Do you qualify for the Federal Government Age Pension? Here we cover the eligibility requirements and how much you can expect to receive.
In Australia, the age at which workers can access the Age Pension is gradually increasing, so it is important to know where you stand.
Australians are eligible for the Age Pension from age 65 but from 1 July 2017, this will increase to 65 years and 6 months and will continue to increase by six months every two years, reaching age 67 by 2023.
To qualify for the Age Pension, you will need to meet the Government’s age and residence requirements. How much you get will depend on your income, assets and other circumstances.
For most people, the Age Pension will not be sufficient to achieve a comfortable lifestyle in retirement, so having a healthy superannuation balance at retirement is important.
As a guide, here are the current payments for those who are entitled to the full Age Pension. These numbers are reviewed by the Government annually.
|Single person||Couple living together||Couple separated due to ill health|
|Maximum basic rate||$788.40||$594.30 each||$788.40 each|
|Maximum pension supplement||$64.50||$48.60 each||$64.50 each|
|Clean energy supplement||$14.10||$10.60 each||$14.10 each|
|Total per fortnight||$867.00||$653.50 each||$867.00 each|
Starting 1 January 2017, the Federal Government plans to change the thresholds for the Age Pension asset test.
Currently a home owning couple with assets totaling $1,170,000, which does not include the family home, can still qualify for a part Age Pension but the plan is to reduce this threshold to $823,000, including any amounts in an account-based pension plan.
For home owning singles, the threshold will reduce from $788,250 to $547,000.
The taper rate, which is the rate at which the Age Pension decreases for every $1,000 of assets over the $375,000 threshold for home owning couples, is proposed to increase from $1.50 to $3.00.
For singles who own their own home, the threshold for tapering will be $250,000.
To offset the loss of pension income, these retires will now qualify for the Commonwealth Seniors Health Card which provides holders access to cheaper medicine, health services and subsidised electricity bills.
At the other end of the scale, a higher number of less wealthy retirees will now qualify for the full or an increase in the part Age Pension.
A single person who owns their own home will be able to have $250,000 in other assets, a rise of $48,000, while a couple who own their own home will have a new threshold of $375,000 in other assets, up from the current level of $286,500.
These changes mean that if you a member with a larger amount of assets and you are currently receiving a part Age Pension, you may need to draw more of your income from your superannuation. You may also need to re-visit your investment strategy to make sure you can continue to draw sufficient income to meet your expenses.
If you are a member with a smaller amount of assets other than the family home, you may now be able to rely on a part or full Age Pension to boost your regular income.