Understanding Pension Rates and How to Qualify

Once an eligible Australian has reached retirement age, they may qualify for benefits through the Age Pension. The Age Pension functions as an allowance, supplied through the government, and is managed through Centrelink.
The precise amount you may receive is based on a number of factors, and is income and assets tested.

Below outlines the ins and outs of getting an aged pension and understanding pension rates. Get additional financial assistance information that goes beyond what you may qualify for through your aged pension.

Qualifying for the Age Pension

To qualify for the Age Pension, you must be a resident of Australia who is present in Australia on the day of filing, and must have lived in the country for over 10 years. The age at which you will qualify depends on when you were born. At this time, you must be 65 years of age, though that will increase in stages until the minimum becomes 67. While it has not been set at this time, the age requirement may continue to rise in the future.

Income Test

The income test determines how your benefits are affected by the amount of income you receive from other sources. This can include income from full or part time employment, superannuation pensions and annuities, as well as income generating investments. Income is included regardless of whether the money is generated within the country or outside of Australia.

For every dollar of income earned above $164 per fortnight for individuals, or $292 per fortnight for couples, the payment from your Age Pension will be reduced by 50 cents.

Assets Test

Similar to the income test, the assets test checks the valuation of your current assets, both foreign and domestic, and compares them to set thresholds. If your assets exceed the threshold, your Pension will decrease. Those who have assets with a high valuation may find their Pension payment reduced to zero.

Maximum Fortnightly Payment Rates

Payment rates are divided into four categories, each with separate qualifications. For 2016/17, the maximum basic rate for an individual or couple separated due to ill health is $794.80 per person. A couple living together can receive as much as $599.10 each. The maximum pension supplement can reach $65 for individuals, and $49 for couples, while the clean energy supplement can be $14.10 or $10.60, respectively.

This creates maximum totals per fortnight of $873.90 for an individual, or for each member of a couple separated due to ill health, and $658.70 per person for couples living together. After 2017, these rates are subject to change.

Age Pensions and Retirement

The amount received through the Age Pension is often not substantial enough to support a person through retirement on its own. This makes properly funding a superannuation critical to the financial security of many retired individuals. A quality superannuation account can help cover any shortfalls based on the amounts received through the Age Pension, or may be able to comfortably fund one’s retirement on its own.

Ultimately, proper planning can be the difference between a peaceful retirement without financial stress, and one where making ends meet is a challenge. Before you reach retirement age, consider the options available to help set you up for long-term financial success.

Additional Financial Resource for Pensioners

Even when collecting your aged pension, money can still be tight. Finding other financial subsidies and cash for emergencies can be important for a comfortable and relatively stress free lifestyle. Below are a range of options to help with reductions to monthly bills and other financially related assistance.

Help paying utility bills – If you are struggling with making your monthly utility repayments, you may qualify for assistance. Learn about different discounts for water, gas and electricity.

Senior Discounts – Don’t forget about your seniors discount card. Enjoy great savings across transportation, medical and everyday shopping items – Available in every state and territory.

Advanced Payments – If you are collecting certain Centrelink benefits, you may be eligible for Centrelink Advance Payments. This allows you to access future benefit payments to help with current financial short falls. It is similar to a loan as it provides you access to cash.

Pensioner loans – Qualifying for a loan can be difficult for seniors on a low fixed income. Fortunately there are some non-profits and banks who have collaborated to provide specialized loans for seniors in need. These are low cost low to no interest loans.