The Age Pension and Your Investments: How They Interact in Australia

Who can receive the Age Pension

To be eligible you generally need to have reached Age Pension age, meet Australian residency rules, and pass both the income and assets tests. Age Pension age has been gradually increasing — confirm yours with Services Australia.

Two tests

Centrelink assesses Age Pension eligibility under both an income test and an assets test. The test that produces the lower payment is the one that applies.

Most financial assets — including super in pension phase and account-based pensions — are 'deemed' to earn a set rate for the income test, regardless of actual returns. The deeming rate is set by government and updated periodically.

Why structure matters

Two people with the same total wealth can receive different Age Pension amounts depending on how their money is held. For example, the family home is generally not counted under the assets test, while money sitting in a bank account is. downsizer contributions can interact with this — proceeds added to super count under the assets test even though the home itself did not.

This is why a conversation with a licensed financial adviser or a Services Australia Financial Information Service (FIS) officer — a free service — can be valuable before making large changes.

Other entitlements to ask about

Beyond the pension payment itself, recipients may be eligible for the Pensioner Concession Card, the Commonwealth Seniors Health Card, energy and rates concessions, and pharmaceutical benefits. Current eligibility is on Services Australia.

Putting it together

Understanding how the Age Pension interacts with your super and other investments is a core part of retirement planning. Our broader notes on retirement income options and superannuation in retirement explain how the pieces commonly fit together.

To receive a written overview at your own pace, you can request your information pack.

Common situations where structure changes the outcome

Selling an investment property. Money sitting in a bank account or term deposit is fully counted under the assets test and deemed under the income test, whereas the family home is generally exempt. Couples in this position often ask whether to use part of the proceeds for home improvements, contribute some to super, or hold it as accessible savings. Each choice has a different effect on Age Pension entitlement and on flexibility.

Inheriting a lump sum. An inheritance can shift you across an assets-test threshold quite quickly, particularly if you were close to one already. Services Australia must be notified of changes in assets, and a Financial Information Service (FIS) officer — a free service — can explain how the rules apply in general terms.

One partner reaching Age Pension age before the other. Until both partners reach pension age, the younger partner's super in accumulation phase is generally not counted. Once they reach pension age, it usually is. Planning ahead for that change often matters more than reacting after the fact.

None of these situations have a single 'best' answer. The right path depends on your goals, health, family situation and other resources — which is why personal advice can be valuable around any large change.

Reviewing your Age Pension situation each year

Rates, thresholds and deeming rules are updated by the government periodically — sometimes more than once a year. A short annual review is usually enough to keep your plan current. The review can be as simple as checking the latest figures on Services Australia, confirming your assets and income details with Centrelink are up to date, and noting any upcoming changes (such as a partner reaching pension age, downsizing, or expected inheritances).

Many recipients also review their entitlements after major life events — bereavement, separation, a significant change in health, or moving in with family. These events can change your homeowner status, your partnered status, or your assessable income, and therefore your payment.

Keeping copies of your latest Centrelink letters, super statements and bank balances in one folder — paper or digital — makes any review or advice meeting much faster.

Free help that is often underused

Two free services are worth knowing about. The Services Australia Financial Information Service (FIS) provides general information about how the Age Pension rules — including the income and assets tests, deeming and the Work Bonus — apply in different situations. FIS officers do not give personal financial advice, but they can explain how a decision would generally be treated under current rules. Appointments can usually be booked by phone or in person at a service centre.

Centrelink itself can also pre-assess a change before you make it. If you're considering selling a property, contributing to super, or starting an income stream, it is often worth asking how the change would affect your payment before the transaction settles, rather than after.

For broader retirement questions — tax, super, estate planning — these free services sit alongside, not in place of, personal advice from a licensed adviser. See choosing a licensed financial adviser for how to choose one.