The Australian Age Pension landscape has undergone significant changes throughout 2025, with the most recent adjustments taking effect around June and July 2025. These modifications represent the government’s ongoing commitment to ensuring pensioners can maintain their standard of living amid rising costs. Understanding these changes is crucial for current recipients and those approaching retirement age.
Current Age Pension Rates (March-September 2025)
Following the March 2025 indexation, the maximum Age Pension rates for the period from 20 March 2025 to 19 September 2025 are:
Singles: $1,149.00 per fortnight (approximately $29,874 per year) Couples (each): $866.10 per fortnight (approximately $22,519 per year)
Couples (combined): $1,732.20 per fortnight (approximately $45,037 per year)
These amounts include the pension supplement and energy supplement, providing a comprehensive support package for Australian retirees. The March 2025 increase saw singles receive an additional $4.60 per fortnight, while couples received a combined increase of $7.00 ($3.50 per person).
July 2025 Threshold Changes: A Game-Changer
On 1 July 2025, three important Age Pension limits changed, affecting all full Age Pension and part-Age Pension recipients. Minister for Social Services, Tanya Plibersek, announced these changes as further ‘cost of living relief’ for more than 2.4 million recipients of social security payments, with rates, thresholds and limits increasing by 2.4%.
Income Test Adjustments
The income test determines how much Age Pension you can receive based on your earnings. From July 1, 2025, singles can now earn $218 a fortnight, up $6 from $212, and still be eligible for the full pension. Couples can earn $380 a fortnight, up $8 from $372, and get the full amount.
Updated Income Thresholds (July 2025):
- Singles: Full pension cuts off at $218 per fortnight; part pension available up to $2,516 per fortnight
- Couples: Full pension cuts off at $380 per fortnight combined; part pension available up to $3,844.40 per fortnight
Assets Test Modifications
The assets test thresholds have also increased substantially. Single homeowners can now have assets of $321,500 and receive the full pension, up from $314,000. Couples can have $481,500, up from $470,000.
Updated Assets Test Limits (July 2025):
Homeowners:
- Singles: Full pension up to $321,500; part pension up to $704,500
- Couples: Full pension up to $481,500; part pension up to $1,059,000
Non-homeowners:
- Singles: Full pension up to $579,500; part pension up to $962,500
- Couples: Full pension up to $739,500; part pension up to $1,317,000
Eligibility Requirements Remain Steady
Despite the rate and threshold changes, the fundamental eligibility criteria for the Age Pension remain unchanged:
Age Requirements: The minimum age for entitlement to an Age Pension remains at 67, with no plans to further increase it. This applies to both men and women born after 1 January 1957.
Residency Rules: You must be an Australian resident and satisfy specific residency requirements, typically requiring at least 10 years of Australian residence.
Means Testing: All applicants must pass both income and assets tests, with the test resulting in the lower payment amount being applied.
The Work Bonus Advantage
Under the Work Bonus, pensioners can earn up to $300 of employment income in a fortnight without it affecting their pension. This incentive encourages older Australians to remain in the workforce while still receiving pension support.
The Work Bonus operates on a credit system, allowing pensioners to accumulate credits when they earn less than the threshold, which can then be used when they earn more. The maximum Work Bonus balance that you can accrue is $11,800.
Deeming Rates: Extended Freeze Provides Relief
One of the most significant developments for pensioners has been the extension of the deeming rates freeze. The freeze on deeming rates has been extended to 30 June 2026. Deeming rates, which are currently up to 2.25%, are used by Centrelink to assess how much income you make from your financial assets, including super.
This freeze continues to provide relief for retirees whose actual investment returns may be lower than the deemed rates, particularly in the current economic environment.
Commonwealth Rent Assistance Updates
Commonwealth Rental Assistance (CRA) has also been increased, albeit by a minute amount, providing additional support for pensioners in rental accommodation. This assistance is particularly valuable in major cities where housing costs continue to outpace pension increases.
Superannuation Changes Affecting Retirees
From 1 July 2025, the Super Guarantee rate will increase to its final legislated rate of 12%, up from 11.5%. While this primarily benefits current workers, it also affects the Transfer Balance Cap, which increases from $1.9 million to $2 million.
These changes may impact pension eligibility for some retirees with substantial superannuation balances, as higher super balances can affect assets test calculations.
What These Changes Mean for Different Groups
New Applicants
The increased thresholds mean more Australians may now qualify for at least a part pension. Those who previously missed out due to slightly exceeding the old limits should reassess their eligibility.
Current Recipients
Existing pensioners benefit from both the payment rate increases and the higher thresholds. Some may find their pension payments increase if they were previously affected by the means tests.
Working Pensioners
The combination of increased income thresholds and the continued Work Bonus provides greater flexibility for pensioners who choose to work.
Looking Ahead: September 2025 Review
The Age Pension rates will next potentially change on 20 September 2025. The Australian Bureau of Statistics evaluates the extent of the increase based on changes in the Consumer Price Index (CPI), Male Total Average Weekly Earnings, and the Pensioner and Beneficiary Living Cost Index.
While increases are not guaranteed, they are generally expected, as the last time Age Pension rates did not increase was in September 2020, which was the first time since 1997.
Transitional Pension Recipients
Some Age Pensioners in Australia remain on transitional pensions, which are paid to people who would otherwise be getting a lower payment after changes to the income test were introduced in 2009. These recipients also received increases in March 2025, though at slightly different rates.
Additional Benefits of Age Pension Receipt
Receiving the Age Pension provides access to numerous additional benefits through the Pensioner Concession Card, including:
- Bulk-billed GP visits
- Cheaper medicines through the Pharmaceutical Benefits Scheme
- Reduced public transport costs
- Energy concessions (varying by state)
- Council rate reductions
Practical Steps for Pensioners
Review Your Situation: With the updated thresholds, it’s worth reassessing your pension entitlement, even if you were previously ineligible.
Plan Your Finances: The increased asset limits provide more flexibility for financial planning without jeopardizing pension eligibility.
Consider Work Options: The enhanced Work Bonus and higher income thresholds create better opportunities for supplementing pension income through employment.
Stay Informed: Age Pension rules and rates change regularly, making it essential to stay updated on modifications that could affect your payments.
Final Words
The 2025 Age Pension changes represent a positive step toward supporting Australia’s retirees in an increasingly expensive environment. While the payment increases may seem modest, the enhanced thresholds for income and assets tests provide meaningful relief for many pensioners. The extended deeming rates freeze continues to protect retirees from the volatility of investment markets.
As Australia’s population ages and living costs continue to rise, these adjustments demonstrate the government’s recognition of pensioners’ financial pressures. However, ongoing advocacy for adequate pension levels remains important to ensure all older Australians can maintain dignity and financial security in retirement.
For personalized advice about your Age Pension entitlement, consider using the free calculators available through Services Australia or consulting with a qualified financial advisor who understands the complexities of the Australian retirement income system.