The fortnightly Age Pension payment landing in the bank account this month will look slightly different for many older Australians, thanks to the twice-yearly indexation that lifts payment rates each 20 March and 20 September. For anyone who has ever checked a Centrelink statement and wondered whether the number in front of them is actually correct, this is the moment those figures reset.
Knowing the current maximum rates, and how the income and assets tests work, makes it possible to check a payment against the rules rather than take it on faith. Here is what the settings are, who they apply to, and where to confirm the exact figures for an individual circumstance.
What are the current fortnightly rates?
The maximum basic rate is $1,100.30 a fortnight for a single person, $829.40 each for a couple living together (a combined $1,658.80), and $1,100.30 for a member of a couple living apart because of ill health.
On top of the basic rate sits the Pension Supplement – $86.50 for singles, $65.20 each for couples ($130.40 combined) – and the Energy Supplement, worth $14.10 for singles and $10.60 each for couples ($21.20 combined). Added together, the maximum fortnightly rate before tax comes to $1,200.90 for a single person and $1,810.40 for a couple.
Who qualifies for the Age Pension?
Eligibility rests on three settings: age, residency and the two means tests. A person needs to be 67 years or older, normally an Australian resident for at least 10 years, and within the limits set by both the income test and the assets test.
Both tests are applied to every claim, and whichever one produces the lower payment is the rate actually paid. That is why two people with similar superannuation balances can end up on different pension rates if their income differs, or the reverse.
How does the income test reduce the payment?
A single age pensioner keeps the maximum rate on income up to $226 a fortnight. Above that free area, the pension reduces by 50 cents for every dollar earned.
For a couple, the combined free area is $396 a fortnight, and each partner’s pension reduces by 25 cents for every dollar of combined income above that line. Income for this purpose includes deemed earnings from financial assets such as savings, shares and superannuation, calculated using deeming rules rather than the person’s actual investment returns – a distinction that can produce a different figure than a bank statement would suggest.
What about couples apart, transitional rates and reporting income?
Couples who live apart because of ill health are assessed under the same basic rate as a single person, $1,100.30 a fortnight, reflecting the cost of running two households rather than one.
Some people who were already receiving a part Age Pension on 19 September 2009 remain on a transitional rate, tapered against income at 40 cents per dollar above the single free area rather than the current tapers, until the standard rate eventually catches up.
Employment income has to be reported by the pensioner, and any partner, even when it sits below the cut-off point that would actually reduce the payment. Payslips are not required unless Services Australia asks for them.
When do the rates change again, and how to check the current figure?
Rates and thresholds move twice a year, on 20 March and 20 September, set by the Department of Social Services. Anyone wanting to confirm their own rate, or check the current settings directly, can do so through Services Australia, including via myGov or the Centrelink phone line.
For most people watching the deposit land this month, the value of indexation is not just the extra few dollars – it’s knowing exactly why the number changed, and having somewhere reliable to check it if it hasn’t.
