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 the your retirement journey and put you in control.
Since 1 July 2017, the minimum age for both men and women to qualify for the Age Pension began to increase. For men and women born on or after 1 July 1952 the pension age will reach 67 on 1 July 2023. 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 elligble 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 ends 31 December
From 4 November2022, the Work Bonus credit for those on an Age Pension was lifted to $11,800 from $7,800. Originally this extra amount was to expire on 30 June 2023, but as it took a while to shepherd the legislation through a crowded parliamentary schedule, the new expiry date for the extra amount is December 31, 2023.
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.