Services Australia evaluates your Age Pension entitlement using both the Assets Test and the Income Test. Centrelink pays you the LOWER of the two results. Your principal family home is 100% exempt from the Assets Test, and superannuation held by a spouse under Age Pension age (67) is fully exempt from both tests.
Australian Age Pension & Centrelink Means Test A$ Rates
Simulate fortnightly payments, taper rate reductions, deeming income thresholds, and Pension Concession Card eligibility.
Pension Parameters
Indexed to Services AustraliaSuper balance in pension phase, bank deposits, shares, managed funds.
Investment properties (equity), vehicles, boats, contents ($10k standard).
Services Australia grants a $300/fortnight Work Bonus exemption per person.
Net rental property income, foreign pensions, or private business profits.
Part Age Pension
$784.50
($392.25 each / fn)$20,397
Assessable income; often offset to nilAssets Test Binds
Taper: -$3 / $1,000Age Pension Asset Taper Curve
-$3.00 per $1,000 over thresholdRun the analysis to get a written read on your Age Pension scenario, where the means tests bind, and which levers are worth discussing with an adviser. The model runs in your browser where your device supports it; if it does not, the figures you entered are sent to our inference proxy to produce the response.
The Centrelink Taper Rate Trap: How $50k in Extra Super Wiped Out $3,900/yr in Pension
A real-world Australian retirement planning case study on the -$3.00 per $1,000 fortnight assets test cliff and legal sheltering strategies.
Why the assets taper bites so hard
Under the assets test taper rate this tool applies, every $1,000 of assessable assets above the full-pension threshold ($470,000 for a homeowner couple in the tool's rate table) cuts the combined Age Pension by $3.00 a fortnight, or $78.00 a year. Read as a rate of return, that is 7.8% a year of the asset. A dollar sitting just above the threshold therefore has to earn more than 7.8% before it leaves the household better off — which is why the last slice of savings above the line often costs more than it pays.
The Scenario: John & Margaret's $520k Nest Egg
John (age 67) and Margaret (age 67) are a retired homeowner couple living in Melbourne. They own their primary family home (100% exempt from Centrelink assets testing) and hold $520,000 in superannuation and bank deposits:
Threshold: $470,000 (excess: $50,000)
Taper reduction: -$150.00 / fn (-$3,900 / year)
Assets test result: $1,575.20 / fortnight
Deemed income $370.15 / fn, under the $372.00 free area, so the income test does not bind.
$50k redirected to home repairs and a funeral bond
Full rate on both tests: $1,725.20 / fn
Difference: +$3,900 / year in pension
Common ways assessable assets are reduced
These are the levers Australian retirees and their advisers most often look at. None of them is a shortcut: each one converts money you can spend today into something you can spend less freely, and each has its own rules. The pension effect in the right-hand column is derived from the taper rate this tool applies — $3.00 a fortnight, or $78.00 a year, for each $1,000 taken out of the assets test. Whether the trade is worth making depends on your circumstances, and the dollar caps below are indexed by Services Australia, so confirm the current figures before acting.
| Lever | Centrelink asset treatment | Effect on the assets test |
|---|---|---|
| 1. Repairs and improvements to the principal home | The principal home is an exempt asset under the Social Security Act 1991 | +$78 a year per $1,000 spent |
| 2. Funeral bonds and prepaid funerals | Exempt up to the funeral bond allowance, which Services Australia indexes each 1 July | +$78 a year per $1,000 inside the cap |
| 3. Superannuation held by a younger spouse | Super still in accumulation phase for a partner under Age Pension age is exempt from both tests | +$78 a year per $1,000 moved, until that partner reaches pension age |
| 4. Lifetime income streams that meet the annuity rules | Only part of the purchase price counts as an asset, with the assessed share stepping down at an older age | +$78 a year per $1,000 of the exempt portion |
| 5. Gifting to family | Works only inside the gifting limits — anything above them stays on your record as a deprived asset for five years and keeps being assessed and deemed | No effect above the limits |
The side benefit: the Pensioner Concession Card
Qualifying for even a small part-pension brings the Pensioner Concession Card with it. The card caps the co-payment on PBS prescription medicines and opens up concessions on council rates, water and energy bills, vehicle registration and public transport. The Commonwealth sets the PBS concessional co-payment; the rates, transport and registration concessions are administered by each state and territory, so what you actually save depends on where you live and is worth checking against your own state's concessions register rather than a national figure.
