Age Pension age set to change

The Age Pension eligibility age will increase to 67 from 1 July. It is 65.5 years if you were
born between 1 July 1952 and 31 December 1953; 66 if you were born between 1 January
1954 and 30 June 1955, and 66.5 years if you were born between 1 July 1955 and 31
December 1956. From 1 July 2023, it will be 67 if you were born on or after 1 January 1957.

Age Pension thresholds to change

On 1 July 2023, the assets and income test thresholds for the Age Pension and other
government benefits will be altered.

Asset and income disqualifying limits were lifted on 20 March, along with pension payment
rates. The Age Pension currently cuts out when assets reach $634,750 for a single
homeowner, and $859,250 for a non-homeowner, and at $954,000 for couple combined
homeowners and $1,178,000 for non-homeowner couples.

Income disqualifying limits are $2318 per fortnight for a single, $3544 per fortnight for a
couple combined and $4592 per fortnight for an illness-separated couple combined.

If you didn’t qualify for a pension before 20 March, or were on a reduced rate due to your
income or assets, it’s worth re-examining your financial position to see if you qualify.

Change to superannuation drawdown rates

The freeze on minimum super drawdown rates will end on 1 July.

If you have a super income stream, there are rules on the minimum amount you can withdraw
(or draw down) each financial year. Normally, this amount goes up slightly each year.

Due to COVID, the government temporarily reduced the superannuation minimum

drawdown rates, which allowed retirees to keep more money in super.

Your minimum drawdown rate depends on your age. See all the details on the ATO website.

Super guarantee set to increase

The super guarantee rate goes up in July.

On 1 July 2022, the rate of super paid by employers to employees increased to 10.5 per cent
of the employee’s salary. From 1 July, this will increase again, and all employers must pay all
employees entitled to super 11 per cent of their salary.

To make sure you’re being paid all the super you’re entitled to, log in to your fund’s website
and check your account. Report any unpaid super here.

‘Bring forward’ super rule

Since the start of the 2023 financial year, those aged 67 to 74 can make use of the ‘bring
forward’ non-concessional contributions rule. This option was previously only available to
those aged 67 or younger.

A bring forward non-concessional contribution can be useful if you receive a windfall, such
as from the sale of a house or an inheritance

The rule allows you to make three years’ worth of non-concessional contributions to your
super in a single year without going over the cap.

General transfer balance cap

The general transfer balance cap, which dictates the maximum amount that can be moved
into a tax-free retirement phase account from super will rise from its current level of $1.7
million to $1.9 million from July.

Medicines on the PBS

Eligibility for the COVID antiviral drug Paxlovid (nirmatrelvir and ritonavir tablets) on the
Pharmaceutical Benefits Scheme (PBS) expanded on 1 April. It now includes people aged 60
to 69 with mild to moderate COVID with one additional risk factor for developing severe
disease as well as people aged 50 or older, with two additional risk factors. People aged 70
and older were already eligible.

Paxlovid is a prescription only oral medicine taken twice daily for five days and within five
days of COVID symptoms appearing.

Age care reforms

From 1 July 2023, the Aged Care Quality and Safety Commission decreed that approved
providers must have at least one registered nurse onsite and on duty 24 hours a day, seven
days a week, at each residential facility. Check the reforms here.

Also, from 1 April, the aged care interest rate rose for a sixth consecutive month, to 7.46 per
cent. Read more here.

One for the diary

From 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4000 applies
to Work Bonus income bank balances. The maximum income bank balance increased to
$11,800 over this period. On 1 January 2024, the maximum income bank balance will
automatically reset to $7800.
In case you missed it
Removing the superannuation ‘work test’. Up until 1 July 2022, Australians aged 67 to 74
could only make voluntary contributions to their super if they’d worked at least 40 hours
during a 30-day period in the relevant financial year. Go here for more details.

Downsizer contribution. As of 1 January 2023, you’re now eligible to make a downsizer

contribution if you’re 55. Previously, the eligibility age was 60 (and before that, 65). See
details on the ATO website here. The downsizer contribution is a government initiative that
lets you contribute up to $300,000 as an individual or $600,000 as a couple to your super
from the proceeds of selling your property. You can do this even when the usual contribution
rules mean you wouldn’t normally be eligible to add to your super.

Home Equity Access Scheme. The scheme allows senior Australians to supplement their
retirement income by accessing the equity in their home through a government loan. The
compound interest rate for the scheme is currently 3.95 per cent per annum. Changes from 1
July 2022 enabled participants to bring forward a portion of their fortnightly loan payments
as a lump sum advance. Lump sum advances are capped at 50 per cent of the annual Age
Pension rate. For more details, check the Department of Social Services website here.

Do you find it easy to stay up to date with changes that might affect your retirement or
retirement planning? Do you have any tips for other members?
How the Age Pension works
Not everyone will be eligible for an Age Pension. Services Australia (or Centrelink), applies
strict eligibility criteria, including residency period, age qualification and an assessment of
income and assets.

