How Centrelink calculates the Age Pension

Knowing how Centrelink calculates the Age Pension will help you to understand the questions they ask and why they need the information. Centrelink determines your Age Pension entitlement by assessing your income and your assets independently, which is referred to as the Means Tests. The Means Tests are there to ensure the Age Pension is targeted to those who need it most. Currently around 7 in every 10 people over the age of 65 receive some level of age pension.

Under the income test, how much income can I earn before I start to lose my pension entitlement?


Your pension amount starts reducing by $0.50 for every $1 your income exceeds these amounts and does not include the work bonus.

Centrelink assesses the income you generate anywhere in the world from:

  • Employment, including part time, casual or seasonal work
  • Rental property income
  • Business incomes or profits
  • Pensions or social security style benefits from other authorities

However, Centrelink does NOT assess the income you actually receive on your financial assets (e.g. bank accounts, shares, bonds, loans, superannuation, etc). To make the assessment process simpler Centrelink ‘deems’ (calculates) the income they include in the Income Test from your financial assets. The current deeming rates are 0.25% on your financial assets up to $53,600 (Singles) or $89,000 (Couples) and 2.25% on your financial assets over these thresholds.

IMPORTANT NOTE: all information is accurate from September 2021.


Under the assets test, how much in assets can I have before I start to lose my pension entitlement?

Full Age Pension Rates

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