Australian age pension
Australian Age Pension
A number of changes affecting the age pension occur either annually or more frequently. These changes include:
- The government age pension usually increases in March and again in September
- Thresholds for income and assets test are indexed in March, July and September
- Super income stream minimum drawdowns are reviewed every July
- Deeming rates and thresholds are reviewed every July
Depending on economic circumstances, adjustments may also be made at other times.
Age pension rate changes
Each year, the Commonwealth Government reviews the age pension rates for those who have reached retirement age. The current maximum fortnightly payments are:
|From 20 September 2022||Single person||Couple living together||Couple separated due to ill health|
|Maximum basic rate||$936.80||$706.20 each||$936.80 each|
|Maximum pension supplement||$75.60||$57.00 each||$75.60 each|
|Energy supplement||$14.10||$10.60 each||$14.10 each|
|Total per fortnight||$1,026.50||$773.80 each||$1,026.50 each|
Age Pensioners will be able to earn an additional $4,000 this financial year without losing any of their pension. The Government announced the measure (which is subject to the passage of legislation) following the national jobs summit to encourage older Australians to work a bit more if they want to, to assist in solving Australia’s significant labour shortage.
The temporary income bank top up will increase the amount pensioners can earn from $7800 to $11,800 this financial year, and can be used from December.
Changing the work test for older Australians
The work test was changed on 1 July 2022. Under the change if you are under 75 years of age during the financial year 2022-23 you can make non-concessional or salary sacrifice contributions, provided your super balance is less than $1.7 million in July 2022. The work test continues to apply if you wish to claim personal super contribution deductions.
Deeming rates changes
As part of its response to the economic impacts of the COVID-19 pandemic, the Federal Government announced a reduction to the upper and lower deeming rates used by Centrelink for estimating pensioner incomes.
There was also an increase to the asset thresholds above which the upper rate is applied. The rates below came into effect on 1 May 2020 and remain current in 2022/2023.
|Deeming rates 2022/2023||Single||Couple (combined)|
|0.25%||Up to $53,000||Up to $88,000|
|2.25%||Above $53,000||Above $88,000|
The higher rate only applies to the amount of assets above the threshold.
Super income stream minimum withdrawal reduced
Also in its response to the coronavirus pandemic, the Australian Government temporarily reduced the minimum amount that a retiree must withdraw as a pension from their super each year. The new minimum drawdown rates apply in the 2019/20, 2020/21, 2021/22 and 2022/23 financial years.
|Age||2019/20, 2020/21, 2021/22 and 2022/23||2023/24 onwards|
|95 or more||7%||14%|
Increase to the age limit on spouse contributions
As of 1 July 2022 contributions can be made on behalf of a spouse until 28 days after the end of month the spouse turns 75. The contributor must also be under 75 years of age. The work test applies to contributions for ages 67-75 to claim a personal tax deduction.