To qualify for the Age Pension, there are age and residence requirements that you must satisfy.
20 March 2016: Getting older usually brings with it plenty of life changes. For many Australians, one of the major lifestyle changes which comes with becoming a senior is that you may need to apply for the age pension.
The Age Pension is a scheme which pays out a steady income to eligible Australians, or in the case of those with a larger amount of money, a supplement to help them cope with the costs of living. All the monies that are paid out under this scheme come from different types of tax collections and are the sole responsibility of the Australian government. As with most government payments, it has eligibility requirements and a process which must be followed in order to start receiving payments.
How much pension will you receive?
Please note that finder.com.au is not affiliated with the Department of Human Services or Centrelink. If you would like an indication of pension rates, need assistance with your Age Pension claim, or want to know your eligibility to access government benefits, please consult a financial planner.
If you are in need of finance, please check our guide to loans for pensioners and seniors
Eligibility requirements for Age Pension
Below are the eligibility requirements that anyone seeking the Age Pension needs to satisfy.
Age requirements for the Age Pension
To be eligible for the age pension, you must be 65 years or older, regardless of whether you're male or female. From 1 July 2017, the qualifying age will increase to 65 years and six months. The qualify age will increase by six months every two years, to 67 years by 1 July 2023.
| If you were born between | You qualify for age pension at age |
|---|---|
| 1 July 1952 to 31 December 1953 | 65 years and six months |
| 1 January 1954 to 30 June 1955 | 66 years |
| 1 July 1955 to 31 December 1956 | 66 years and six months |
| From 1 January 1957 | 67 years |
*Table taken from the Department of Human Services
Residence requirements
In addition to the age requirements, you also have to meet residence requirements in order to be eligible for payments for the age pension, which currently are;
- On the day you submit your claim. You must be an Australian resident and physically present in Australia.
- 10 year residence requirements. This requirement has to be met by any person who wants to receive an age pension. The 10 year qualifying residence requirement states that you have to be living in Australia continuously for a period of 10 years. If you have lived in Australia on and off, then the total of all such periods of residence must be equal to or more than 10 years. Within these smaller periods, there should be at least one period where you have lived in Australia continuously for five years.
There are exceptions to this rule if you were a refugee or receiving a widow allowance.
Citizenship
If you are an Australian citizen and have been residing in Australia then you can be eligible for the age pension. New Zealand citizens may also be eligible for age pension in Australia as long as they were in Australia on the date 26th February 2001, or were living in the country for at least one year in the two years before this qualifying date. People who have been living in Australia under a permanent residence visa may also be eligible for age pension.
Income test requirements
There's also an income test the Government will carry out to assess whether or not you're eligible for the Age Pension. The income test will apply to the following payments and family situations:
- Age Pension.
- Wife Pension.
- Widow B Pension.
- Bereavement Allowance.
- Carer Payment.
- Disability Support Pension.
You will be exempt from the income test if you are permanently blind and receive Age Pension or Disability Support Pension and you also do not receive rent assistance.
There are different income cut-off points that apply depending on whether you are single, married, disabled, if you have any dependents, etc.
When your age pension is zero
If you earn enough income your payment is reduced to $0. Take a look at the table below to see what the cut-off point is for your family situation. If you earn below the amount set for your situation you may be eligible for the pension.
Please be aware your payment eligibility will depend on your specific circumstances and this table should just be used as a guide.
| Your family situation | Maximum you can earn per fortnight until it reaches $0 |
|---|---|
| Single | $1,918.20 |
| Couple (combined) | $2,936.80 |
| Illness separated (couple combined) | $3,800.40 |
| Transitional rate pensioners - Single | $2,010.50 |
| Transitional rate pensioners - Couple (combined) | $3,271.00 |
| Transitional rate pensioners - Illness separated (couple combined) | $3,985.00 |
Figures as of 27 September 2016
If your income is below these limits, then the amount of pension you are eligible to receive will also depend on your income. Check the table below to see up to date information on what you are eligible for.
