The Australian Government provides an Age Pension as a safety net for eligible citizens who cannot fully fund their own retirement through retirement savings. Managed and paid by via the Department of Human Services, or Centrelink as more commonly known, there is strict eligibility criteria, which includes residency period, age qualification and an assessment of income and assets. Due to this criteria, not every Australian will be eligible for an Age Pension.
The current qualification age for the Age Pension is 65 years. From 1 July 2017, this will rise by six months every two years until it reaches 67 by 1 July 2023. There are plans by the current government to further increase the Age Pension qualification age to 70.
The current rate of a full single Age Pension, including the Pension Supplement and Clean Energy Supplement is $22,365 per annum. Although considered by the government as ‘adequate’, it is some $1104 less than the amount considered necessary by Association of Superannuation Funds of Australia (ASFA) to live a ‘modest’ lifestyle.
The amount of Age Pension paid is indexed twice a year, in March and September, in line with the rise in Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index (PBLCI), whichever is greater. Pensions are then benchmarked against a percentage of the Male Total Average Weekly Earnings (MTAWE). Again, there are plans by the government to change the method of indexation to the CPI alone.
There are certain asset and income limits tests you need pass before you are granted a pension. If your assets or income exceeds those required for a full Age Pension, you may be eligible for a part Age Pension. And if you do not qualify for any Age Pension, you may, however, be eligible for a Commonwealth Seniors Health Card if your income is below a certain level.
Snapshot of Age Pension in Australia
When granted an Age Pension, you will also receive a Pension Concession Card, which entitles you many valuable concessions, including prescription medication, council rates and certain utilities.
To find out more about the Age Pension, visit the sections detailed below.
To be eligible for the Age Pension, you must meet certain criteria which is assessed by the Department of Human Services.
Pension payment rates
Your Age Pension payment is calculated against both the asset and income tests and you are paid the lower rate of the two.
Income and asset tests
You can still receive a certain amount of income and receive an Age Pension. This income can be derived from investments, renting out of property or as a salary from employment, as well as several other means.
The Work Bonus means that working pensioners will have the opportunity to earn more money before the Age Pension is affected and has replaced the Pension Bonus Scheme.
Claiming your Age Pension overseas
In most cases, customers receiving a pension can continue to be paid if they spend time overseas.
Disability Support Pension
Find information on disability services, Centrelink updates, and how the disability pension affects your finances, both before and after you retire.
A pension advance payment could help Tracy deal with a couple of unexpected bills.
How will a monetary gift affect the recipient’s Age Pension?
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