This article provides general information only. It is not financial or legal advice. Age Pension eligibility and payment rates depend on individual circumstances. All figures are sourced from Services Australia and reflect rates current from 20 March 2026. Hometown Australia does not hold an Australian Financial Services Licence.
Age Pension payment rates are assessed under both the income test and the assets test. Services Australia applies both tests and uses the one that produces the lower rate of payment. Changes to your income, assets, living arrangements or relationship status can affect the result under either test.
Thresholds and rates are indexed regularly, so figures in this article may change over time
The Age Pension is a core part of retirement planning for most Australians. But your eligibility and payment amount aren't automatic. They're determined by two separate assessments: the income test and the assets test. Centrelink applies both, and whichever test produces the lower payment is the one that decides what you actually receive.
Getting across both tests matters because a change in one area, such as selling a property or drawing down on super, can shift your results under both. If you're over 50 and thinking about downsizing or planning for retirement, a solid understanding of these thresholds gives you a much clearer picture of your entitlements.
Thresholds and rates are indexed regularly, so always confirm the latest figures with Services Australia or Centrelink before making financial decisions.
The Age Pension income test
According to Services Australia, the income test assesses how much you earn from all sources. If you have a partner, their income is assessed too. Centrelink uses financial assets such as savings, shares and superannuation to calculate deemed income. Three possible outcomes exist: you qualify for the full pension, a part pension, or no pension at all if your income exceeds the cut-off point.
What counts as income
Centrelink's definition of income is broad. The types of income that are assessed include:
• Employment income, including wages from casual or part-time work
• Self-employment or business income
• Rental income from investment properties
• Overseas income or pensions
• Income from financial investments (assessed through deeming)
• Certain regular payments such as superannuation income streams
Deeming is a separate set of rules used to work out income from financial assets. Rather than looking at the actual return your financial assets earn, Centrelink assumes they earn income at set rates. So even if your term deposit earns less than the deemed rate, the higher figure could be used in your assessment.
If you or your partner work, you'll need to report any employment income you've been paid. You don't need to provide payslips unless Centrelink specifically asks for them.
Income test thresholds: standard rules
The table below shows the income free areas, taper rates, and cut-off points under the standard rules that apply to most pensioners.
Source: Services Australia, rates current from 20 March 2026.
A quick example: a single retiree earning $318 per fortnight is $100 over the free area. That means their fortnightly pension may be reduced by $50. For a couple earning a combined $480 per fortnight, they're $100 over their threshold, so each person's pension may reduce by $25.
Transitional rate income rules
Some pensioners are assessed under transitional rules, which apply different taper rates. The free areas remain the same, but the reduction is lower.
Source: Services Australia, rates current from 20 March 2026.
Transitional rate pensioners with dependent children can earn up to an extra $24.60 per fortnight per child without reducing their pension. Couples living together and both receiving a pension can each earn an extra $12.30 per fortnight per dependent child.
Your cut-off point may be higher if you receive Rent Assistance or the Work Bonus. It may be lower if you don't live in Australia.
Deeming rates
According to Services Australia, financial assets such as bank accounts, shares and managed funds are generally assessed using deeming rates rather than actual returns. Many account-based income streams are also assessed under deeming, though some older income streams are assessed under different rules.
Source: Services Australia, rates current from 20 March 2026.
The Work Bonus
According to Services Australia, the Work Bonus reduces the amount of eligible employment and self-employment income counted under the income test. As at 20 March 2026, eligible pensioners receive a $300 Work Bonus credit each fortnight. Unused credit can build up to a maximum Work Bonus balance of $11,800. Work Bonus does not apply to people receiving the transitional rate of pension
For pensioners living in land lease communities, government rental assistance may also be available to help offset site fees.
