Seven tips to help you live well on the Age Pension

Like most developed countries across the globe, Australia has an ageing population. As life expectancy continues to rise, so will the number of citizens of retirement age. By 2056, it is assumed that more than 22 per cent of the population will be aged 65 or over.

Currently, more than 3.9 million people are retired in Australia. According to the Australian Bureau of Statistics, around 49 per cent of retired men and 44 per cent of retired women rely on the Age Pension as their main source of income.

In line with indexation, Age Pension payment rates increase twice yearly. The amount of money you receive from the Age Pension depends on your circumstances. The maximum rate for a single person is $1096.70 per fortnight ($28,514 a year) and for couples $1653.40 a fortnight ($42,988 a year).

For those with little or no superannuation assets, living on a full or part pension can be tough. Here are a few simple things you can do to ensure you are making the most of your income.

1. Make a budget

Having a budget is smart. It allows you to see what money you have coming in and how much you need to spend, while highlighting areas for possible savings.

Start with listing all your expenses, prioritising essentials such as mortgage or rental payments, food, and bills.

Online budget planners such as Canstar’s Budget Planner and the MoneySmart Budget Planner can give you an estimate of your yearly cash flow.

2. Be confident in your income

You need to be sure that you can live within your means. If you’re unsure or concerned, play it safe for a while so you’re more prepared for any expenses you haven’t planned for.

Once you’ve stuck to a budget for a few months, you’ll be able to adjust accordingly.

3. Save for the unexpected

Life can be unpredictable, so it could be a wise idea to try to save for those unexpected things that happen from time to time.

“Such as the water heater system blowing up,” says Council on the Ageing Australia. “It won’t happen very often but if you don’t plan ahead for it, it could cause you trouble.”

COTA urges retirees to avoid getting into unnecessary debt in such situations.

“If you do (get into debt), don’t borrow money,” it says. “Get a financial counsellor to help. They know how to talk to people you’ve borrowed money from and they can help you get out of trouble.”

Free counselling is available from the National Debt Helpline, or you can reach out to organisations such as Lifeline if you feel you are under financial stress.

If you do find yourself in money trouble, reach out for help. Money problems can happen to anyone and the earlier you seek assistance, the more options you’ll have available to you.

4. Check what else you may be entitled to

The following cards provide seniors, retirees and pensioners with discounts on things such as travel, healthcare and utilities. Check to see if you’re eligible.

Pensioner Concession Card

Gives you access to cheaper utility and medical bills, and discounts on public transport in some states. You must:

  • be aged 60 or over, and
  • get the Age Pension or other payments from Centrelink.

See Pensioner Concession Card on the Services Australia website.

Seniors Card

Offers a discount on public transport and some goods and services. Generally, you must be aged 60 or over, and work less than 20 hours per week.

Commonwealth Seniors Health Card

Gets you cheaper prescriptions and medical appointments. You must:

  • be of Age Pension age
  • meet an income test
  • not receive Centrelink payments.

See Commonwealth Seniors Health Card on the Services Australia website.

5. Look for part-time work

Earning extra income up to a certain amount won’t affect your pension payments. A single person can earn up to $204 a fortnight ($5304 a year), couples can earn a combined income of up to $360 a fortnight ($9360 a year).

The government also has a Work Bonus Scheme that was designed to encourage people to stay in the workforce after the Age Pension age.

“People should think about that, and they might well find somewhere that’s looking for help, even if it’s only casual,” says Mr Yates.

The scheme works automatically and $300 a fortnight is added to your Work Bonus balance, up to a maximum of $7800 a year. All Work Bonus accounts start with a balance of $4000, meaning the full amount you can earn annually before your pension is affected is $11,800.

It’s not money you can withdraw but it acts as an offset in the income test for any extra money you earn. So you could potentially earn an extra $300 a fortnight, on top of the amount allowed for singles and couples, without impacting on your Age Pension.

That means a single person could potentially earn up to $504 a fortnight, couples an extra $660 a fortnight and still receive the maximum Age Pension.

6. Think twice before taking credit

The convenience credit brings is often tied to high interest rates. But there are credit cards with low or no fees and low interest, so it pays to shop around.

If you have a credit card, include the balance in your monthly budget so you can pay it off and avoid fees and interest.

It could also be worth exploring other options with your banking products as there are several financial institutions that offer incentives to seniors.

7. Make small lifestyle changes

Whether this is trying the generic version of products you often buy or heading to a different supermarket for your weekly shop, small changes in your day-to-day can really add up. Check out your local library for your reading material or keep an eye out for street libraries in your area. If you have a Seniors Card, go to a cafe that offers a discount on your morning coffee and read through the discounts available to you before making any big purchases.

Do you have any other tips for living well on the Age Pension? Please share them in the comments section below.

Also read: Do you now qualify for the Age Pension?

Ellie Baxter
Ellie Baxter
Writer and editor with interests in travel, health, wellbeing and food. Has knowledge of marketing psychology, social media management and is a keen observer and commentator on issues facing older Australians.


  1. As long as the income and assets test is applied to the age pension, it’s a complete waste of time, in my opinion. Those of us who can do so should work full-time instead of relying upon a pittance from the government, which won’t provide enough income to pay private rent, fuel and travel costs, vehicle rego, vehicle running costs, food and household items on a weekly basis. Just food alone runs to $500 per week for a family of 3, husband, wife and teenage child; both the latter have disabilities and can’t work. I’m 75 going on 76, and I work full-time in a labour-intensive occupation. If I can do it, so too can others.

    • Well after working for 50 years, and having two knee replacements, torn bicep muscles in both arms, a back that has seen better days, and then a ileal conduit after having the bladder and prostrate removed. I think any form of labour intensive work would be impossible for myself, and I consider myself fitter than a lot of men my age. I think you are the exception rather than the norm David Chapman.

  2. Would like YLC or those that know from personal experience to answer one question. If you work part time and under the $490 per fortnight for singles how does it affect your tax as the ATO deem your pension as a taxable income. so for a single on full pension of $27,664 per year plus the $490 per fortnight = $12,740 giving a taxable income of $40,404 per year.
    Just curious as I never hear from politicians or sites like YLC about this side of it.

  3. I am a Part Age Pensioner with a CSS Pension which is just in the 32.5 cents in the dollar tax bracket.
    My CSS Pension is indexed twice per year in line with CPI.
    Therefore if my CSS increases by $10 per fortnight, the ATO take $3.25 in tax, then Centrelink reduces my Age Pension by $5.00 per fortnight, Therefore my $10.00 per fortnight increase is actually only a $1.75 overall increase in income. Mostly due to the draconian rule that you have your pension reduced by 50cents in the dollar for any income above the threshold.
    So, if you are Part Pensioner or even a Full Pensioner, why would you go out and get a Part-time job.

  4. I always take advantage of the loyalty cards that cafe’s and businesses hand out.
    And if you don’t have a Rewards card for Woolworths or Flybuys for Coles that’s another thing to think about having. I save my rewards up for Christmas so that I have some gifts to give and a few treats on the table. The last few years I’ve had $100 to spend at the end of the year with a Rewards card. Oh, and don’t forget to “ask” if they have a seniors discount. If you don’t ask, you don’t get. Remember that McDonald’s have free coffee for seniors after purchasing a food item (that includes if you’re buying something for the kids).

- Our Partners -


- Advertisment -
- Advertisment -