It’s one of the most common questions asked by both retirees and those thinking about retiring. Please note: We’re not financial advisers, but we can provide you with some general information to help answer this question. You should get independent advice based on your specific financial situation.
Age Pension eligibility
To be eligible for the Age Pension in Australia, you must currently tick all of the following boxes:
- you are aged at least 66 years and 6 months (and the eligibility age will increase to 67 on 1 July 2023)
- you have been an Australian resident for at least 10 years (including an unbroken stretch of at least five years).
- you must pass both the Age Pension Income and Assets tests. This is where the amount of super you have (and how you access it) can affect your eligibility for either a full or part Age Pension.
If you’re eligible for the Age Pension, you can also get Rent Assistance, even if you downsize to a land lease community.
How your super affects the Age Pension Assets test
Your superannuation account balance is included in the Age Pension Assets test (along with the value of all your other assets you and your partner own, excluding your residential family home). This test is applied if you have reached the Age Pension eligibility age and you satisfy the Australian residency requirement.
- If the total value of your assets does not exceed a minimum threshold, then you will be eligible for the full Age Pension (provided you also pass the Age Pension Income test).
- If the total value of your assets does not exceed a maximum threshold, then you will be eligible for a part Age Pension (again, provided you also pass the Age Pension Income test).
The minimum and maximum asset value thresholds in the Age Pension Assets test are different for different living situations; for example, if you are single or part of a couple, and whether or not you own your own home.
Check out the current minimum and maximum thresholds.
How your super affects the Age Pension Income test
Any super income stream you receive is also included in the Age Pension Income test. Like the Age Pension Assets test, the Age Pension Income test is applied if you have reached the Age Pension eligibility age and you satisfy the Australian residency requirement.
You can start receiving a super income stream when you reach your superannuation preservation age and you have satisfied a condition of super release (such as retiring). This income is tax-free after you turn 60.
Your super income stream will be included in the Age Pension income test, along with any other income you or your partner may receive (such as interest and rent from investment properties).
- If the total amount of your regular fortnightly income you receive does not exceed a minimum threshold, then you will be eligible for the full Age Pension (provided you also pass the Age Pension Assets test).
- If the total amount of your regular fortnightly income does not exceed a maximum threshold, then you will be eligible for a part Age Pension (again, provided you also pass the Age Pension Assets test).
The minimum and maximum Income test thresholds are different for singles and couples.
You can check out the current minimum and maximum thresholds here.
Want to learn more about making the most of your next 30 years?
Retirement living can be the best time of your life. We’re committed to making life better for the over 55s. Check out downsizing.com.au for more insights and great advice on living life to the fullest. We also have a great range of over 55 properties to help you do that with like-minded people in land lease communities and retirement villages.
