The ranks of Australians receiving the Age Pension are increasing. It’s important to understand who is eligible and the role it plays in retirement planning.

“Nearly half of Australians aged 65 years and older receive most of their income from the Age Pension (47.8% or 2,029,000 persons)”.

The Department of Social Services (DSS) data shows 2,565,870 people were receiving the Age Pension at the end of last year. This included 1,783,980 people receiving full pension payments, 393,365 people receiving part pensions as a result of the “income test”, and a further 385,525 people receiving part pensions as a result of the “assets test”.

Under the income test, individuals can earn a maximum of $190 in income per fortnight (and couples $336 per fortnight) from other sources before their pension is reduced by 50 cents for every dollar above the respective allowable limits.
Under the assets test, individuals and couples are assessed on whether they do or don’t own a home. They can hold up to a certain value of financial and other assets before their pension is incrementally reduced for every dollar above the respective allowable limits.

Singles and Couples Pension Amounts


Single homeowners can have up to $280,000 in assets (excluding family home) and non-homeowners up to $504,500, before their full Age Pension starts to reduce. The Age Pension cuts out completely once singles reach maximum asset limits of $634,750 (homeowners) and $859,250 (non-homeowners), with higher cut off points for singles who receive rent assistance. Figures exclude family homes.


The same rules apply to couples receiving the Age Pension, but the limits are higher.

Couple homeowners can have up to $419,000 in assets, and non-homeowners up to $643,500, before their full Age Pension starts to reduce. The Age Pension cuts out completely once couples reach maximum asset limits of $954,000 (homeowners) and $1,178,500 (non-homeowners).

The age pension, an inflation proof safety net

The DSS’s demographics data shows that there are just under 400,000 Australians aged 66 to 69 that were receiving a full of part pension as of December 2022 – roughly about 15% of the total Age Pension population.

Keep in mind that this is the youngest Age Pension cohort, as individuals can potentially qualify to receive a full or part Age Pension from the age of 65 years and six months, depending on the year they were born.

The largest cohort of pension recipients (about 51%) was aged 70 to 79.

For most Australian retirees, the Age Pension forms a meaningful portion of their retirement income, and for all retirees it should be considered as part of the retirement planning process.

Two key features of the Age Pension – it is payable until one’s death, and it adjusts for inflation over time – which makes the Age Pension a very valuable benefit as well.

Given this, a thorough understanding of how the Age Pension works, what benefits should be expected, and its role in planning for retirement is critical.

For retirees who meet the eligibility criteria, the Age Pension can act like an inflation-protected, lifetime-income safety net.

$60,000 A YEAR How much do you need to have in super to give you $60,000 a year

The widely reported ASFA (Australian Super Funds Association) Retirement standards suggests couples can enjoy a ‘comfortable lifestyle’ on around $70,000 a year and singles on around $49,000. It stands to reason then that a single person should be able to live more than comfortably on $60,000 while a couple would live reasonably well, if not lavishly.

If $60,000 a year sounds like your kind of retirement, the next step is to work out how much super you will need to fund it.

The tables below show the super balance required to provide a couple or a single person with annual income of $60,000.

Using ASIC MoneySmart’s Retirement Planner we’ve calculated various scenarios, depending on how long you want your money to last and the average annual return on your super investments, net of all fees.

For simplicity, we have not counted savings and investments held outside super. If you have significant outside savings, you will need less super. We also assume you own your home.

You will notice that the balances required for couples and singles are materially different, with couples needing significantly less super between them to generate an annual income of $60,000, relative to an individual. This is due to the lower age pension paid to a single and the additional lump sum required to get to $60,000 p.a. In reality a single person can live very comfortably on $45,000 in retirement.


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