Living on the Age Pension: What You Need to Know (and Do)
If you've started receiving the Age Pension—whether it's a full or part pension—congratulations. It’s a significant milestone in your retirement journey. But once those fortnightly payments begin landing in your account, the big question becomes: what now?
The Age Pension isn’t a “set and forget” arrangement. Staying eligible and making the most of your pension involves ongoing responsibilities. From part-time work to home improvements, here’s what you need to know to stay informed—and compliant.
1. Keep Centrelink Updated - Even About Home Renovations
Once on the pension, it’s easy to assume Services Australia (Centrelink) has a constant overview of your financial life. But they don’t. You're legally required to report any changes to your circumstances within 14 days.
This includes:
Moving house
Travelling overseas for more than six weeks
Changes to your relationship status
Receiving an inheritance or gift
Selling assets or making significant purchases (e.g., home upgrades)
Earning income from work or business
These changes can affect how much you receive. If you're overpaid due to unreported changes, Centrelink may recover the amount. It’s important to avoid this by reporting changes promptly.
If you’re unsure whether a change is reportable, it’s best to ask. You can contact Services Australia or log into your MyGov account to update your details.
Note: In accordance with compliance best practices, ensure any assistance you seek from a financial professional regarding asset sales or gifts does not constitute personal advice unless a formal advice document is provided (e.g., Statement of Advice).
2. You Can Work While on the Pension
Many people assume they have to give up work entirely when they begin receiving the Age Pension. In fact, working is not only permitted—it’s supported through specific income rules.
Here’s how it works:
Income-free thresholds:
$218 per fortnight (single)
$380 combined per fortnight (couples)
Work Bonus: You can earn an extra $300 per fortnight from employment or self-employment, without affecting your pension.
This means a single person can earn up to $518 per fortnight, and couples up to $980 combined, without reducing their pension.
Unused Work Bonus amounts accumulate up to a cap of $11,800, providing further flexibility.
If your income exceeds the threshold and your pension is reduced or paused, you may still retain your Pensioner Concession Card for up to 2 years, and remain registered for 26 weeks—allowing you to resume payments if your income drops within that time.
Compliance Tip: If you’re receiving advice about work income and pension interactions, this may require personal advice. Ensure you receive appropriate documentation such as a Record of Advice if your circumstances have not significantly changed, or a full Statement of Advice if they have.
3. Gifting Money Has Limits - Even to Your Children
While you are allowed to give financial gifts to loved ones, Centrelink applies limits.
Gifting rules:
Up to $10,000 per financial year
No more than $30,000 over five years
Amounts exceeding these thresholds are still counted as financial assets for five years and may impact your pension.
If you're considering making a substantial gift, it's recommended to consult a qualified financial adviser who can confirm the impact on your Age Pension and asset test. This may trigger the need for a formal advice document under ASIC guidance.
4. How Deeming Works for Income from Investments
Centrelink uses “deeming” to estimate income from financial assets like bank accounts, shares, or account-based pensions. Actual returns are not assessed.
Current deeming rates (frozen until 1 July 2026):
0.25% on the first $64,200 (single) or $106,600 (couple)
2.25% on anything above that
These rates apply regardless of the actual return on your investments. While this simplifies the system, it may lead to your assessed income being different from your real income.
5. Travelling or Living Overseas? Plan Ahead
The Age Pension allows you to travel overseas, but there are time-based conditions:
Up to 6 weeks: No change to your payment
6 to 26 weeks: Some supplements may stop
Over 26 weeks: You must have lived in Australia for 35 years between ages 16 and 67 to continue receiving the full pension. Otherwise, your payment may be reduced.
If you're overseas longer than 12 months, your home could be counted as an asset, potentially affecting your pension entitlement.
Advice warning: If you’re receiving strategic financial planning advice regarding overseas residency, ensure it is documented appropriately and complies with Centrelink and ATO residency definitions. Consider obtaining a Statement of Advice if this affects multiple areas such as super, property, or Centrelink benefits.
Final Tips: Know the Rules, Use the Tools
The Age Pension provides flexibility, but it also carries ongoing responsibilities. Whether you're still working, gifting to family, or planning travel, knowing the rules will help protect your entitlements.
Top compliance-aligned tips:
Use MyGov to report changes within 14 days.
Contact Services Australia or a Financial Information Service officer if in doubt.
Keep thorough records (e.g. gifting, asset sales, travel dates).
Avoid acting on financial product information without personal advice documentation, especially if your circumstances have changed.
Disclaimer
This article is based on information available as of August 2025. Legislation and policy—such as deeming rates, thresholds, or eligibility criteria—are subject to change. For the most current updates, refer to the Services Australia website or speak with a licensed financial adviser.
This information is general in nature and does not consider your individual objectives, financial situation, or needs. You should consider seeking personal financial advice from a licensed professional and reviewing the relevant Product Disclosure Statement (PDS) before making any decisions related to financial products or Age Pension entitlements.