How the Age Pension Works in Australia 2026

Understanding how the Age Pension works in Australia comes down to three questions: are you old enough, and do your income and your assets sit under the limits? This guide walks through the whole system — the age, the two tests, deeming, the family-home exemption and the traps — so you can see where you stand well before you claim.

Last updated: August 2026 · Services Australia · current from 20 March 2026

The Age, and the Two Tests

Age Pension age is 67 — it finished rising from 65 on 1 July 2023 and there are no plans to lift it further. Reaching 67 is only the entry ticket, though: you also have to meet the residence rules and pass both an income test and an assets test. Services Australia works out what your pension would be under each test and pays you the lower of the two. That single design choice is the key to the whole scheme, because it means a comfortable asset base can cut your pension even when your cash income is modest, and vice versa.

What You Actually Get

The maximum single rate is $1,200.90 a fortnight and a couple gets $905.20 each, in both cases including the pension supplement and the energy supplement on top of the basic rate. Those maximums are indexed twice a year, on 20 March and 20 September, so they keep pace with prices and wages. If your income or assets are above the free areas, your pension tapers down from that maximum — 50 cents in the dollar of income over $226 a fortnight for a single, or $3 a fortnight for every $1,000 of assets over the limit — until it reaches zero at the cut-off.

Deeming and the Family Home

Two rules shape almost every Age Pension outcome. The first is deeming: rather than track the real interest and dividends on your savings, shares and super, Services Australia assumes those financial assets earn a set rate of return and counts that deemed income in the income test. It’s usually generous — if your money earns more than the deeming rate, the extra doesn’t count. The second is the family-home exemption: your principal residence isn’t an assessable asset, no matter its value. To keep that fair to renters, non-homeowners get much higher asset limits — a single non-homeowner can hold $600,000 before the assets test bites, against $333,000 for a homeowner.

Working, and the Traps to Avoid

You can work and still draw a pension. The Work Bonus sets aside part of your employment income before the income test applies, so a part-time job costs you far less pension than the raw taper suggests. The common traps are quieter: gifting money away to reduce your assets is caught by “deprivation” rules for five years; a lump sum from selling an asset can push you over the assets test; and forgetting to tell Services Australia about a change in your circumstances can create a debt later. The safest approach is to run the numbers before any big financial move — that’s exactly what the calculator is for.

Common Questions

Can I get the Age Pension and still have super?

Yes. Superannuation you’ve kept in your fund counts in the assets test and is deemed for the income test once you’re over pension age, but having super doesn’t disqualify you — plenty of part-pensioners draw both a super pension and a part Age Pension.

Does the Age Pension get taxed?

It’s technically a taxable payment, but most pensioners pay no tax on it because of the low-income and seniors offsets. Tax isn’t deducted automatically; you can ask Services Australia to withhold some if you have other income.

What if I don’t qualify?

If you’re 67 but over the limits, you may still get a Commonwealth Seniors Health Card for cheaper medicines and concessions, and you can reclaim the pension later if your income or assets fall.

📋 Verified — Official source: Services Australia — Age Pension rates, income and assets tests