The Age Pension: Everything over 60s need to know
Navigating the complexities of retirement entitlements can be a daunting task, and dealing with social services can often lead to confusion and stress.
To help you navigate through the overwhelming process involved in receiving concessions, Starts at 60 have assembled a detailed breakdown of the Age Pension, including the eligibility and how to apply. We’ve also included information on the Commonwealth Seniors Health Card, an option often missed for those who aren’t eligible for the Age Pension.
As of March 2021, there are 2.6 million Australians receiving the Age Pension. Your eligibility for how much of the pension you can receive is assessed by factors such as age, residency, income, and assets. The rates also change depending on whether you are single or partnered.
Many Australians have expressed concern that the Age Pension will not exist by the time they retire, however, rest assured there are no real plans for this to come to fruition. The 2020 Federal Budget Retirement Income Review stated that despite the instability of the economy, “the Australian retirement income system is effective, sound and its costs are broadly sustainable.”
Understanding Age Pension rates & eligibility
The Age Pension eligibility age is currently 66 years and 6 months for those born from July 1, 1955, to December 31, 1956. If you’re born on or after January 1, 1957, the Age Pension will be available to you at 67 years of age.
The residency rules applied to the Age Pension state that if you’re not an Australian Citizen, you must have been an Australian resident for at least 10 years, with no break in your residency for at least five of those years.
When looking at the Age Pension rates, it’s important to note that the payments are not a single universal rate. The standard rate is regularly reviewed by the Department of Social Services, assessing the rates against the Consumer Price Index (CPI) to decide if an increase is needed. The current rates came into effect on September 20, 2022.
If you’re eligible for the Aged Pension, the maximum rates are as follows:
Totals per annum on maximum rate:
- Single: approximately $27,664
- Couple (each): approximately $20,852
- Couple (combined): approximately $41,704
- Couples separated due to illness: each receives the rate of a Single, approximately $55,328.
Important notes: For couples where only one person is eligible (for example only one is of pension age), the maximum pension rate available is $802.00 – half of the combined couples rate. The energy supplement is only available to pensioners of a certain age, and not at all to Commonwealth Seniors Health Card holders.
The income test
In order to determine how much of the Age Pension you’re eligible for, Services Australia looks into all forms of income, including superannuation, to make sure you don’t earn above a certain amount.
As of July 1, 2023, the government have raised the income threshold for the Aged Pension.
Singles can now earn a total of $204 a fortnight (roughly $5,304 per year) before their pension rate is affected. Anything over $204 will lead to your pension being reduced by 50 cents for each dollar over the limit.
Couples can earn a total of $360 a fortnight (about $9,360 per year) before the pension rate will be reduced by 50 cents for every dollar over.
Your Age Pension will be completely cut off if your earnings exceed the below amounts:
- Single: $2,332
- Couple (combined): $3,568
- Couples separated due to illness: $4,798 altogether
Services Austalia offers a work bonus on top of the Age Pension threshold, where pensioners are able to earn up to an extra $300 a fortnight per person from working. The work bonus is not included in the income test.
The assets test
The asset test involves an in-depth evaluation of anything you own in full, part or hold interest in that has monetary value, both held outside of Australia and including debts owed to you. The Department of Social Services evaluates the asset limits every January, March, July and September.
Assets include:
- Financial investments (including cash on hand, uncleared cheques, bank, building society and credit union accounts)
- Home contents, personal effects, vehicles and other personal assets (including furniture, jewellery and laptops and motor vehicles)
- Managed investments and superannuation (including life insurance and funeral bonds)
- Real estate
- Annuities, income streams and superannuation pensions
- Shares
- Gifting (selling or transferring an income or asset, you get less than its value or nothing in return)
- Sole traders, partnerships, private trusts and private companies
- Deceased estate
As of July 1, 2023, if you’re single, your assets are limited to a total of $301,750 if you’re a homeowner, or $543,750 if you don’t own your own home before penalties apply and your pension rate is reduced.
For couples, assets must be less than a combined total of $451,500 for homeowners, or $693,500 if you don’t own a home. This is the same for couples separated by illness and for couples where only one partner is eligible for the pension.
Services Australia will reduce the Age Pension by $3 for every $1000 over the asset limits.
How do I apply for the Age Pension?
Once you have checked you meet the age and residency eligibility requirements, the next step is to gather all your documents together. This includes documentation on:
- your age
- your bank account details
- your tax file number
- your Australian residence status, unless you’re an Australian citizen who was born in Australia
- if you’re a member of a couple
- your income and assets
The easiest way to claim the Age Pension is online. You will need a MyGov account linked to your Centrelink account to apply online. Once logged into the Centrelink portal through MyGov, select the Payments and Claims option, followed by Claims, and then Make a claim. Under the Older Australians category, select Get started and follow the steps to answer the questions.
Once your online claim is completed, MyGov allows you to track the progress and outcome of your claim.
If you’re unable to make an online claim, there are 3 other options:
- print and complete the Claim for Age Pension and Pension Bonus form and the Income and Assets form
- call the Older Australians line on 132 300
- make an appointment to visit a service centre
Important note: If you’re feeling overwhelmed by the thought of having to deal with Centrelink, Services Australia provides you with the option to nominate someone you trust to act on your behalf.
Commonwealth Seniors Health Card
Often overlooked, Services Australia offers Australians of Age Pension age, that aren’t eligible for the Age Pension, the chance to get discounts and more affordable health care through the Commonwealth Seniors Health Card (CSHC).
The CSHC benefits include:
- subsidised medicines listed under the Pharmaceutical Benefits Scheme (PBS)
- bulk-billed doctor visits (at your doctor’s discretion)
- a refund for medical costs when you reach the Medicare Safety Net.
- electricity and gas bills
- property and water rates
- health care costs, including ambulance, dental and eye care
- public transport fare
To be eligible for the CSHC, you must meet the Age Pension age requirement and residency requirement, meet the income test and identity requirements.
The income test
Part of the eligibility requirements for the CSHC is the income test, however, there is no asset test for this concession.
The types of income assessed include:
- taxable income
- target foreign income
- total net investment losses
- employer-provided benefits
- reportable superannuation contributions.
To qualify for the CSHC, you must not earn more than the below amounts:
- Single: $90,000
- Couple (combined): $144,000
- Couples separated due to illness, respite care or prison: $180,000 altogether
If there are children in your care, Services Australia allows for an extra $639.60 to these amounts for each child.
Account-based income streams are also included as part of the income test. This includes account-based pensions and account-based annuities. These income streams are subject to deeming, where financial investments are assumed to be earning a particular rate of income.
How do I apply for the Commonwealth Seniors Health Card?
Similar to the Age Pension, Services Australia suggests filing for the CSHC online, using your MyGov account.
Once you’ve set up your online account, you’ll need to prove your identity and provide documentation on your income. Once logged into the Centrelink portal through MyGov, select Make a claim, followed by Get started from the Concession Cards menu, selecting Commonwealth Seniors Health Card. Continue to follow the prompts and answer the questions.
You can check the status and outcome of your claim through the MyGov portal.
If you’re unable to claim online, Centrelink provides the option to claim by form or phone on the Older Australians line: 132 300.
For more information, visit the Services Australia website.
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