You’ve worked hard all your life and you’ve grown your super into a nice nest egg.

Now you’re thinking about converting it to an Account-Based Pension or maybe you already have, but you’re wondering how this will impact your age pension application?

In order to be successful in your age pension application, you’ll need to pass Centrelink’s Income Test and their Asset Test.

Many Australian seniors are unsure how Centrelink will assess their Account-Based Pension – is it an asset or income?

The answer is that the balance of your Account-Based Pension is counted as an asset under the asset test. The balance will also be deemed under the income test. The test that results in the lowest Age Pension being paid to you is the one that Centrelink will apply.

Understanding the eligibility criteria, and the different rules can get confusing. There is an easier way, if you make your age pension application with Retirement Essentials, you don’t need to worry about this stuff. We look after it all for you!

However, if you are someone that does like to know the details, then keep going because this example might really help.

Tim’s Story:

Tim recently retired and has already converted his super to an income stream. He called Retirement Essentials to find out how his Account Based Pension would be assessed by Centrelink.

His Super account balance is $440,000 and he is receiving an income stream of $22,000 per year.

In Tim’s case the balance of his Super account ($440k) is asset tested and the return on this financial asset, which is called deemed income, is income tested. 

The deemed income from his Super balance is calculated as follows:

1% on his first $51,800 (Tim is single)


3% on the amount over $51,800


Total Deemed Income (included in Income Test)


For more information about Deeming rates click here.

Just when you think you have it figured out you realise that with Centrelink there are always exceptions to the rules. And of course, Centrelink’s treatment of Account Based Pensions has an exception. Take note, if you started your Account-Based Pension before 1 January 2015, and were already receiving a Centrelink pension or allowance, then only part of your pension income will be assessed under the income test. If you commenced your pension on or after 1 January 2015 then the whole balance will be deemed for income test purposes.

If you want a helping hand to better understand your Age Pension entitlement, give us a call on 1300 527 727 to speak with one of our Age Pension Specialists. Retirement Essentials offers an easier way to get and keep your Age Pension.