Frequently Asked Questions (Australian Age Pension & Super)
How does Centrelink decide between the Assets Test and Income Test?
Centrelink calculates your entitlement under both the Assets Test and the Income Test separately. Whichever test results in the lower pension payment is the one that legally determines your fortnightly benefit.
What are Centrelink Deeming Rates and how are they calculated?
Deeming is the set of rules Centrelink uses to calculate income from financial assets (savings, shares, super in pension phase). Regardless of the actual return your investments earn, Centrelink assumes your money earns a statutory rate (0.25% on balances up to threshold, 2.25% on excess balances).
What is the Centrelink Work Bonus for working seniors?
The Work Bonus allows Age Pensioners to earn up to $300 per fortnight from employment without it being assessed under the Income Test. Eligible pensioners also receive an upfront $4,000 Work Bonus income bank balance, allowing seasonal or casual employment income to remain 100% pension-free.
What this calculator does
This tool is for Australians at or approaching Age Pension age who want to know roughly where they sit before they lodge a claim or change how their money is held. You enter four things: whether you are single or a member of a couple, whether you own your home, how much you hold in superannuation and other financial investments, and how much you hold in other assessable assets such as an investment property, a car or a caravan. Two income fields cover employment earnings and non-financial income like rent or a foreign pension. The output is a fortnightly and annual payment estimate, the result of each means test side by side, which of the two is binding, and an indicator for the Pensioner Concession Card or the Commonwealth Seniors Health Card.
How the math works
Services Australia runs two tests and pays whichever produces the lower amount. The tool does the same. Under the assets test it adds your financial investments to your other assessable assets, subtracts the free area for your relationship and homeowner status, and reduces the maximum rate by $3.00 a fortnight for every $1,000 of the excess. Under the income test it first applies deeming to your financial investments — a lower rate on the balance up to the deeming threshold and a higher rate on everything above it — and converts that annual figure to a fortnightly one by dividing by 26. It then adds employment income above the Work Bonus and any other income, subtracts the income free area, and reduces the maximum rate by 50 cents in the dollar on what remains. Both tests floor at zero. The governing rules sit in the Social Security Act 1991 and are set out in plain language on the Services Australia Age Pension pages.
The rates this tool applies
Every figure the calculator produces comes from the rate table below, which is built into the page. Australian pension rates move twice a year, on 20 March and 20 September, while the free areas and deeming thresholds are indexed on 1 July. That means a rate table is only ever current for a few months at a time. Check these values against Services Australia before you rely on a result, and treat any difference as the calculator being out of date rather than Services Australia being wrong.
| Parameter | Single | Couple (combined) |
|---|---|---|
| Maximum rate per fortnight | $1,144.40 | $1,725.20 |
| Assets free area — homeowner | $314,000 | $470,000 |
| Assets free area — non-homeowner | $566,000 | $722,000 |
| Assets taper | $3.00 per $1,000 / fn | $3.00 per $1,000 / fn |
| Income free area per fortnight | $212.00 | $372.00 |
| Income taper | 50c per dollar | 50c per dollar |
| Deeming threshold | $62,600 | $103,800 |
| Deeming rates | 0.25% / 2.25% | 0.25% / 2.25% |
| Work Bonus per fortnight | $300 | $600 |
The tool models the couple rate as a combined figure and splits it evenly for the per-person display. It also applies deeming only to the superannuation and financial investments field, not to the other assessable assets field, which matches how Centrelink treats non-financial assets. The third relationship option, couple separated by illness or respite care, keeps the couple free areas and deeming threshold but pays each partner at the single maximum rate, which the tool combines to $2,288.80 a fortnight.
Worked example
Take Robyn, 68, single, who owns her unit in Adelaide outright. She has $340,000 left in an account-based pension, $25,000 of assessable contents and a car, and she still does two shifts a fortnight at a nursery for $500. Running those numbers through the tool:
- Assets test. Assessable assets total $365,000. The single homeowner free area is $314,000, leaving $51,000 of excess. At $3.00 per $1,000 that is a $153.00 reduction, so the assets test result is $1,144.40 − $153.00 = $991.40 a fortnight.
- Deeming. The first $62,600 of her $340,000 is deemed at 0.25% ($156.50 a year) and the remaining $277,400 at 2.25% ($6,241.50), giving $6,398.00 a year, or $246.08 a fortnight.
- Income test. The Work Bonus sets aside $300 of her $500 wage, so $200 is assessed. Total assessable income is $446.08 a fortnight; after the $212.00 free area, the remaining $234.08 reduces the pension at 50 cents in the dollar, a $117.04 cut. The income test result is $1,027.36 a fortnight.
- Result. The assets test is lower, so it binds. Robyn is paid $991.40 a fortnight, or about $25,776 a year, and holds a Pensioner Concession Card.
The instructive part is what happens next. Because the assets test is binding and her deemed income is nowhere near the free area, extra work would not cost Robyn a cent of pension until her earnings pushed the income test below $991.40 — but every $1,000 she adds to her savings costs her $78 a year. If you are weighing that kind of trade-off in another system, the pension and social security age calculator and the UK ISA vs SIPP comparison apply the same logic to different rulebooks.
Age Pension questions people actually ask
When can I claim the Age Pension in Australia?
Age Pension age is 67 for anyone born on or after 1 January 1957. You also have to satisfy the residence rules, which generally require ten years of Australian residence with at least five of those years in one continuous period. This calculator assumes you already qualify on age and residence and models only the means tests.
Is the Age Pension taxable in Australia?
The Age Pension is assessable income, but most pensioners pay no tax on it. The seniors and pensioners tax offset combined with the tax-free threshold usually reduces the liability to nil where the pension is the main source of income. Substantial rent, business profit or a foreign pension can change that, so check your position with the ATO or a registered tax agent.
Does selling my home increase my assessable assets?
Usually yes. The principal home is exempt from the Assets Test, but sale proceeds held in a bank account are financial assets that are both assessable and deemed. Services Australia can exempt proceeds you intend to put toward a new home for a limited period, and deeming can still apply to that money in the meantime.
What if my assets are above the cut-off and I get no pension?
A nil pension result does not always mean no support. The Commonwealth Seniors Health Card is income-tested only and ignores assets entirely, so many self-funded retirees still qualify. This calculator shows a Commonwealth Seniors Health Card indicator when the calculated pension is nil and assessable income sits under the card threshold built into the tool.
I worked in the United States. Does that affect my Age Pension?
Australia and the United States have a social security agreement that lets periods of coverage in one country help you qualify in the other and sets out how each country pays its benefit. Services Australia administers the Australian side. Any foreign pension you actually receive belongs in the Other Non-Financial Income field of this calculator, where it is assessed under the Income Test.
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Disclaimer
This page is educational and scenario-analysis material only. It is not financial advice, and it is not tax or legal advice. It does not take your objectives, financial situation or needs into account, and no outcome shown here is a promise of what Services Australia will pay you. Only Services Australia can determine your entitlement, and only a licensed Australian Financial Services (AFS) adviser can recommend a course of action for your circumstances. Age Pension rates, free areas, taper rates, deeming rates and card thresholds are indexed and change during the year, so confirm every figure against Services Australia or the ATO before acting on it.