By Philippa Billings, Chief Advice Officer, Otivo
A lot of retirement planning treats the Age Pension as a consolation prize — the thing you fall back on if super didn't work out. The numbers say otherwise. For most Australian retirees it's a substantial and growing share of income, and it's the reason ASFA can model $630,000 as supporting a comfortable retirement rather than lasting eleven years. It's also means-tested against the super balance you spent forty years building, which is where the interaction gets interesting. Here's how the two fit together.
Age Pension age is 67 for anyone born on or after 1 January 1957, and entitlement depends on income and assets tests administered by Services Australia. As at 1 July 2026, a single homeowner can hold assets up to $333,000 for the full pension and up to $733,500 for a part pension. Super counts under both tests once in retirement phase.
When does the Age Pension start?
At 67, and not before. There's no early access equivalent to super's preservation age, and Services Australia states there are currently no plans to raise the age further.
Three requirements apply. Reaching 67. Australian residency, generally 10 years in total with at least five continuous. And satisfying the means tests, where both the income test and the assets test are applied and the one producing the lower payment determines the amount.
Claims can generally be lodged in advance of turning 67 rather than only after, and Services Australia publishes the lodgement window along with the current thresholds.
How much is the Age Pension?
For the period 20 March to 19 September 2026, the maximum rate is $1,200.90 a fortnight for a single person and $905.20 a fortnight for each member of a couple — $1,810.40 combined. These figures include the pension and energy supplements.
Payment rates are reviewed on 20 March and 20 September each year, while the means-test thresholds are indexed on 1 July. That mismatch is worth knowing, because it means a page quoting a current payment rate can easily carry an outdated threshold, and vice versa.
How does the assets test work?
The assets test counts most assets other than the family home, including super in retirement phase, savings, investments, vehicles and contents.
Full pension applies below these figures, from 1 July 2026:
- Single homeowner, $333,000
- Couple homeowner, combined, $499,000
- Single non-homeowner, $600,000
- Couple non-homeowner, combined, $766,000
Part pension cuts out above these figures:
- Single homeowner, $733,500
- Couple homeowner, combined, $1,102,500
- Single non-homeowner, $1,000,500
- Couple non-homeowner, combined, $1,369,500
Between the two, the payment reduces by $3 a fortnight for every $1,000 of assets above the lower threshold. The family home is exempt, which is why home ownership matters so much to the outcome and why ASFA's benchmarks assume it.
How does the income test work?
The income test counts assessable income including employment income, rent, some income streams, and deemed income from financial assets.
From 1 July 2026, a single person can have $226 a fortnight and a couple $396 a fortnight combined before the pension reduces, at 50 cents in the dollar above that. Payment cuts out at $2,627.80 a fortnight for a single person and $4,016.80 combined for a couple.
Deeming is the part that catches people. Rather than counting what financial assets actually earn, Services Australia applies set rates — from 1 July 2026, 1.25% on balances below $66,800 for a single person and $110,600 for a couple, and 3.25% above those thresholds. So a term deposit paying nothing much can still generate assessable income on paper.
The Work Bonus provides a concession for income from employment, which is why part-time work after 67 and a part pension can coexist more comfortably than the raw income test suggests.
How does super interact with the tests?
This is the crux, and the treatment changes at 67.
Before Age Pension age, super in accumulation phase is generally not counted under either test — one reason the years before 67 look different from the years after. Once Age Pension age is reached, super is counted regardless of phase: the balance counts under the assets test, and account-based pension income is generally assessed under the income test through deeming on the account balance.
Two consequences follow. A larger super balance reduces or removes any entitlement, so the two aren't additive without limit. And the interaction is dynamic — as a balance is drawn down across retirement, assessable assets fall and any entitlement tends to rise, which is exactly the pattern ASFA's lump sum benchmarks are modelled on.
The practical read is that most Australians end up somewhere on a spectrum between full pension and no pension, rather than at either end. How a particular arrangement is assessed depends on individual circumstances, and Services Australia is the authority on it.
What about the years before 67?
They have to be funded without it, which is the single most important planning consequence of the whole system.
Someone finishing work at 61 covers six years unaided. Preservation age is 60, so super is available to do that — but every dollar drawn in those years is a dollar not available later, and there are fewer contribution years beforehand. This is why an earlier finish generally requires a larger balance rather than a smaller one, and it's covered in how do you know when you can afford to stop working.
Frequently asked questions
Can you get the Age Pension if you have super?
Yes, subject to the means tests. Super counts as an asset once Age Pension age is reached, so a larger balance reduces the payment, but many Australians receive a part pension alongside their own super income.
Does the family home count towards the assets test?
No. The principal home is exempt, though non-homeowners have higher thresholds to reflect their housing costs. Rent Assistance may also apply for those who rent.
Do you have to apply for the Age Pension?
Yes. It isn't paid automatically at 67 — a claim has to be lodged through Services Australia, and claims can generally be submitted in advance of reaching the age.
Does drawing more from super reduce your Age Pension?
Drawing down reduces the balance, which reduces assessable assets and can increase entitlement over time. But money drawn and then held in a bank account or other investment is still assessable, so spending it and moving it produce different outcomes.
Where this leaves you
The Age Pension isn't a fallback, it's a structural part of most Australian retirement plans — and because it's means-tested against super, the two need to be looked at together rather than in sequence. All the figures above are indexed and change at least twice a year, so Services Australia is the reference point for anything specific. Otivo, a digital financial advice platform licensed under AFSL and Australian Credit Licence No. 485665, has a retirement planning module that considers Age Pension eligibility alongside age, salary, super balance, other investments and lifestyle goals.
Sources
- Services Australia, Assets test for Age Pension. servicesaustralia.gov.au
- ASFA, Retirement Standard, February 2026 release. superannuation.asn.au
- ASIC MoneySmart, ASFA Retirement Standard. moneysmart.gov.au
Disclaimer
The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.