- Have you reached your Age Pension age?
- What is your Age Pension age?
- Are you an Australian resident?
- Do you meet the Age Pension income test?
- Do you meet the Age Pension assets test?
- Can I claim the Age Pension if I live outside Australia?
- What steps do I need to take when claiming the Age Pension?
- What forms do I need to complete when claiming the Age Pension?
- Where can I find more information about the Age Pension?
Any Australian resident hoping to receive the Age Pension must actively apply for this government-funded benefit. You don’t automatically receive the Age Pension when you reach a certain age, or when you satisfy the other eligibility requirements. You must complete special Centrelink forms and submit those forms to Centrelink (Centrelink is part of the Department of Human Services).
When you do apply for the Age Pension, you must also satisfy certain requirements:
- You must have reached Age Pension age (although you can submit your claim up to 13 weeks before you reach Age Pension age)
- You must be an Australian resident for at least 10 years (or meet one of the residency exceptions), and note the residency rules become tighter from July 2018.
- You must meet an income test and an assets test, which enables you to be paid a FULL or PART Age Pension
Later in this article, I explain the steps involved in claiming the Age Pension.
Have you reached your Age Pension age?
You must have reached your Age Pension age to be eligible for the Age Pension. Depending on your date of birth your Age Pension age can be 65 years, 65.5 years, 66 years, 66.5 years or 67 years.
An Australian resident born before July 1952 has an Age Pension age of 65 years (although women born before 1949 have a younger Age Pension age). An Australian resident born on or after 1 January 1957 has an Age Pension age of 67 years. Australians born after June 1952 and before January 1957, have an Age Pension age of 65.5 years, 66 years, or 66.5 years, depending on a person’s specific date of birth. For more information on your Age Pension age, see the table below, or use SuperGuide’s Retirement Age Reckoner: Discover your preservation age and Age Pension age.
What is your Age Pension age?
|Commencement date||Age Pension age||Affects people born|
|65||Born before July 1952|
|From 1 July 2017||65.5||From 1 July 1952 to 31 December 1953|
|From 1 July 2019||66||From 1 January 1954 to 30 June 1955|
|From 1 July 2021||66.5||From 1 July 1955 to 31 December 1956|
|From 1 July 2023||67||On or after 1 January 1957|
Source: Adapted from information on Centrelink section of DHS website.
Are you an Australian resident?
You must be an Australian resident to be eligible to claim the Age Pension (although there are some exceptions), AND in nearly all cases, you must be residing in Australia on the day you make your claim.
An Australian resident is an Australian citizen or a permanent visa holder or a protected Special Category visa holder.
You must have been an Australian resident for at least 10 years (and the 10 years can be over a number of residency timeframes provided one of those timeframes is at least 5 years). You don’t need 10 years of residence however, if you were receiving a Widow Allowance, Widow B Pension, or Partner Allowance, immediately before reaching Age Pension age, or if you are/were a refugee. Alternatively, you don’t need 10 years of residence in Australia if you are a female AND your partner died while you were both Australian residents, provided you were an Australian resident for at least 2 years before applying for the Age Pension.
Warning: From 1 July 2018, individuals first claiming the Age Pension or the Disability Support Pension, will have to prove 15 years of continuous Australian residence to be eligible for the benefit, unless the individual satisfies one of two conditions:
- 10 years of continuous residency in Australia, with 5 years of this residency during their working life (working life is 16 years of age to Age Pension age), OR
- 10 years of continuous residency in Australia, and has not received an activity-tested income support payment for a cumulative period of 5 years.
Note: If you don’t satisfy the Australian resident requirements set out in the paragraphs above, you may still meet the Australian resident requirements if you have resided in another country (or worked in that country) and Australia and that country has an international social security agreement. Australia has such agreements with 30 countries. These agreements can assist eligible individuals who currently live in a country other than Australia. For an explanation of the special rules applicable when an international social security agreement is in place, click here.
Do you meet the Age Pension income test?
An eligible individual must satisfy the Age Pension income test, and the Age Pension assets test to receive a FULL, or PART, Age Pension. The amount of Age Pension will be based on the test that delivers the lowest amount of Age Pension entitlement. If an individual fails one of the tests, then he or she will not be eligible for the Age Pension.
The Age Pension income test involves assessing your fortnightly income against fortnightly income thresholds set by the government. If your fortnightly income exceeds the FULL Age Pension fortnightly income threshold, then your Age Pension entitlement will be reduced by 50 cents for every dollar a fortnight over the FULL Age Pension income threshold. Your Age Pension entitlement cuts out when your fortnightly income reaches an UPPER threshold, set by the government.
Note: A different income test threshold applies to a single person, compared with a couple. For more information about the Age Pension income test and the latest thresholds, see SuperGuide article Age Pension: Income test thresholds applicable since September 2017.
