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 2023||Single person||Couple living together||Couple separated due to ill health|
|Maximum basic rate||$1,002.50||$732.30 each||$1,002.50 each|
|Maximum pension supplement||$80.10||$59.10 each||$80.10 each|
|Energy supplement||$14.10||$10.60 each||$14.10 each|
|Total per fortnight||$1,096.70||$802.00 each||$1,096.70 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 $7,800 to $11,800 between 1 December 2022 and 31 December 2023.
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 you can make non-concessional or salary sacrifice contributions, provided your super balance is less than $1.9 million in July of that financial year. 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. These rates will remain until 30 June 2024
Deeming rate asset thresholds are the amount above which the upper rate is applied. The current deeming asset threshold rates are outlined below.
|Deeming rates 2023/2024||Single||Couple (combined)|
|0.25%||Up to $56,400||Up to $93,600|
|2.25%||Above $56,400||Above $93,600|
The higher rate only applies to the amount of assets above the threshold.
Super income stream minimum withdrawal reduction has ended
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 in the 2019/20, 2020/21, 2021/22 and 2022/23 financial years. Minimum withdrawal rates have now returned to pre-pandemic levels.
|Age||2023/24 onwards||2019/20, 2020/21, 2021/22 and 2022/23|
|95 or more||14%||7%|
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.