To qualify for the Age Pension, you must have reached Age Pension age. This is currently 66
years and 6 months. And you must satisfy Australian residency rules and the income and
assets test.

Whether you’ll receive a full or part Age Pension will depend on these requirements.

How much Age Pension will you receive?

In line with indexation, Age Pension payment rates increase twice-yearly. Between 20 March
2023 and 19 September 2023, the following fortnightly Age Pension payment rates apply.

The full Age Pension increase is $34.70 per fortnight for a single person, and $28.50 per
person per fortnight for a couple. See below for maximum Age Pension payment rates
(including supplements):

Situation Amount (per fortnight) Annual amount*

Single $1064.00 $27,740

Couple (each) $802.00 $20,909

Couple (combined) $1604.00 $41,818

Couples separated due to illness $2128.00 $55,480

Source: Services Australia. Applicable 20 March 2023 to 19 September 2023

Age Pension payment rates for singles

Single Previous Current Increase

Base $936.80 $971.50 $34.70

Supplement $75.60 $78.40 $2.80

Energy Supplement $14.10 $14.10 –

Total $1026.50 $1064.00 $37.50

Source: Services Australia. Applicable 20 <="" i="">

Age Pension payment rates for a couple (living together)
Couple (each) Previous Current Increase

Base $706.20 $732.30 $26.10

Supplement $57.00 $59.10 $2.10

Energy Supplement $10.60 $10.60 –

Total $773.80 $802.00 $28.20

Source: Services Australia. Applicable 20 March 2023 to 19 September 2023

*Annual amounts are approximate.

Try this Age Pension calculator to estimate your Age Pension entitlements.

Income and Assets Test

Assets test overview

To qualify for a full-Age Pension, a single homeowner must have assets valued below
$280,000 if they own their home. Singles who don’t own their home can have assets valued
at up to $504,500.*

Single homeowners may still be eligible for a part Age Pension if their assets are worth less
than $634,750. Singles who do not own their home can have assets valued up to $859,250.**

Couples who own their home and have combined assets below $419,000 may qualify for
the full Age Pension. Couples who do not own their home can have assets valued at up to
$643,500.

You can still be eligible for a part Age Pension if your assets are worth less than $954,000 if
you own your home, or $1,178,500 if you don’t own your own home.**

Assets include:

 Home contents, personal effects, vehicles and other personal assets (eg: furniture, jewellery,
laptops, computers and motor vehicles)
 Financial investments (eg: cash, cheques, bank, building society and credit union accounts)
 Managed investments and super (eg: life insurance, funeral bonds)
 Shares
 Real estate and property (other than primary residence)
 Annuities, income streams and superannuation pensions
  Gifts (transferring an income or asset)
 Sole traders, partnerships, private trusts and private companies
 Deceased estate

Income test overview

For a single person to be eligible for a full Age Pension, your income must be below $190
per fortnight ($4940 per year).

You may still qualify for a part Age Pension if you earn less than $2318 per fortnight
($60,433 per year).

Couples with a combined income below $336 per fortnight ($8736 per year) qualify for the
full Age Pension.

Those who earn less than $3544 per fortnight ($92,397 per year) may be eligible for a part
Age Pension.

Would you like to know more about the income test and assets test?

* Limits  apply 1 July 2022 to 30 June 2023

**Limits  apply 20 March 2023 to 19 September 2023

Which test decides how much Age Pension you will receive?

If you are over the threshold limits for a full Age Pension in either the assets or income tests
(or both), your Age Pension will be based on the test that delivers the lower pension payout.

That means if you were to receive $300 per fortnight based on your assets test, or $450 per
fortnight based on the income test, then you will receive a fortnightly payment of $300.

Work Bonus
Under the work bonus, you can earn up to $300 per fortnight from employment income. This
amount is not included in the Age Pension income test.

Pensioners can typically earn a maximum of $7800 per year without the extra income
effecting their pension.

The federal government will change the pension work test and increase the amount age
pensioners and veterans can earn before being financially penalised.

As a temporary measure introduced in September 2022, age pensioners will be able to earn an
extra $4000 this financial year. They can now earn a maximum income of $11,800 before
penalties kick in.

This measure is set to end 30 June 2023.

UPDATED: Older Australians will be able to work more without impacting their Age
Pension payments, potentially meaning more money in their pockets.

On 1 December 2022, eligible age pensioners had $4000 credited to their Work Bonus
Income Bank balance, taking their maximum work bonus balance from $7800 to $11,800.

Pensioners will have until 31 December 2023 – after the measure was initially put in place
only until the end of this financial year – to make use of this balance to offset employment
income.

What if only one member of a couple is eligible?

Couples with only one partner of pension age often ask if they will receive the single rate or
half of the combined couple rate.

These couples will be assessed as a couple and, if eligible, will receive half the combined
couple rate.

How does that work?

Say you are aged 66 years and 6 months, meet all Age Pension requirements and are eligible
for the maximum Age Pension, but your partner is not yet of pension age.