Important: If you own financial assets (such as shares and term deposits, and since 1 January 2015, superannuation assets for new Age Pension recipients), then the ‘income’ from those assets that is counted for the Age Pension income test is not the actual income earned on those investments, but ‘deemed’ income. Deemed income is when you assume a rate of return even when that rate isn’t necessarily what you actually earn on your investment. For more information on the deeming rules, see SuperGuide article Age Pension income test: Deeming rates and deeming thresholds. For more information on how the deeming rules affect superannuation pension assets, see SuperGuide article Income test changes (January 2015) mean less Age Pension forever.
Work Bonus: If you choose to work while receiving the Age Pension, then you will be entitled to a Work Bonus. The Work Bonus operates in the following way: If you earn more than $250 in a fortnight from employment income, then your assessable employment income for the purposes of the Age Pension income test will be reduced by $250 a fortnight. If you earn exactly $250 a fortnight, then your assessable employment income is zero. If you earn less than $250 (or $nil) a fortnight, then part of your Work Bonus will be used to reduce your assessable employment income to zero, and part will be used to accumulate a Work Bonus balance (up to $6,500), that can be used to reduce future assessable employment income. For more information about the Work Bonus, see SuperGuide article Age Pension: Are you eligible for the work bonus?
Do you meet the Age Pension assets test?
For convenience, we repeat the general Age Pension rule: An eligible individual must satisfy the Age Pension income test, and the Age Pension assets test to receive a FULL, or PART, Age Pension. The amount of Age Pension will be based on the test that delivers the lowest amount of Age Pension entitlement. If an individual fails one of the tests, then he or she will not be eligible for the Age Pension.
The Age Pension assets test involves determining the value of your assessable assets, against the assets thresholds set by the government. If the assets that you own (excluding your home) are worth less than the threshold for a FULL Age Pension (officially known as the ‘assets test free area’), set by the government, then you can expect a FULL Age Pension, subject to also meeting the Age Pension income test.
If the value of your assets exceeds the threshold for a FULL Age Pension (assets test free area), then for every $1,000 of assets that exceeds the assets test free area, your fortnightly Age Pension entitlement will be reduced by $3. For example, if your assets exceed the assets test free area by $100,000, your fortnightly Age Pension will be reduced by $300 a fortnight, or roughly $7,800 a year.
Your Age Pension entitlement cuts out when the value of your assets reaches an UPPER threshold, set by the government. The UPPER threshold of the Age Pension assets test is adjusted 3 times a year: in March, July and September. For more information about the Age Pension assets test and the latest thresholds, see SuperGuide articles Age Pension: Assets test thresholds applicable since September 2017 and What assets count for the Age Pension assets test?
Note: For the purposes of assessing individuals against the Age Pension assets test, eligible Age Pensioners are divided into 4 categories. Single people have different asset thresholds compared with a couple, and homeowners have lower asset thresholds compared with non-homeowners.
Can I claim the Age Pension if I live outside Australia?
If you’re planning to travel outside Australia, or live outside Australia, you need to be aware of special rules applicable to nomadic Age Pensioners. Age Pensioners located outside Australia can be divided into 4 main categories:
- Outside Australia temporarily (travelling overseas on holiday, including extended periods). If your overseas trip is less than 6 weeks, then your Age Pension entitlements remain the same. If you plan to be away from Australia for more than 6 weeks, your Age Pension rate will be reduced to the ‘outside Australia rate’ and the Pension Supplement will be paid at the basic rate, and the Energy Supplement will no longer be paid. Note that the Energy Supplement has not been paid to any new Age Pensioners since 20 September 2016.
- Living outside Australia permanently, but originally apply for Age Pension when living in Australia. Again, since you are outside Australia for more than 6 weeks, your Age Pension rate, paid monthly, will be the ‘outside Australia rate’ and the Pension Supplement will be paid at the basic rate, and the Energy Supplement is not paid. Note that the income and assets tests have lower thresholds for PART Age Pension, if you are living overseas.
- Relocate to Australia after living overseas. According to Centrelink, if you have returned to Australia within the past 2 years and you claim the Age Pension, and you are considering relocating overseas again you will not receive payments outside Australia until 2 years have passed.
- Living outside Australia permanently, and apply for Age Pension while living overseas. Your Age Pension entitlements will be determined by the application of the relevant international social security agreement (if applicable). Further, you will only be entitled to the FULL Australian Age Pension rate under an international social security agreement, if you have been an Australian resident for 35 years. If you have been an Australian resident for less than 35 years, then your Age Pension entitlement will be a proportional rate, subject also to the income and assets tests. If the country you reside in does not have a social security agreement with Australia then it is unlikely you will be able to claim the Australian Age Pension via that country.
For more information about receiving the Australian Age Pension while travelling or living overseas, see Centrelink’s website, and specifically this link.
What steps do I need to take when claiming the Age Pension?
