The three factors to consider when planning your retirement are: annual income; accumulated wealth; and retirement age – whether planned, unplanned (due to illness or redundancy) or determined by your Age Pension age.

According to ASFA – the peak policy, research and advocacy body for Australia’s superannuation industry – around 70 per cent of people aged more than 65 receive either a full or part Age Pension. Of those, around 60 per cent are currently on the full Age Pension.

If your life circumstances have resulted in limited wealth, it certainly does not mean that you must work forever. The Age Pension system is designed to complement what you have saved, or act as a safety net.

How it works

The Age Pension is a Government allowance paid to eligible Australians who have reached retirement age. It is managed by Centrelink, a division of the Commonwealth Government’s Department of Human Services.

The Age Pension is income and assets tested, which means the amount you are entitled to receive will depend on any other income you receive (from super, investments or paid work) and on the assets you own.

The test that results in the lowest Age Pension is the test that applies.


The qualifying age for the Age Pension is currently 66 and it will increase in stages to 67.

The current qualifying ages are:

1 July 1952 to 31 December 195365 years and 6 months
1 January 1954 to 30 June 195566 years
1 July 1955 to 31 December 195666 years and 6 months
From 1 January 195767 years

Age Pension rates

The current maximum fortnightly payment rates are as follows:

 Single personCouple living together
Total per fortnight$926.20$698.10 each
(or $24,081.20 pa)(or $36,301.20 pa combined)

Income limits

You can still receive a certain amount of income and receive an Age Pension. This income can be derived from superannuation pensions, investments, rental property or as a salary from employment – you don’t have to be retired to claim an Age Pension.

Centrelink income test (effective from 1 July 2019)

SituationFor full pension
(per fortnight)
For part pension
(per fortnight)
Singleup to $174
($4,524 pa)
less than $2,026.40
($52,686.40 pa)
Couple (combined)up to $308
($8,008 pa)
less than $3,100.40
($80,610.40 pa)

Asset limits

Asset test limits are used to determine whether you qualify for an Age Pension and if so, at which rate it will be paid. Your fortnightly Age Pension payment is reduced by $3 for every $1000 you exceed the asset limit. Once you exceed the limits for a part Age Pension, your Age Pension payment will cease.

Centrelink asset test (effective from 1 July 2019)

SingleFull Pension:$263,250$473,750
No Pension:$572,000$782,500
Couple (combined)Full Pension:$394,500$605,000
No Pension:$860,000$1,070,500

Example – Pension couple assets test

Paul and Linda are Age Pensioners who own their own home. They have combined assessable assets of $500,000.

Under the assets test, their Age Pension entitlement is:

Maximum amount of combined aged pension $1,396.20 pf

Asset test reduction: (($500,000 – $394,500)/$1,000) x $3.00 = $316.50 pf

Amount of entitlement $1,079.70 pf (or $28,072.20 pa)

Assuming Paul and Linda’s $500,000 is held via a superannuation account-based pension and they are drawing the minimum 5% per annum pension payment, their total annual income would be:

SituationIncome pa
Age Pension (combined)$28,072.20
Super account-based pension ($500,000 x 5%)$25,000.00
Total $53,072.20

Assuming Paul and Linda only had $200,000 held via a superannuation account-based pension and they are drawing the minimum 5% pa pension payment; their total annual income would be:

SituationIncome pa
Age Pension (combined)$36,301.20
(full entitlement)
Super account-based pension ($200,000 x 5%)$10,000.00
Total $46,301.20

Don’t have enough money to retire? You should still see a financial adviser.

The role of a financial adviser is to help you understand how the benefits you have accumulated will interact with Australia’s Age Pension system.

Goals Based Advice does not revolve around product sales; its sole focus is on you and what you want to achieve.

The right kind of financial advice can really make a big difference. It can help you:

  • Set your financial goals and achieve them
  • Make the most of your money
  • Get any government assistance you’re entitled to
  • Feel more in control of your finances and your life
  • Avoid expensive mistakes

Financial advice can give you confidence that your future plans are achievable.

If you’re not on track to achieving your goals, financial advice can help you put the right strategies in place or come up with more realistic goals.

At Advice SA we provide goal-based advice through discovery meetings that allow you to uncover your ‘blue sky’ dreams. Call us to find out what’s possible for you.

Mark Bastiaans is an Authorised Representative #296627 of Guideway Financial Services Pty Ltd ABN 46 156 498 538 AFSL 420367.

The information provided above contains general advice that does not take into account your financial situation, specific needs or objectives and is not intended to be personal financial advice and should not be relied upon without written advice from Guideway Financial Services Pty Ltd.