The Australian Age Pension Explained
The Australian Age Pension is one of the more complex and more generous pension systems in the world. Consequently it can be hard to understand. But we are here to help guide you along your retirement journey and put you in control.
The minimum age for both men and women to qualify for the Age Pension is 67. No further age increases are currently legislated.
Because the Age Pension provides core funding for about seven out of ten Australian retirees and at least some income to eight in ever ten people over the age of 65 it is relevant and important to all of us.
Even if you aren’t eligble today, it’s highly likely that you will become eligible for at least some pension payment at some point during your retirement. Keep that in mind as you consider your retirement spending plans.
All too Confusing?
Our goal is to put you in control, which is why we provide so much information for you. But sometimes it’s helpful to speak to an expert. We know becasue we speak with thousands of people just like you every year.
If you have questions, why not book a 3o minute consultation now. At a cost of only $75 it will be worth the peace of mind alone!
Purpose
The stated intention of this entitlement, according to the responsible department, the Department of Social Services, is to to support the basic living standards of older Australians who meet age and residency requirements.
Yet many of those who receive a pension can find it difficult to keep up with frequent annual changes to rates and entitlements, whilst the timing of these changes can also seem unexpected. Additionally, those who miss out on an Age Pension are sometimes left in the dark as to why.
Is it fair?
There is lots of debate about the fairness of the system. Common issues include:
- Coverage
- Complexity
- Delivery
- Couples versus singles
- Homeowners v. renters
- Means testing
And the list goes on. You can read more about the issues and and the comments from readers just like you in our “Is the Age Pension fair?” eNews article.
Name
The Australian Age Pension is often called the “Australian aged pension” or “aged pension”. However it’s correct name is the “Age Pension”
Eligibility
Once you reach your eligibility age, there are a number of additional eligibiliy tests that are performed in order to determine if you are qualify for the age pension:
- Income Test
- Asset Test
- Residency Test
Read more about Age Pension Elligibiliy
Payments
Payments are made fortnightly direct into your bank account. The amount is determined by the means test and the regularly updated payment rates.
Age pension and other government benefits
Work Bonus
From 1 January 2024, all new pensioners over Age Pension age and eligible veterans will receive a $4,000 starting balance in their Work Bonus income bank. The maximum income bank balance for all eligible Age Pensioners will also be permanently increased to $11,800.
Centrelink will continue to use your Work Bonus to reduce your eligible income by $300.
Changes
The Australian Government updates the age pension payment rates, income tests and asset tests three times every year. Use our eligibility checker to make sure you are getting all your entitlements.