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 -
|March 2020||Single person||Couple living together||Couple separated due to ill health|
|Maximum basic rate||$860.60||$648.70 each||$860.60 each|
|Maximum pension supplement||$69.60||$52.50 each||$69.60 each|
|Energy supplement||$14.10||$10.60 each||$14.10 each|
|Total per fortnight||$944.30||$711.80 each||$944.30 each|
Will Australian Pensioners get a rise in 2020/2021?
The age pension is adjusted to keep up with inflation and generally increases every six months on March 20th and Sept 20th. As inflation approaches zero it is possible that the pension might not increase every time on these dates and any increases are likely to be small.
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 into 2020/2021.
|Deeming rates 2020/2021||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
Also in its response to the coronavirus, 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 to both the 2019/20 and 2020/21 financial years.
|Age||2019/20 and 2020/21||2021/22 onwards|
|95 or more||7%||14%|
Removal of the Work Test requirement
Prior to 1 July 2020, retirees aged 65 and 66 who still have a super account and want to contribute to their super, had to meet the Work Test. This required them to show they’d been in paid work for at least 40 hours over a period of 30 consecutive days. The Federal Government removed this requirement from the start of the 2020/21 financial year.
Increase to the age limit on spouse contributions
On 1 July 2020, the age limit for receiving spouse contributions to super rose from 69 years to 74 years. This means that a person can now keep making voluntary payments to their partner’s super until their partner turns 74 years of age.