Age Pension Updates, Deeming Rates & Making the Most of Your Entitlements

Navigating Australia’s retirement system can feel complex, particularly with ongoing changes to pension rates, asset tests, and income assessments. However, recent updates introduced by Services Australia offer both opportunities and obligations for retirees. If you currently receive the Age Pension—or plan to apply for it soon—understanding these changes can help ensure you’re accessing the full range of entitlements you're eligible for.

This guide outlines recent updates to Age Pension rates, income and asset thresholds, deeming rates, and work bonus arrangements, along with tips on how to engage with these changes while remaining compliant with regulatory obligations.

1. Age Pension Rates Increased – Effective 20 September 2025

The Age Pension is indexed twice a year to reflect cost-of-living increases, and the latest adjustment (as of 20 September 2025) reflects changes in the Consumer Price Index (CPI), Pensioner and Beneficiary Living Cost Index (PBLCI), and Male Total Average Weekly Earnings. The pension is adjusted using the highest of these indices.

Updated Fortnightly Payment Rates:

• Single: $1,178.70 (increase of $29.70)

• Couple (each): $888.50 (increase of $22.40)

These amounts include the base pension, pension supplement, and energy supplement. They do not account for additional benefits like rent assistance.

What You Should Do:

These increases are automatic. However, it is good practice to review your Centrelink record periodically—especially if your financial or living circumstances have changed. Inaccurate or outdated information can affect your entitlements. For example, if you’ve recently downsized your home or sold assets, you may need to report these changes, even if you don’t think they’ll impact your payment.

2. Higher Asset and Income Thresholds – Expanded Eligibility

Eligibility for the Age Pension is determined through both an assets test and an income test. Good news: these thresholds were increased in July 2025, meaning more people may now qualify for either a full or part pension.

New Thresholds for Homeowners:

• Single:

• Income: up to $66,960.40/year

• Assets: up to $714,500

• Couple (combined):

• Income: up to $102,284/year

• Assets: up to $1,074,000

Non-homeowners have slightly higher asset thresholds due to their accommodation costs.

Why This Matters:

Even if you were previously ineligible, a slight change in the thresholds or in your personal situation—such as a decrease in investment income—could now make you eligible for a part pension. This may unlock access to associated benefits, such as the Pensioner Concession Card or reduced-cost healthcare and utilities.

What You Should Do:

Check your eligibility using the Services Australia Age Pension estimator tool, or engage with a Financial Information Service (FIS) officer. If you consult a licensed financial adviser, ensure they consider your full financial situation and document the advice accordingly, as per best interest obligations under the Corporations Act 2001.

3. Deeming Rate Changes – Impacts on Income Assessments

Deeming is how Centrelink calculates income from financial investments such as savings accounts, shares, and managed funds. Rather than using actual returns, Centrelink applies a standard deeming rate.

New Deeming Rates (from September 2025):

• Lower rate: 0.75%

• Upper rate: 2.75%

Thresholds:

• Singles: First $64,200 at 0.75%; remaining balance at 2.75%

• Couples: First $106,000 (combined) at 0.75%; remaining balance at 2.75%

What You Should Do:

Review your current investment returns. If you’re earning less than the deemed rate, your Age Pension entitlement may be reduced based on income Centrelink assumes you’re earning. This may be an area to discuss with a licensed adviser who can consider whether your investment strategy remains appropriate in light of these changes.

If you choose not to seek advice, it's important to understand the implications of an execution-only approach, where no recommendation or opinion is provided on financial products.

4. Work Bonus – Supporting Part-Time or Casual Work

The Work Bonus lets pensioners supplement their retirement income through paid work without immediately affecting their pension entitlements.

Key Features:

• The first $300 per fortnight of employment income is excluded from the income test.

• If unused, the bonus accrues in a Work Bonus balance (maximum of $11,800).

• Applies to income from gainful employment or self-employment (not rental income or dividends).

Example:

If you help a family business during holiday periods and earn $600 in a fortnight, your Work Bonus balance could offset $300 of that income, reducing the assessable amount and preserving more of your pension.

What You Should Do:

Check your current Work Bonus balance via your Centrelink online account. You must still report any earned income within 14 days, even if you haven’t been paid yet. Failure to report on time may lead to overpayments or compliance action.

If unsure whether your income qualifies, consider seeking factual information from Services Australia or formal advice from a licensed adviser.

5. Commonwealth Seniors Health Card – Access Without the Pension

If you’re over Age Pension age but don’t qualify for pension payments due to income or asset levels, you might still qualify for the Commonwealth Seniors Health Card (CSHC).

Income Limits (2025):

• Single: less than $101,105/year

• Couple (combined): less than $161,768/year

There is no assets test for the CSHC.

Benefits Include:

• Reduced-cost prescriptions under the PBS

• Access to bulk billing (where offered by GPs)

• Higher Medicare Safety Net thresholds

• State and territory-based concessions (e.g., public transport, electricity subsidies)

What You Should Do:

Apply online via myGov or in person through Centrelink. If your income was previously too high, check again after recent changes. Also, look into your state’s Seniors Card program for additional local benefits that are not linked to federal entitlements.

6. Stay Informed and Compliant

Keeping up with legislative and administrative changes ensures you’re making informed decisions about your retirement finances. While this article provides general information only, making changes based on incorrect assumptions—or without a clear understanding of the broader consequences—could result in underpayments, overpayments, or missed benefits.

Best Practice Tips:

• Regularly review your income and assets in relation to Centrelink thresholds.

• Retain documentation of your superannuation, investment income, and work-related earnings.

• Keep file notes or correspondence related to any decision to act without advice—particularly for transactions involving financial products.

• Be cautious of “execution only” decisions that might appear self-directed but may actually involve advice obligations if there has been influence or recommendation from a provider.

Final Note

The Australian retirement system includes multiple moving parts—pension payments, deeming, work bonuses, and concession cards—that can all interact with each other. Small adjustments in government policy or in your personal circumstances can trigger large changes in your entitlements.

Always ensure you’re working with the most current information. For factual updates, visit servicesaustralia.gov.au. If advice is needed, engage a licensed professional who is authorised to consider your individual needs and objectives.

Compliance Disclaimer

This article is for general informational purposes only and is not financial product advice. It does not take into account your objectives, financial situation, or needs. You should consider speaking with a licensed financial adviser and reviewing relevant Product Disclosure Statements (PDS) before making financial decisions. If you choose to proceed without advice, you should understand the risks associated with execution-only decisions, and you may be asked to acknowledge those risks in writing.