When you can receive the full or part age pension
Single
| Fortnightly income | up to $164 | over $164 |
|---|---|---|
| Reduction in payment | none - full payments | 50 cents for each dollar over $164 |
Couple combined, couple separated due to illness
| Fortnightly income | up to $292 | over $292 |
|---|---|---|
| Reduction in payments | none - full payment | 50 cents for each dollar over $292 |
Asset requirements
There are limits to the amount of assets you can own when receiving the Age Pension. Like the income tests mentioned above, the limit of assets you can own depends on your status, including if you're single, a couple, a couple separated by illness, or a couple where only one partner is eligible for the pension. Assets include cash, gifts, real estate, businesses, farms, vehicles, life insurance policies and more.
Changes to the age pension in 2017
- New asset test limits will take effect. You can see these new limits in the tables below.
- Up to the end of 2016, your pension is reduced by $1.50 per fortnight for every $1,000 of assets you have over the limit. Starting from 1 January 2017, this will change to $3 for every $1,000 of assets.
- You will be notified if these changes reduce your pension by more than a dollar. If they increase your pension you will not be informed and will start getting the additional payments automatically.
- If your pension is cancelled as a result of these new limits, you will be notified. Pending eligibility you will also receive a non-income tested commonwealth seniors healthcare card.
- Pension bonus scheme participants, who must have signed up before July 2014, may have their bonuses affected by these changes. You may want to claim your bonus either before or after 2017 depending on your situation.
- Aged care fees are partially determined by your pension income. If your government subsidised aged care fees change you will receive a letter, separate to the notification you will receive if your pension is being reduced.
Limits are updated each year in January, March and September, so be sure to visit the Department of Human Services for current information. The following tables outline the asset test limits for allowances, full pensions and past pensions. This table should only be used as a guide and for up to date asset test limits you should visit the Human Services website.
- Your principal home - generally up to two hectares.
- All Australian superannuation not drawn down (however, only up until pension age).
- Property or monies left to you in an estate which you're not able to receive - generally for a period of up to 12 months.
For more information, please see the Human Services website.
To receive the full pension
These asset test limits apply to full pensions. New limits will take effect on 1 January 2017.
| Family situation | Limit for homeowners | Limit for non-homeowners | Respective new limits in 2017 |
|---|---|---|---|
| Single | $209,000 | $354,500 | $250,000 and $450,000 |
| Couple (combined) | $296,500 | $448,000 | $375,000 and $575,000 |
| Illness separated (couple combined) | $296,500 | $448,000 | $375,000 and $575,000 |
| One partner eligible (combined assets) | $296,500 | $448,000 | $375,000 and $575,000 |
*Figures as of 10th Oct 2016
To receive part pension
For part pensions your assets must be less than the following. New limits apply 1 January 2017.
| Family situation | For homeowners | For non-homeowners | Respective new limits in 2017 |
|---|---|---|---|
| Single | $793,750 | $945,250 | $542,500 and $742,500 |
| Couple (combined) | $1,178,500 | $1,330,000 | $816,000 and $1,016,000 |
| Illness separated (couple combined) | $1,466,000 | $1,617,500 | $960,000 and $1,160,000 |
| One partner eligible | $1,178,500 | $1,330,000 | $816,000 and $1,016,000 |
*Figures as of 10th Oct 2016
If you are a transitional pensioner your assets will need to be less than the following:
| Family situation | For homeowners | For non-homeowners | Respective new limits in 2017 |
|---|---|---|---|
| Single | $701,500 | $853,000 | $496,250 and $696,250 |
| Couple (combined) | $1,091,000 | $1,242,500 | $772,500 and $972,500 |
| Illness separated (couple combined) | $1,281,500 | $1,433,000 | $867,500 and $1,067,500 |
| One partner eligible (combined assets) | $1,091,000 | $1,242,500 | $772,500 and $972,500 |
*Figures as of 10th Oct 2016
How do I apply for the Age Pension?
If you’re eligible for the Age Pension, you can apply; however, the rate at which you will be paid the pension will be determined by the assets that you own as well as the income that you are earning. Hence, the results of your income and assets test are vital to the rate of Age Pension you will receive.
- Income test for age pension in Australia. If you are a single person and your income from all sources is equal to or less than $156 every fortnight, then you will be eligible to receive the full age pension from the government. However, if your income exceeds this limit, you will not get the full rate of age pension but can receive part pension. The minimum income requirements for a couple are lower than for single people. Hence, if you are living as a couple, you should be earning a combined income of less than $276 every fortnight in order to receive full rate of age pension.
