17 October 2023

Aged Pension Guide

8 min read

Everything you need to know about the Aged Pension

The Age Pension is a fortnightly payment, paid by the government, designed to support the basic living standards of older Australians. It is paid to people who meet age, residency and asset threshold requirements. Pension rates are indexed to ensure they keep pace with Australian price and wage increases.

Most Age Pension payments are made by Services Australia . Age pensioners who also receive certain compensation payments from the Department of Veterans' Affairs (DVA) can choose to have their Age Pension paid by either DVA or Services Australia.

This blog will outline how to assess if you qualify for the aged pension, approximately how much you will receive, what the asset threshold is, how to apply for it and what the difference is between the aged pension and the disability pension.

How do I qualify for the aged pension?

To qualify for the Age Pension, a person must be:

  • an Australian resident (that is, living in Australia on a permanent basis) and
  • in Australia on the day the claim is lodged.


You must also satisfy one of the following:

  • be an Australian resident for a total of at least 10 years, with at least 5 of these years in one period
  • have a qualifying residence exemption
  • be a woman who is widowed in Australia when both she and her late partner were Australian residents, and who has 104 weeks residence immediately before the claim
  • be receiving Widow B Pension, Widow Allowance or Partner Allowance immediately before reaching pension age.


Special rules apply to residence in countries with which Australia has an International Social Security Agreement.

How much money will I receive?

Pensions are indexed twice a year, on 20 March and 20 September. This reflects changes in pensioners’ costs of living and wage increases.

Base pension rates are indexed to the higher of the increase in the Consumer Price Index and the Pensioner and Beneficiary Living Cost Index. These measure changes in prices on a range of goods and services such as:

  • food
  • health care
  • postage
  • fuel
  • housing costs
  • utilities costs.


Following indexation to price increases, rates are compared to a wages benchmark, and increased to meet the benchmark if necessary. The wages benchmark ensures the couple combined rate of pension is at least 41.76% of Male Total Average Weekly Earnings.

The single rate of pension is 66.33% of the couple combined rate.

If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.

For current Age Pension information, see the Services Australia.

As of 20 September 2023 the normal rates paid in the aged pension is below, dependent on your circumstances.

Normal rates


What are the age requirements for eligibility?

The pension age is being gradually increased from 65 to 67 years as set out in the table below.


What is the asset threshold for the aged pension?

Currently the asset threshold stands at: (October 2023 Services)

The pension assets test is designed so that people with substantial assets use their assets (either directly or to produce income) to meet their day-to-day living expenses before calling on the social security system for support.

An asset is any property or possession that a person owns, with the exception of exempt assets. Where a person's rate of pension is worked out under the assets test, the value of their assets above the assets free area reduces their pension by $3 a fortnight for each extra $1,000 in assets.

To learn more about the pension assets test, see the Services Australia website. The pension income test is designed to encourage people to supplement their income support payments with other income if they are able to. A pensioner can receive an amount of income before their pension starts to be reduced. This amount may comprise of income from investments, earnings, or a combination of income from various sources and is known as the income free area.

For each dollar of income over the income free area, the single pension is reduced by 50 cents. For couples, their combined pensions are reduced by 50 cents. This means that for a pensioner couple, their individual pensions are reduced by 25 cents a fortnight for each dollar of income that the couple has over the income free area.

What is the difference between an aged pension and a disability pension?

If you are currently in receipt of the Disability Support Pension and have reached the age of eligibility for the Aged Care Pension, you will be asked whether or not you would prefer to transfer to the regular Aged Pension. So what are the differences?

  • The rate of payment for both is the same
  • The income and asset tests used to determine rate of payment are the same
  • Both pensions are considered taxable payments
  • Both pensions will allow the partner to receive both carer payment and carer allowance.


  • The Disability Pension has ongoing medical review requirements. Age Pension does not.
  • Disability Pension recipients may be eligible for a Pensioner Education Supplement and Education Entry Payment whereas this is not available via Age Pension.
  • Both Disability and Age Pension receipts may receive a Mobility Allowance.
  • There are limits that apply on volunteering when receiving an Age Pension but not with a Disability Pension.
  • Those receiving a Disability Pension may be eligible for a higher rate of rent assistance when sharing a house with someone who is not their partner.


What documents do I need to apply for the aged pension? And how do I apply?

There are several things to consider when you’re preparing to claim the aged pension. Firstly, you can submit your claim in the 13 weeks before you reach the correct age to claim the aged pension.

You will then then to prepare and provide your supporting documents. The documents you need to provide will provide will depend on your circumstances. If you claim online, a list of documents required will be given to you. Read more about which documents you must supply before you can submit your claim.

You usually need to be an Australian resident and in Australia to claim the Aged Care Pension. However, social security agreements may help you claim if you’re living or have lived and worked in certain countries.

This blog is intended as a guide only and not to be used as a definitive explanation on the Aged Care Pension.

All details were correct at the time of publishing – October 2023.