The Age Pension assets test
According to Services Australia, the assets test looks at the total value of what you own, including assets held outside Australia and debts owed to you. Your family home is generally exempt, though the rules around this can depend on specific circumstances such as whether you're temporarily absent from it. Retirement village and land lease arrangements may be assessed differently depending on the entry contribution - check with Services Australia for your situation.
How much Centrelink can pay depends on the value of your assets, your homeownership status and whether you're in a relationship. The Department of Social Services reviews these limits and cut-off points in March, July and September each year.
Full pension asset limits
When your assets are more than the limit for your situation, your pension may reduce. For couples, the limit applies to combined assets, not each person individually.
Source: Services Australia, rates current from 20 March 2026.
Part pension asset cut-off points
From 20 March 2026, part pensions cancel when your assets exceed the cut-off point for your situation.
Source: Services Australia, rates current from 20 March 2026.
If you receive Rent Assistance with your pension, your cut-off point is higher.
Transitional rate asset cut-off points
From 20 March 2026, transitional rate pensions cancel when assets exceed these thresholds.
Source: Services Australia, rates current from 20 March 2026.
Assets test taper rates
Once your assets exceed the full pension threshold, your payment may reduce gradually.
Source: Services Australia, rates current from 20 March 2026.
For example, a single homeowner with $371,500 in assessable assets is $50,000 over the full pension threshold. Their fortnightly pension would reduce by $150 (50 x $3.00). If assets exceed the part pension cut-off entirely, no pension is payable under the assets test.
Income test versus assets test: which one decides your payment?
The rule is straightforward: whichever test produces the lower pension amount is the one that determines your payment. A person with modest income but significant assessable assets might find the assets test is more restrictive. Conversely, someone with few assets but a steady income stream could find the income test reduces their pension more sharply.
Because both tests apply, the lower result is the one that determines the payment rate. Online calculators may provide an estimate only. A calculator that models only one test may not reflect the final rate used by Services Australia.
Situations that can change your test results
Retirement finances rarely stay static. Common changes that affect your assessment include starting part-time work, drawing down on investments, selling or buying property, earning rental income, receiving a lump sum, or a change in relationship status. Selling a property could reduce your assets test result while boosting your financial assets and deeming income, so the net effect on your pension isn't always obvious. We recommend speaking with a licensed financial adviser before making decisions like this.
If your circumstances change, notifying Centrelink promptly helps avoid overpayments or unexpected debts down the track. Understanding your pension position feeds into bigger decisions about the financial benefits of downsizing and where you choose to live.
Plan the retirement lifestyle you want
Getting clear on how both tests affect your pension makes retirement planning feel less uncertain. Knowing where you stand helps you make informed choices about housing, ongoing work, and day-to-day living costs.
Whether you're considering downsizing after retirement or exploring your downsizing options, understanding your pension position early gives you the confidence to focus on the lifestyle you actually want.
Pension rules and thresholds are updated regularly. Always confirm current figures with Services Australia before making major financial decisions.
This article provides general information only. It is not financial or legal advice. If you're making decisions about retirement income or housing, consider speaking with a licensed financial adviser.
Common Age Pension income and assets test questions
How much can I earn before it affects my pension?
Under the standard rules, up to $218 per fortnight for singles or $380 combined for couples. Amounts above these free areas reduce your pension at the applicable taper rate.
Does my partner's income and assets count?
Yes. Centrelink assesses both your and your partner's income from all sources, and combined assets for couples.
Is my home counted in the assets test?
Your principal home is generally exempt, though retirement village and land lease arrangements can be assessed differently. Other property you own, such as investment properties, is assessed.
Does income from shares or savings count?
Financial assets like these are assessed through deeming rates rather than actual returns.
Can I still get a part pension if I exceed the full pension threshold?
Yes. Under both tests, your pension tapers gradually between the full rate threshold and the cut-off point.
What happens if I'm permanently blind?
If you're permanently blind and receive Age Pension, the income test doesn't apply unless you get Rent Assistance or your partner receives a payment and is not also blind.