You would be entitled to the maximum Age Pension of $732.30 for each eligible person in a
couple and the maximum pension supplement of $59.10. However, you would not get the
energy supplement.

You’ll be paid a pension supplement and you’ll receive the maximum rate if you’re eligible
to receive the full pension.

However, if you only qualify for a part pension, your pension supplement will be reduced
until it reaches the minimum amount.

What is the Pension Supplement?

The Pension Supplement is an extra payment to help with utility, phone, internet and
medicine costs. The payment is made fortnightly to those who qualify. You can also have the
Pension Supplement paid quarterly rather than fortnightly.

Here are the Pension Supplement amounts per fortnight for single and couple part pensioners.

Situation Minimum supplement Maximum supplement

Single $42.20 $83.50

$31.80 each ($63.60 $64.80 each (or $129.60

Couple living together
combined) combined)

Couple separated due to illness, respite $42.20 each (or $84.40 $80 each (or $160 combined)
or prison combined)

Source: Services Australia.

What about the Energy Supplement?

Unlike the Age Pension Supplement, the Energy Supplement is available only to those who
have a Commonwealth Seniors Health Card (CSHC) issued before 19 September 2016.

Whether you’re on a full or part Age Pension, you’ll receive the same Energy Supplement
payment.

Situation Supplement (per fortnight)

Single, including illness separated, respite care or partner in prison $14.10

Partnered $10.60

Source: Services Australia.

When is the next Age Pension increase?

The Age Pension rates are indexed each year on 20 March and 20 September.

Increases are likely but not certain. Payments are indexed by the greater of the movement in
the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index
(PBLCI).

They are then benchmarked against a percentage of Male Total Average Weekly Earnings
(MTAWE).

The combined couple rate is benchmarked to 41.76 per cent of MTAWE. The single rate of
pension is set at 66.33 per cent of the combined couple rate (which is equal to around 27.7
per cent of MTAWE).

‘Benchmarked’ means that after it has been indexed, the combined couple rate is checked to
see whether it is equal to or higher than 41.76 per cent of MTAWE.

If the rate is lower than this percentage, the rates are increased to the relevant benchmark
level.

Learn more about how Age Pension calculations work.

How often is the Age Pension paid?

Age Pensions are paid fortnightly. However, homeless people, or people at risk of being
homeless, and anyone having trouble managing money may be able to arrange weekly
payments.
Advance Age Pension payments
If you’ve been on the Age Pension for at least three months, you can apply to get one to three
advance payments. If approved, in any six-month period you’re entitled to the following
amounts if you’re on a full pension:

Lowest amount (you Highest amount (you

Situation
can receive three of these amounts) can receive one payment of this amount)

Single $485.85 $1457.55

Couple $366.25 $1098.75

Source: Services Australia. Accurate from 1 July 2022.

Part age-pensioners may receive proportionally adjusted amounts.

Adjusted payouts from future entitlements will be used to repay advance payments.

Can you also get Rent Assistance?

Pensioners may also be entitled to Rent Assistance (including fees you may be paying at a
retirement village, so long as the Australian government isn’t already subsidising your
facility).

To qualify, you must be paying a minimum rent amount. This is adjusted annually in March
and September (shown below). If you pay more than these amounts, you’re entitled to 75
cents of Rent Assistance for every dollar you pay over the threshold, up to the maximum
amount.

Maximum fortnightly
Situation Minimum fortnightly rent to qualify for assistance
rent assistance payment

Single $140.40 $157.20

Couple (combined) $227.40 $296.00

Source: Services Australia.

Transitional Age Pension rates

Transitional pension rates are paid to people who would otherwise be getting a lower
payment after changes to the income test were introduced in 2009.

Situation Amount paid per Annual payment Increase per

 fortnight (approximate) fortnight

Single $887.60 $23,141 $31.20

Couple (each) $716.10 $18,669 $25.20

Couple (combined) $1432.20 $37,339 $50.40

Couples separated due to

$1712.80 each $44,539 $64.80
illness

Source: Services Australia.

Transitional pensioners are not eligible for the Pension Supplement but may get the Energy
Supplement if they have a CSHC issued prior to 19 September 2016.

How is the transitional Age Pension broken down?

Single Amount Increase

Maximum transitional pension rate $873.50 $31.20

Energy Supplement $14.10 –

Total (per fortnight) $887.60 $31.20

Source: Services Australia.

Couple (living together) Amount each Increase Amount combined Increase

Maximum transitional pension rate $705.50 $25.20 $1411 $50.40

Energy Supplement $10.60 – $21.20 –

Total (per fortnight) $176.10 $25.20 $1411 $50.40

Source: Services Australia.

Age Pension rates for non-residents

Those living outside Australia who qualify for the Age Pension receive the following
payments:

Amount paid per Annual payment Increase per

Situation
fortnight (approximate) fortnight
Single $801 $20,883 $28.60

Couple (each) $669.50 $16,976 $23.90

Couple (combined) $1339 $34,909 $47.80

Couples separated due to

$1602 each $41,766 $57.20
illness

Source: Services Australia.