Understanding the Age Pension means test
In Australia, the Age Pension is means-tested, meaning Centrelink assesses your financial situation using two separate checks: the income test and the assets test. Only one of these tests is applied to determine your pension rate—specifically, the test that results in the lower or 'nil' rate of payment. This dual-pronged approach ensures support goes to those who need it most, but it can also make eligibility rules complex for seniors to navigate. Keeping track of the current limits is crucial for retirement planning.
The assets test: what counts towards your limit?
Your assessable assets include most things you own, including financial investments, real estate (excluding your primary residence), superannuation if you are over pension age, vehicles, and other valuable items. However, some things are exempt, such as your family home, which is not counted under this test. It is important to note that the cut-off amount differs significantly between homeowners and non-homeowners.
Assets test thresholds (as of 20 September 2025)
| Your Situation | Homeowner Assets Cut-Off | Non-Homeowner Assets Cut-Off |
|---|---|---|
| Single | Over $714,500 | Over $972,500 |
| Couple (combined) | Over $1,074,000 | Over $1,332,000 |
| Couple separated by illness (combined) | Over $1,267,500 | Over $1,525,500 |
If your total assessable assets exceed these upper cut-off thresholds, your Age Pension will reduce to zero. You will also lose eligibility for the pension if your assets are over the lower threshold, which entitles you to a full pension, and Centrelink determines your income test results in a lower rate. The Age Pension is reduced by $3 per fortnight for every $1,000 of assets over the lower threshold.
The income test: what counts as income?
Centrelink assesses your income from all sources, including employment, investments, superannuation pensions, and rental properties. For financial assets like bank accounts, shares, and managed funds, Centrelink uses 'deeming' rules to estimate your income, regardless of what they actually earn.
Income test thresholds (as of 20 September 2025)
| Your Situation | Fortnightly Income Cut-Off Point |
|---|---|
| Single | Over $2,575.40 |
| Couple (combined) | Over $3,934.00 |
| Couple separated by illness (combined) | Over $5,094.80 |
If your total assessable income exceeds these upper cut-off thresholds, your Age Pension will be reduced to nil. Like the assets test, your pension is reduced gradually once your income passes the lower threshold amount ($218 per fortnight for singles and $380 for couples). The rate of reduction is 50 cents for every dollar of income over the free area for singles, and 25 cents for each dollar for a couple.
Additional factors that impact your eligibility
Several other factors can influence your pension calculation and overall eligibility. The Work Bonus, for instance, allows eligible pensioners who are working to earn more before their income affects their pension. Under this rule, the first $300 of your fortnightly employment income is not counted in the income test, and any unused portion can accumulate up to a maximum credit of $11,800.
Another important aspect is the exemption of your principal home from the assets test, regardless of its value. However, the value of your other assets and the amount of income you receive from all sources still play a critical role in the overall assessment.
The importance of regular reviews
Because the income and assets test thresholds are reviewed and updated by the Department of Social Services in March, July, and September each year, it is vital to stay informed about the most current figures. Economic changes, inflation, and cost of living adjustments can all affect these numbers. A comprehensive overview of eligibility and payment information can be found on the Services Australia website, which is the definitive source for these details Services Australia Age Pension information.
The conclusion of your eligibility journey
Retirement marks a significant life transition, and understanding the financial parameters of the Australian Age Pension is a key part of that process. The question of how much money you need to have to not get a pension in Australia isn't about hitting a single number but rather about navigating a complex set of rules. The final outcome is determined by which of the two tests—assets or income—leads to a lower or nil pension payment. Regular self-assessment and staying updated with the latest figures will help you manage your finances and plan for a more secure retirement. Consulting a financial information service or a financial adviser can provide personalized guidance tailored to your specific circumstances.