- Are you eligible? Check whether you are eligible for the Age Pension (see explanation above). If you are claiming as a couple, you will need to check your partner’s eligibility as well. If only one member of a couple is claiming the Age Pension, the assets and income of both members of a couple are taken into account, and the maximum entitlement the person will receive is one-half of the Age Pension couple rate, rather than the single rate of Age Pension.
- Lodge your claim before you reach Age Pension age. If you believe you may be eligible, submit your claim to Centrelink before you reach Age Pension age (up to 13 weeks before). The sooner you lodge your claim, the earlier you will receive Age Pension payments, but only taking effect from the day you reached Age Pension age. You can lodge your claim after you reach Age Pension age, but payments will only commence from the date of lodgement, rather than from when you reached Age Pension age. If you are already receiving Centrelink benefits, then according to Centrelink you will receive a letter within 9 weeks of reaching Age Pension age, explaining the transition to the Age Pension and what you need to do.
- Or lodge an intent to claim the Age Pension (and submit full claim within 14 days). Alternatively, as soon as you reach Age Pension age, lodge your intent to make a claim (and then submit your claim within 14 days to ensure payments are backdated to when you lodged your intent to claim). You can lodge your intent to claim online (see this link), or via phone (ring Centrelink on 13 23 00), or by visiting a Centrelink Service Centre (see this link for locations).
- Lodge your full claim online. You can lodge your claim online (see this link). If you plan to lodge online, which is becoming the most popular option, then you will need to register for a Centrelink online account, if you do not already have one. The process for opening a Centrelink online account is a little protracted because you need a Customer Reference Number to register for a Centrelink online account. If you don’t have a Customer Reference Number, then you will need to visit a Centrelink service centre to obtain one, and you will need to bring along ‘proof of identity’ documents. If you have trouble registering for a Centrelink online account, phone Centrelink on 13 23 07.
- Or lodge your claim in person, or via post. If you cannot lodge your claim online (not everyone has access or ability to use internet services), then you will need to complete a claim form and lodge your claim by visiting a Centrelink service centre (see this link for finding the Centrelink service centre closest to you). If you choose to post your claim for the Age Pension, then post the claim to: Department of Human Services, Seniors Services, Reply Paid 7808, Canberra BC ACT 2610. You can obtain a copy of the claim form by clicking here, or by visiting a Centrelink service centre.
- Gather all necessary information on your income, assets and personal details (including your partner’s information). Ensure you have the information necessary to complete your claim (you will need to complete a special income and assets form: click here). You will need the following information:
- Income you receive, such as bank interest, payments from private super pensions, expected employment income from work in retirement
- Full list of assets that you own, including household assets such as cars and furniture. Assets also include financial assets/investments
- Financial investments, such as shares, cash at bank, term deposits and managed funds
- Details of superannuation assets, including superannuation pensions
- Details of investment properties and holiday houses
- Ensure you have necessary residency and payment details and documentation. Along with asset and income information, Centrelink will request contact, residence and payment details including:
- Australian residency status, for example, if not born in Australia, when you became an Australian citizen, or timeframes when you lived in another country. If living outside Australia, details of the international social security agreement you are claiming under
- Tax file number
- Bank account details
- Additional information may be required. You may need to provide additional information (and forms) if you have a private company or a private trust, or if you are self-employed, or if the person claiming the Age Pension is legally blind. Note that a person who is considered legally blind is not means-tested for the Age Pension, or other Centrelink benefits (unless they are claiming rent assistance).
- Consideration of your claim. Centrelink will then consider your claim, and provide you with information about when your payments start, and how much you will receive.
- Check your review your claim, if denied or unhappy. If you disagree with the amount of payment, or you have been denied the Age Pension (and believe Centrelink has made a mistake), you can contact Centrelink to check the claim (including asking for a full explanation of the decision made). If you are unhappy with the checking or explanation, you can request an official internal review. If you are unhappy with the internal review you can take your complaint to the Administrative Appeals Tribunal.
For more information about claiming the Age Pension, see Centrelink booklet, Information you need to know about your claim for Age Pension and Pension Bonus.
What forms do I need to complete when claiming the Age Pension?
All Age Pension applicants will need to complete at least 2 forms:
Some Age Pension applicants will need to complete additional forms, or supply additional information depending on the circumstances.
Where can I find more information about the Age Pension?
The following SuperGuide articles provide further explanation of the Age Pension rates and thresholds, and how the Age Pension rules operate:
- Australian Age Pension: 10 important facts you should know
- Age Pension age now 65.5 years (since July 2017)
- Age Pension: More Australians entitled to payments since September 2017
- Latest Age Pension rates (since September 2017)
- Age Pension: Assets test thresholds applicable since September 2017
- Age Pension: Income test thresholds applicable since September 2017
- Age Pension income test: Deeming rates and deeming thresholds