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 by and paid for via Services Australia, or Centrelink as its 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 66.5 years.
The rate of a full single Age Pension, including the Pension Supplement and Clean Energy Supplement is $25,155.00 per annum (from 20 September 2021).
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.
Around 2.58 million age pensioners will benefit from increased payments.
Actuaries Institute says retirement system must be fairer, simpler and more efficient.
Age Pension boost could mean little if cost of essentials stays high, as predicted.