The amount of money would will get from the Age Pension depends on your circumstances but latest figures, updated in September 2021, show the maximum basic rate Age Pension is $882.20 a fortnight ($22,937.20 a year) for a single person and $1,330 a fortnight ($34,580 a year) for couples.
The Australian Bureau of Statistics says about 49% of retired men and 44% of retired women see a government pension as their main source of income.
There are ways you can earn more without losing any of that Age Pension, and some other benefits and concessions you can tap in to. It could be a wise idea to seek professional financial advice, or talk to any of the senior support groups that may exist in your neighbourhood.
Canstar asked some industry experts for their tips and here’s what they told us.
1 Set a budget
If you set a budget then you know how much you need to spend against what money you have coming in. Make sure you prioritise all the essentials such as food, regular bills and any mortgage or rental payments.
Ian Yates, chief executive officer of COTA, formerly known as the Council on the Ageing, told Canstar it was important people set a realistic budget for spending, and look for savings where possible.
“Look for cheaper products of the things that you buy regularly that may be just as good, such as generic brands,” he said.
If you have a credit card, it could be a wise idea to try to budget so you can pay off the balance each month. That way you may avoid paying any interest. There are credit cards with low or no fees and low interest. It could also be worth exploring other options with your banking products as there are several financial institutions that offer incentives to seniors.
2 Save for the unexpected
Life can be unpredictable so it could be a wise idea to try to save for those unexpected things that happen from time to time.
“Such as the water heater system blowing up,” Mr Yates said. “It won’t happen very often but if you don’t plan ahead for it, it could cause you trouble.”
Mr Yates urged retirees to avoid getting into unnecessary debt in such situations.
“If you do (get into debt), don’t borrow money,” he said. “Get a financial counsellor to help. They know how to talk to people you’ve borrowed money from and they can help you get out of trouble.”
Fiona Guthrie, chief executive officer of Financial Counselling Australia which oversees the National Debt Helpline, told Canstar it was important for anyone having trouble living on the Age Pension to seek help as early as possible.
“Money problems can happen to anyone,” she said.
“While you might be reluctant to talk to someone about your situation, the earlier you seek assistance the more options you’ll have, and remember that financial counselling is a free and non-judgemental service.”
3 Check for any other entitlements
As well as the Aged Pension, you may be eligible for other benefits, such as travel concessions, cheaper medicines, rental assistance, reduced council rates and water rates.
Every state and territory has its own Seniors Card which can help you save money either through discounts or concessions.
Each card has its own conditions and can usually be used for offers and discounts interstate when travelling, but check the details beforehand to make sure you know what is and isn’t available.
- Australian Capital Territory
- www.actseniorscard.org.au, ph: 02 6282 3777
- New South Wales
- www.seniorscard.nsw.gov.au, ph: 13 77 88
- Northern Territory
- ntseniorscard.org.au,ph: 1800 441 489
- www.qld.gov.au/seniorscard, ph: 13 74 68
- South Australia
- www.sa.gov.au/seniorscard, ph: 1800 819 961
- www.seniors.tas.gov.au, ph: 1300 135 513
- www.seniorsonline.vic.gov.au, ph: 1300 797 210
- Western Australia
- www.seniorscard.wa.gov.au, ph: 1800 671 233
National Seniors Australia, a not-for-profit organisation, has a useful Concessions Calculator that can help you see what may be available to you, depending on where you live.
National Seniors Chief Advocate, Ian Henschke, said the tool was useful at a time when many older Australians were under financial pressure.
Read more: What is a Pensioner Concession Card?
4 Take a part-time job
While on the Age Pension you can still earn extra income without your earnings having an impact on your pension payments. Under the Federal Government’s income test, a single person can earn up to $180 a fortnight ($4,680 a year), couples can earn a combined income of up to $320 a fortnight ($8,320 a year).
On top of that the government also has a Work Bonus scheme which allows you to earn even more income.
COTA’s Ian Yates said the scheme was designed to encourage people to stay in the workforce.
“People should think about that, and they might well find somewhere that’s looking for help, even if it’s only casual,” he said.
The scheme works automatically and $300 a fortnight is added to your Work Bonus balance, up to a maximum of $7,800 a year.
This is not money you can draw on, but it acts as an offset in the income test for any extra money you earn. That means you could potentially earn an extra $300 a fortnight, on top of the amount allowed for singles and couples, without impacting on your Age Pension.
That means a single person could potentially earn up to $480 a fortnight ($12,480 a year), couples an extra $620 a fortnight ($16,120 a year) and still receive the maximum Age Pension.
The catch is you have to actually do some work, you can’t use the bonus to offset any earnings from investments.
5 The free things in retired life
There are plenty of things you can access when you reach pension age that are free. Some things have always been free to everyone but you probably haven’t had the time to explore what’s available during a busy work life.
Your local council is a good place to start to see what services are available in your neighbourhood, so too is your local library which does what libraries do best – loan books free of charge.
“Maybe you’ve always bought books because you’re a busy person,” said Mr Yates. “But try the local library and see what’s on offer.”
Libraries also offer a range of other services too that you can access for free. Most offer some internet access where you can check out your local council website for other events and activities available for seniors.
6 Plan ahead before you retire
There are things you can do before you reach retirement age that can make things easier, and cheaper when living on the Age Pension.
“Think about things that will create efficiencies when you retire, such as installing solar panels, better insulation, replacing the old fridge with a more energy efficient one,” said Mr Yates.
“These things are best done when you have the resources.”
Cover image source: Robert Kneschke/Shutterstock.com