By Paul Feeney, Founder and Chief Executive Officer, Otivo
Most people who look up the Age Pension are trying to answer a different question: whether they'll need it. The two figures usually placed side by side — the pension on one hand, ASFA's $630,000 comfortable retirement target on the other — look like alternatives. They aren't. ASFA's own modelling assumes a part Age Pension tops up your super drawdown as the balance falls, and assumes the balance runs out at 92. The pension isn't the thing you avoid by saving. It's the floor the whole structure is built on. Here's what it pays, how the tests decide your share of it, and what that means for the number you're aiming at.
Quick answer
From 20 March to 19 September 2026, the maximum Age Pension is $1,200.90 a fortnight for a single person — about $31,223 a year — and $905.20 each for a couple, or $1,810.40 combined, roughly $47,070 a year. Those figures include the basic rate, the Pension Supplement and the Energy Supplement. Rates index on 20 March and 20 September each year.
What the full Age Pension pays right now
Two sets of figures matter for anyone reading this in late 2026, because indexation lands on 20 September.
- 20 March to 19 September 2026: Single (per fortnight) $1,200.90 — Couple, each (per fortnight) $905.20
- From 20 September 2026: Single (per fortnight) $1,237.70 — Couple, each (per fortnight) $933.00
In annual terms, the September figures come to about $32,180 for a single person and $48,516 combined for a couple. The 20 September increase is $36.80 a fortnight for a single pensioner and $27.80 each for a couple.
Those are maximums. Most recipients get less, because the means tests reduce the payment rather than switching it off.
When can you claim it?
Age Pension age is 67, and that's now settled — the staged increases finished, so anyone born on or after 1 January 1957 qualifies at 67. Services Australia administers the payment and publishes the residence requirements alongside the age test.
Worth separating from super, because the two get conflated constantly. Preservation age for super is 60 for anyone born on or after 1 July 1964. Age Pension age is 67. For most Australians there's a seven-year window in which super is accessible and the pension is not, and how that window is funded is often the most consequential decision in the whole retirement plan.
How do the two tests decide what you get?
There's an income test and an assets test, and both are applied. Services Australia works out a rate under each and pays the lower of the two. You have to qualify under both — being comfortably inside one test doesn't help if the other rules you out.
The income test has a free area, currently $226 a fortnight for a single person and $396 for a couple combined. Above that, the payment reduces by 50 cents in the dollar for singles and 25 cents each for couples. Financial assets aren't assessed on what they actually earn but on deeming — an assumed rate of return. From 20 March 2026 the lower deeming rate is 1.25% on the first $64,200 of financial assets for a single person and $106,200 for a couple, with 3.25% applying above that.
The assets test works on a threshold and a taper. Above the applicable free area, the payment reduces by $3 a fortnight for every $1,000 of assessable assets. Thresholds depend on whether you own your home and whether you're single or partnered, and they index on 1 July. Services Australia publishes the current thresholds.
One feature that surprises people is the Work Bonus. The first $300 a fortnight of employment income is excluded from the income test, unused amounts accrue up to a balance of $11,800, and new pensioners generally start with $4,000 already banked. For someone doing occasional paid work at 68, that can be worth more than the arithmetic first suggests.
The three-layer picture
Retirement income in Australia has three layers, and reading them as one system rather than three competing options is what changes the planning.
- The Age Pension is the floor. It's indexed twice a year to the greater of price or wage growth, it doesn't run out, and it rises as your other assets fall. That last feature is a form of longevity insurance that no drawdown strategy replicates.
- Super sits on top. It funds the years before 67 and lifts the standard of living above the floor after it. It's finite, and how long it lasts depends on the drawdown rate as much as the starting balance.
- The means test links them. As super is spent, assessable assets fall, and Age Pension entitlement rises. The two move in opposite directions by design.
This is why ASFA's targets are lower than people expect. As at the March quarter 2026, the ASFA Retirement Standard puts the lump sum needed at 67 for a comfortable lifestyle at $630,000 for a single homeowner and $730,000 for a couple — up from $595,000 and $690,000, the first increase in three years. For a modest lifestyle the figures are $110,000 single and $120,000 couple. All of them assume home ownership, and all of them assume a part pension arrives as the balance declines.
What does the pension come with beyond the payment?
The Pensioner Concession Card is generally issued to anyone receiving at least $1 of Age Pension, which is one reason a small entitlement can be worth claiming. It provides concessions on prescription medicines, medical services, utilities, council rates and transport, though the specifics vary by state and by provider.
Retirees whose income or assets put them above the cut-off may still be eligible for the Commonwealth Seniors Health Card, which carries its own concessions on out-of-pocket medical costs. It has an income test but no assets test.
Frequently asked questions
Can you live on the Age Pension alone?
Some Australians do, particularly those who own their home outright. It's a basic standard of living rather than a comfortable one, and housing status is the single biggest variable — ASFA's benchmarks all assume home ownership, and a retiree paying rent needs considerably more.
Does my super count as an asset for the pension?
Once you reach Age Pension age, yes. Super counts under the assets test and is deemed under the income test. Before Age Pension age, super generally isn't assessed for a partner receiving a payment, which is a detail that matters for couples with an age gap.
Does the pension keep up with the cost of living?
Rates are indexed twice a year, in March and September, to the greater of price growth or wage growth. ASFA has noted that retirees' living costs have risen faster than pension increases in recent years, which was one of the factors behind the lump sum benchmarks being lifted in early 2026.
How do I know whether I'll be eligible?
It depends on your assets, your income, your relationship status and your housing at the time you claim, none of which are knowable years out with precision. What is knowable is the trajectory. Otivo's retirement planning module models Age Pension eligibility alongside your super balance, other investments and lifestyle goals, and shows how the three layers interact over time. Otivo Pty Ltd holds AFSL and Australian Credit Licence No. 485665.
Sources
- Services Australia, Age Pension rates, 20 March 2026 and 20 September 2026. Services Australia, Income test and assets test for Age Pension. Department of Social Services, payment rate schedules.
- Association of Superannuation Funds of Australia, ASFA Retirement Standard, March quarter 2026, and Understanding ASFA Retirement Standard's new lump sums, 26 March 2026.
- ASIC MoneySmart, ASFA Retirement Standard. Australian Taxation Office, Conditions of release and preservation age.
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.