- Assets test for age pension in Australia. Apart from the income test, the asset test will also determine the rate at which your age pension will be paid. If you are a single person and you own a home in Australia, then your total asset value should be lower than $196,750 in order to qualify for the full rate of payment of age pension. If you do not own a home, your asset value should be lower than $339,250. This amount differs for a couple and also depends on whether you own a home or not.
A financial planner can apply for the Age Pension on your behalf
Can I get the Age Pension while living overseas?
Australia is an expensive country, so it's easy to see why many Australians reaching pension age or already receiving a pension may consider countries with cheaper living costs such as Thailand or Bali.
Once you receive the Age Pension in Australia, there is a two year waiting period before you can live overseas, though you can take holidays for up to six weeks at a time. If you were already in Australia and started receiving pension during this time, it is counted as part of the two years. The amount you'll receive depends on how long you'll stay overseas and how long you lived in Australia since being 16 years old.
Living overseas for greater than 26 weeks will see your pension reduced to an amount in proportion to the number of years you were an Australian resident once over the age of 16. If you've lived in Australia for greater than 25 years you'll receive the full amount.
If you've lived in Australia for less than 25 years you'll receive an amount in proportion to the years as a resident.
Remember too that countries like Austria, New Zealand, Canada, Chile, Greece, Italy and the USA have social security agreements which will in some cases continue your payments, so be sure to check on the Department of Human Services for more information regarding this.
Remember, those who are blind and have reached the minimum age for age pension, may not be required to fulfil any asset or income requirements in order to get the Age Pension.
Age Pension benefits at a glance
Recipients of the Age Pension receive different amounts depending on whether or not they’re single, a couple or a couple separated due to illness.
The payment rates are as follows:
| Status | Maximum basic rate per fortnight |
|---|---|
| Single | $797.90 |
| Couple | $601.50 each or $1,203 combined |
| Couple separated by illness | $797.90 |
Transaction accounts and the Age Pension
One of the ways to receive your Age Pension is directly to your bank account. This will involve the Department of Human Services paying your pension into what’s usually your transaction account. From here you can access your pension to pay for groceries, medical expenses and any other expenses you may have.
If you don’t yet have a transaction account and would like one to receive your Age Pension, or if you have one already and want to ensure it’ll provide you with the features you need when receiving the Age Pension, consider the following points:
What interest rate does it earn?
Most transaction accounts will earn little interest, but some have higher interest earning capabilities. Decide whether or not you want your transaction account to earn interest or you might also want to consider opening a savings account.
What are the monthly fees you’ll pay?
Some transaction accounts will charge a monthly fee which they’ll waive if enough money is deposited into the account each month. For most accounts, this threshold is $2,000, but be sure to check with any accounts you’re interested in. There are also accounts with no monthly fees whatsoever, regardless of the amount which is deposited into it.
How can I access my money?
Most transaction accounts can allow access through the internet and over the telephone, but some transaction accounts are offered by online providers, meaning they might not have large branch networks. If you like to do your banking in person, this might be an important consideration. If you regularly withdraw money from the ATM, you might want to ensure that the institution you have an account with has a number of ATMs near your home, so you can avoid fees.
You can compare a selection of transaction accounts below.
Pensioner loans
Regular mainstream loans aren’t necessarily available to pensioners. This is because lenders are concerned that a pensioner’s advanced age and increased likelihood of sickness and inability to work may mean they are unable to repay their debts.
There are still ways for pensioners to obtain loans for different purposes. These can include small loans of under $1200 through the No Interest Loans Scheme (NILS), low documentation loans and other options and are explained in more depth in our pensioner loans guide.
The Age pension is one resource older Australians can make use of when they retire. Finding out if you’re eligible for the pension is the first step to financially securing the beginning of your later years, so ensure you find out if you’re able to make use of the pension.
Do you have a question about eligibility for the aged pension?
If you have a specific question about your eligibility for the Aged Pension you will need to speak with the Australian Government Department of Human Services.
Here are some useful links:
