The Age Pension is Australia's primary retirement income safety net, providing financial support to around 2.6 million older Australians. Understanding the eligibility rules is essential for planning your retirement. This guide explains everything you need to know about qualifying for the Age Pension in 2026.
Age Pension Age in 2026
The Age Pension age is 67 years for anyone born on or after 1 January 1957. This is the age at which you can first apply for the Age Pension.
You can apply up to 13 weeks before you reach Age Pension age to avoid delays in receiving your first payment. This is important — if you wait until your 67th birthday to apply, you may have to wait several weeks before your first payment arrives.
Residency Requirements
To qualify for the Age Pension, you must:
- Be an Australian resident (citizen, permanent resident, or holder of certain visa subclasses)
- Have lived in Australia for at least 10 years in total
- Have at least 5 years of continuous residence in Australia
Time spent overseas may count towards your residency requirement if you were an Australian resident when you left. Australia also has social security agreements with many countries (including the UK, New Zealand, Italy, Greece, and others) that may allow time worked in those countries to count towards Australian residency requirements.
The Income Test
The income test determines whether you receive the full Age Pension, a part pension, or no pension at all. From 20 March 2026, the income test thresholds are:
| Situation | Free area (full pension) | Cut-off (no pension) |
|---|---|---|
| Single | $218/fortnight | $2,619.80/fortnight |
| Couple (combined) | $380/fortnight | $4,000.80/fortnight |
Above the free area, the pension reduces by 50 cents for every dollar of income. This is called the taper rate.
What counts as income?
Income includes:
- Employment income (wages, salary, self-employment)
- Deemed income from financial assets (bank accounts, shares, managed funds)
- Rental income from investment properties
- Income from overseas pensions
- Boarder or lodger income
Income does not include:
- The family home
- Rent Assistance
- Most government payments
- Irregular one-off payments (in most cases)
Deeming rates
Financial assets (bank accounts, shares, managed funds, superannuation in pension phase) are assessed using deeming rates — a set rate of return that Centrelink assumes you earn on your financial assets, regardless of what you actually earn. The current deeming rates are:
- 0.25% per year on the first $62,600 (singles) or $103,800 (couples)
- 2.25% per year on the remainder
The Work Bonus
Age Pension recipients can earn up to $300 per fortnight from employment or self-employment without it counting towards the income test. This is the Work Bonus. Unused Work Bonus amounts accumulate in a Work Bonus balance (up to $11,800), which can offset future employment income.
The Assets Test
The assets test assesses the value of your assets to determine your pension entitlement. From 20 March 2026:
| Situation | Full pension (below) | No pension (above) |
|---|---|---|
| Homeowner, single | $321,500 | $722,000 |
| Non-homeowner, single | $579,500 | $980,000 |
| Homeowner, couple | $481,500 | $1,085,000 |
| Non-homeowner, couple | $739,500 | $1,343,000 |
Between the lower and upper thresholds, the pension reduces by $3 per fortnight for every $1,000 of assets above the lower threshold.
What counts as assets?
Assets include:
- Bank accounts and cash
- Shares, managed funds, and other financial investments
- Superannuation (once you reach Age Pension age)
- Investment properties (at market value)
- Vehicles, boats, caravans
- Household contents and personal effects (at a reasonable estimate)
- Business assets
Assets do not include:
- Your principal home (the family home)
- Prepaid funeral expenses (up to $13,500)
- Some compensation payments
Strategies to Maximise Your Age Pension
There are several legal strategies that may help you qualify for the Age Pension or increase your payment:
1. Spend down assets before reaching pension age
If your assets are above the threshold, spending on legitimate items (home improvements, prepaid funeral, travel) before reaching pension age can reduce your assessable assets. However, Centrelink has "gifting rules" — you can only gift $10,000 per financial year (and $30,000 over 5 years) without it affecting your pension.
2. Invest in your home
Since the family home is not counted as an asset, investing in home improvements or renovations can reduce your assessable assets while improving your quality of life.
3. Use the Work Bonus
If you want to work part-time in retirement, the Work Bonus allows you to earn up to $300/fn from employment without affecting your pension. Unused Work Bonus accumulates (up to $11,800), so if you haven't worked recently, you may have a large balance available.
4. Consider a funeral bond
Prepaid funeral expenses up to $13,500 are exempt from the assets test. Investing in a funeral bond or prepaid funeral plan can reduce your assessable assets.
How to Apply for the Age Pension
Apply through myGov at least 13 weeks before you reach Age Pension age. You will need:
- Proof of identity (passport, birth certificate, or Australian citizenship certificate)
- Tax file number
- Bank account details
- Details of all income and assets (including superannuation statements)
- Residency evidence if you have lived overseas
See our Age Pension rates and eligibility page for the latest payment rates and full details.