Understanding the age pension

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For many Australians, knowing when they want to retire and when they can afford to retire are two completely different thingsAnd for most people, their income in retirement will be made up of a mix of the Government Age Pension and their savings. 

But how do you know what Government benefits you might be entitled to, if anyAnd what happens if your circumstances changeNavigating the Age Pension process can be confusing and raise a lot of questions.  We’ve answered some commonly asked questions about the Age Pension, to help you understand the process. 

1. How do I know if I am eligible? 

To be eligible for the Age Pension you must be an Australian resident, have lived in Australia for at least 10 years and meet the minimum age requirement and applicable income and asset test thresholds.  

When applying for the Age Pension, you must meet the residence rules.  On the day you lodge your claim, you must be an Australian resident, living in Australia and physically be in Australia.  

Since 2017 the minimum age requirement for the Age Pension has been progressively increasing by 6 months every two years until 1 July 2023 when the pension age reached 67, as noted in the table below: 

 

If your birthday is 

Your pension age is 

Between 1 July 1952 to 31 December 1953  65 years and 6 months                             
Between 1 January 1954 to 30 June 1955  66 years 
Between 1 July 1955 to 31 December 1956  66 years and 6 months 
On or after 1 January 1957  67 years 

 

Both your income and assets are considered when assessing your eligibility for payment. The income test takes into account the income you earn and the income your investments are deemed to earn. Generally, the assets test measures the value of what you own, including most of your assets except your family home and the first two hectares of land it’s on.  

If your income or the value of your assets is above set limits, you may only be entitled to a reduced Age Pension payment, or potentially no payment at all.  As a couple in a relationship, it is important to note that the set limits that apply are for both you and your partner’s assets combined, not each of you individually. 

2. Can I get the Age Pension if I am still working?

Yes, you can, so long as you meet the eligibility requirements. The Australian Government is assisting older Australians to continue working while still being eligible to receive an Age Pension with the Work Bonus. 

The Work Bonus allows the first $300 of fortnightly income from work to not be assessed as income under the income test.  Any unused amounts are accrued in the Work Bonus Income Bank (Income Bank) up to a maximum amount of $7,800.  Generally, from 1 December 2022, you could be eligible to receive a one-off boost of $4,000 to your Work Bonus balance if you haven’t received one before.  From 1 December 2022, the maximum Work Bonus income bank balance was increased from $7,800 to $11,800.  This Income Bank balance can be used to offset future work income that would otherwise be assessable under the income test.  And the Income Bank amount is not time-limited, meaning it can carry forward across future years.

3. If I am eligible for the Age Pension, how much will I get?

How much you will receive will depend on whether you are single, a member of a couple, and on your living situation and the value of your income and assets.  If you are eligible for the Age Pension, you may also be eligible for other supplements and related benefits.

4. If I’m not eligible for the Age Pension, is there anything I can get?

If you reach the Age Pension age, but don’t meet all the eligibility requirements to receive a payment, you may still be eligible for a Commonwealth Seniors Health Card.  This is a concession card that provides you with cheaper health care and some discounts once you’ve reached Age Pension age.  

Each State and Territory also has its own concessions, grants and assistance available.  For more information, click on the link to each State and Territory resource included below: 

5. What happens if my circumstances change?

Change is an inevitable part of life, and it can have a big impact on your situation.  Some of the most common changes Age Pension recipients encounter are inheriting money, selling their home, or using funds to help family.  There are also legislative changes, such as age limit or income and asset limit changes, that may affect eligibility criteria.  These changes may have an impact on your payment. 

If your circumstances change while you are receiving the Government Age Pension, you must tell Centrelink within 14 days. This ensures your payment will remain correct and you won’t be overpaid by mistake.  Of course, if the change in your circumstances allows you to receive more pension, the earlier you notify the Government, the sooner your payment will increase. 

You can also re-apply for the Government Age Pension if your circumstances or the eligibility requirements change. There are no limits to how many times you can apply.  You will need to make sure all your details are up to date when you do, to make sure your application is assessed correctly.

6. Where can I go for more information?

The Services Australia website provides detailed information on the Age Pension, including who can get it, how much is payable and how you can claim. The website also has dedicated pages on the income and asset tests, deeming rules and how they apply, and the Commonwealth Seniors Health Card. 

If you would prefer to speak to someone directly, the Financial Information Service is a free service provided by the Australian Government.  Its purpose is to help educate and inform on financial matters, and the service can talk about more than just the Age Pension.  More information is available on their website or call them on 132 300 to discuss your situation directly. 

An exciting future in superannuation

This information is current as at 1 July 2024 and may be subject to change. You should not rely on this article to determine your personal tax obligations or other entitlements. 

Bendigo Superannuation Pty Ltd (ABN 23 644 620 128 AFSL 534006) (Bendigo Super) is the trustee and issuer of Bendigo SmartStart Super and Bendigo SmartStart Pension (Products).
Before making an investment decision in relation to the Super Products, read the relevant Product Disclosure Statement, available from this website (www.betashares.com.au/super/) or by calling 1800 033 426, and consider whether the product is right for you. You can find the Bendigo SmartStart Super Target Market Determination here and the Bendigo SmartStart Pension Target Market Determination here. This information is general in nature and doesn’t take into account any person’s financial objectives, situation or needs. You should consider its appropriateness taking into account such factors and seek professional financial advice. Past performance is not indicative of future performance.

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