an asset once a person reaches age pension age. Both tests are always assessed, and the lower resulting payment is what's paid.
What other benefits come with the age pension?
Receiving even a part pension opens up access to a range of additional support from the Australian Government and state and territory governments. These can add meaningful value beyond the fortnightly payment itself.
Pensioner Concession Card
Age pension recipients automatically receive a Pensioner Concession Card. This provides discounts on medicines through the Pharmaceutical Benefits Scheme (PBS), bulk-billed GP visits (subject to the doctor's agreement), and discounts on utility bills, council rates, public transport, and vehicle registration — depending on the state or territory a person lives in.
Commonwealth Seniors Health Card
Australians who have reached pension age but don't qualify for the age pension due to the income or assets test may still be eligible for the Commonwealth Seniors Health Card, which provides some of the same health-related concessions.
Rent Assistance
Age pension recipients who rent privately may be eligible for Rent Assistance — an additional payment on top of the base pension rate.
Telephone Allowance
A quarterly telephone allowance is available to some pension recipients who hold a home telephone, mobile, or internet service.
How does superannuation interact with the age pension?
Superannuation and the age pension are connected in several important ways. Once a person reaches age pension age, their super balance is counted as an assessable asset under the assets test, and deemed returns on super are assessed under the income test. This means the size of a person's super balance can affect how much age pension they receive.
Some people find that understanding how these two income sources interact well before retirement — rather than at age 67 — makes for much more confident planning.
Otivo's retirement planning tool takes into account age pension eligibility alongside super balance, other investments, and retirement lifestyle goals, giving a joined-up view of what retirement income could look like.
Frequently asked questions
What is the age pension age in Australia?
The qualifying age for the age pension in Australia is 67 for anyone born on or after 1 January 1957. It applies equally to men and women. Full eligibility details are available through Services Australia.
Does superannuation affect the age pension?
Yes. Once a person reaches age pension age, their superannuation balance is included in the assets test, and deemed earnings from super are assessed under the income test. A higher super balance can reduce the age pension amount, or result in no pension being payable. How much it affects the payment depends on the total value of all assessable assets and income.
Can I get the age pension if I'm still working?
A person can receive the age pension and still work, provided their total income stays within the income test limits. Once employment income exceeds the free area, the pension payment reduces by 50 cents for every dollar of income over the threshold. Services Australia has a payments and services estimator that can help with modelling different scenarios.
What is the difference between a full pension and a part pension?
A full pension is the maximum fortnightly rate available to a person who passes both the income and assets tests comfortably within the free areas. A part pension is a reduced amount paid to people whose income or assets fall between the free area and the cut-off threshold. Both a full and a part pension come with access to the Pensioner Concession Card and associated benefits.
Planning ahead makes a difference
The age pension is an important part of retirement income for many Australians, but it works best when it's understood in context — alongside superannuation, other savings, and personal goals. Knowing roughly what to expect from the pension, and how it interacts with super and investment assets, makes it much easier to plan with confidence.
Otivo is a licensed digital financial advice platform (AFSL No. 485665) that helps Australians understand what their retirement income could look like. The retirement planning module factors in age pension eligibility, super balance, other investments, lifestyle goals, and more.
The information in this communication is current as at May 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd. Sources: Services Australia (servicesaustralia.gov.au)