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Knowing how much you’re likely to receive in Age Pension payments can help you make plans for your retirement – and an Age Pension calculator can be a useful tool to get started.
If the Age Pension is part of your retirement income plan, you’re not alone. Federal government figures show around 2.6 million people received the Age Pension in 2021, equal to more than three in five (62%) of the population aged 65 and over.
This highlights the valuable role the Age Pension can play in retirement. Some seniors may rely on the full Age Pension as their chief source of income. For others, a part-payment of the Age Pension can be a valuable supplement to other sources of retirement income such as superannuation.
How much Age Pension will I receive?
The Age Pension is adjusted twice yearly in line with cost of living increases. As at mid-2022, the basic Age Pension is worth $900.80 per fortnight for a single, or $1,358 for a couple combined. However, with additional supplements it can be worth a maximum of $987.60 fortnightly for a single, rising to $1,488.80 for a couple, according to Services Australia, the government agency which administers the Age Pension.
If you are not eligible for a full payment of the Age Pension, you could still be entitled to a part-payment. This not only acts as an income supplement, it can also see you entitled to various discounts through a Pensioner Concession Card, Services Australia says. This card can be used to access cheaper health care, medicine and other discounts that can include savings on council rates, train fares and motor vehicle registration.
| Normal Age Pension rates | ||||
|---|---|---|---|---|
| Per fortnight | Single | Couple each | Couple combined | Couple apart due to ill health |
| Maximum basic rate | $900.80 | $679.00 | $1358 | $900.80 |
| Maximum Pension Supplement | $72.70 | $54.80 | $109.60 | $72.70 |
| Energy Supplement | $14.10 | $10.60 | $21.20 | $14.10 |
| Total | $987.60 | $744.40 | $1488.80 | $987.60 |
Source: Services Australia, June 2022
How is the age pension calculated?
Eligibility for the Age Pension depends on several factors. Age is a key factor, as you might expect. On 1 July 2021, the minimum Age Pension age increased to 66 years and 6 months for anyone born between 1 July 1955 and 31 December 1956.
If you were born on or after 1 January 1957, you’ll have to wait until you turn age 67 to apply for the Age Pension. According to Services Australia, this will be the Age Pension age that applies from 1 July 2023 onwards.
If you’re unsure, the Moneysmart website features a pension age calculator that shows how old you need to be before you can apply for the Age Pension.
Residence rules also apply. You usually need to have been an Australian resident for at least 10 years to be eligible for the Age Pension, according to Services Australia.
Along with your age and residency status, Age Pension eligibility is chiefly based on the assets you own and the income you earn. This means anyone applying for the Age Pension, either as a single or as part of a couple, is allowed to earn a certain amount of income – or own assets up to a particular value, before their Age Pension entitlements reduce or are eliminated altogether.
Let’s take a closer look at these tests.
The Age Pension income test
The Age Pension income test looks at how much you earn from a variety of sources including investments.
Broadly speaking, as at mid-2022, a single can earn up to $180 per fortnight before their Age Pension eligibility is impacted. Once you earn more than $180 per fortnight, your Age Pension payments will reduce by 50 cents for every $1 earned over $180.
If you are part of a couple, you can generally earn a combined income of up to $320 per fortnight and still be eligible for the full Age Pension. Income earned above this level will see your Age Pension payments reduce at a rate of 50 cents for every $1 extra earned over the $320 fortnightly threshold.
The Age Pension assets test
Under the Age Pension assets test, Services Australia says it looks at a wide variety of assets, including financial assets such as bank deposits and superannuation savings, and even personal assets such as home contents and vehicles, as well as business interests.
The value of the assets you can own to be eligible for the Age Pension depends on whether or not you are a homeowner. As the table below shows, a single person who owns their home, can own up to $270,500 worth of assets and still be eligible for the Age Pension (notwithstanding the Income Test). A single who doesn’t own their home can own up to $487,000 worth of assets to be eligible for the Age Pension.
| Age Pension assets test – full pension, as at June 2022 | ||
|---|---|---|
| Your situation | Homeowner | Non-homeowner |
| Single | $270,500 | $487,000 |
| A couple, combined | $405,000 | $621,500 |
| A couple, separated due to illness, combined | $405,000 | $621,500 |
| A couple, one partner eligible, combined | $405,000 | $621,500 |
Source: Services Australia, June 2022
Claiming the Age Pension
Services Australia assesses Age Pension entitlements by applying both the income and assets tests, and then pays the lesser amount of Age Pension based on the outcomes of the two tests.
To claim the Age Pension, you will need to provide a variety of documents to Services Australia. These include your Tax File Number, details of your bank account, and information regarding your income and assets. You will also need to have a myGov account in place as this will be linked to your Centrelink account.
Several options are available to lodge your claim for the Age Pension. You can choose to make a claim via the Services Australia website, or print off an application form and submit the completed paperwork to Services Australia. Alternatively, you can make a claim in person by visiting a Services Australia office. You can find your nearest Services Australia office here. You can also call Services Australia on 132 300 to ask for help.
You don’t have to wait until you reach Age Pension age to lodge a claim. Services Australia advises that you can apply up to 13 weeks before you turn the appropriate age to be eligible for the Age Pension.
Age Pension Calculator
The Age Pension eligibility system can seem complex. Given the intricacies of the system, the best way to know how much you are entitled to is to speak with someone at Services Australia, who can provide an exact figure tailored to your situation.
That said, when you are planning for retirement it can be helpful to know in advance if you may be eligible for a full Age Pension – or even just a part-pension, to shape your future plans.
A number of companies provide fee-based support to help seniors apply for the Age Pension, and some feature Age Pension calculators on their websites. For example you can find an Age Pension calculator at Retirement Essentials, Your Pension and Age Pension Guide.
While these calculators may be useful, it is important to bear in mind that Age Pension calculators should be seen only as a guide. The figures they show for your Age Pension entitlements (if any) are an estimate, and may not match the Age Pension payments that Services Australia decides you are eligible for.
Nonetheless, an Age Pension calculator can give you a starting point to develop a retirement living budget, or make plans for how you will use your assets to maximise your retirement income when you reach Age Pension age.
Cover image source: Dmytro Zinkevych/Shutterstock.com.
This content was reviewed by Sub Editor Tom Letts as part of our fact-checking process.
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