What's the age pension means test?

Updated on 27 November 2024 | 2 minute read

When you're planning for retirement, it's important to know how much money you'll have to live on. Depending on your situation, you may be eligible for the Age Pension. How much you get depends on the Age Pension means test. Here's what you need to know.

What's the Age Pension?

In Australia, the Age Pension is a fortnightly payment from the government that's designed to support older Australians. It's a safety net for retirees so they can keep a basic standard of living.

To get the Age Pension, you'll need to meet all the following requirements:

Be aged 67 or older
Be an Australian resident for at least 10 years
Meet the assets and income tests.

If your income or assets are above the government's limits, you won't get the full amount. To work out how much of the Age Pension you can get, the government uses the Age Pension means test.

How the Age Pension means test works

To work out your Age Pension eligibility, the government uses information you provide to Centrelink. The Age Pension means test involves 2 methods: the income test and the assets test.

The age pension income test is used to work out how much you can earn and still be eligible for the Age Pension. If your income is less than the limit, you could get a partial or full payment. You'll still need to meet the age and residency requirements.

What’s included

Your job (if you're still working)
Superannuation you can access (deemed income or actual income depends on product type)
Share market dividends (deemed income)
Financial investments (deemed income)
Savings accounts and term deposits (deemed income)
Rent you get from an investment property
Income from outside Australia (e.g. non-Australian pensions).

What's not included

Most other Centrelink payments, including rent assistance
Compensation for loss or damage to things you own
Child support payments you get
Any free board and lodging you get
Regular payments from a close relative
Emergency relief payments
First Home Saver Account withdrawals or interest
Repayment for expenses
Some work allowances (if you spend the whole amount on what it’s meant for, e.g. work travel)
NDIS payments.

The age pension assets test is used to calculate what you own (assets), including super. Remember, the family home is usually not included as part of your assets. If the value of your assets is over the limits, you may not be eligible for the Age Pension.

What’s included in the assets test?

Super account balance
Money in a bank account
Financial investments (e.g. shares)
Cars and other vehicles
Home contents or household items
Real estate/property (not including your home)
Annuity or pension from superannuation
Gifts you give or sell for less than market value
Businesses or partnerships/trust
Inheritance from a deceased estate

What's not included in the assets test?

Income support payments from life insurance, reversionary beneficiary, etc.
Compensation and insurance payouts
NDIS amounts and interest
Pre-paid funeral expenses
Exempt funeral investments
Pre-paid burial plots
Accommodation bond you pay to go into hostel care or other aged care services
Refundable deposit you pay to go into a residential aged care home
Refunded accommodation bond for high level residential aged care (nursing home) between 1 October and 5 November 1997
Payments for Australian prisoners of war.

How do my age pension means test results affect me?

You need to provide information for the income and assets test before you can get a payment. Once both have been assessed, the lower amount is your pension payment. If you fail either the income or the assets test, then you won't be eligible for the Age Pension.