The federal government has announced some important changes to the Age Pension. One will affect all age pensioners, and the other will affect those who may want or need to work.
All of these annual changes reflect the rising cost of living in Australia, with the latest annual inflation rate of 6.1% being the highest recorded figure since 1990.
Changes to Age Pension Rates
The table below outlines the increase to the maximum Age Pension rates that will take effect on 20 September. The maximum fortnightly rate for eligible singles will increase by $38.90 and the maximum rate for each eligible partner in a couple living together will increase by $29.40 per fortnight.
| Current Maximum Age Pension Rate per Fortnight | Maximum Age Pension Rate per Fortnight from 20 September 2022 | |
|---|---|---|
| Singles | $987.60 | $1,026.50 |
| Couples (each partner) | $744.40 | $773.80 |
Changes to Age Pension assets and income test thresholds
There will also be increases to the Age Pension assets and income test thresholds in September. The maximum asset thresholds to be eligible for the Age Pension from September for Australian residents are outlined below.
| Current Maximum Asset Limit | Maximum Asset Limit from 20 September 2022 | |
|---|---|---|
| Single homeowner | $609,250 | $622,250 |
| Single non-homeowner | $833,750 | $846,750 |
| Homeowner couple (combined) | $915,500 | $935,000 |
| Non-homeowner couple(combined) | $1,140,000 | $1,159,500 |
| Homeowner couple (combined) but only one partner eligible | $915,500 | $935,000 |
| Non-homeowner couple (combined) but only one partner eligible | $1,140,000 | $1,159,500 |
| Illness-separated homeowner couple (combined) | $1,077,500 | $1,103,500 |
| Illness-separated non-homeowner couple (combined) | $1,302,000 | $1,328,000 |
The maximum fortnightly income thresholds to be eligible for the Age Pension from September for Australian residents are outlined below.
| Current Maximum Income Threshold per Fortnight | Maximum Income Threshold from 20 September 2022 | |
|---|---|---|
| Singles | $2,165.20 | $2,243 |
| Couples (each partner) | $3,313.60 | $3,431.20 |
| Couples separated by illness | $4,286.40 | $4,442 |
However, there is also a one-off income credit that Age Pensioners will be able use this financial year to reduce their income for the purposes of the income test. This credit is outlined in more detail below.
Changes to Pensioner Work Options
Age Pensioners will be able to earn an additional $4,000 from working this financial year without losing any Age Pension. This credit is only available for the 2022-23 financial year.
This $4,000 credit will increase the minimum amount that Age Pensioners can earn before their Age Pension is affected to $11,800 (previously $7,800) – known as the Work Bonus. Work can be done in short stints or over the course of the year. The credit is designed to assist the current labour market shortage as well as to enhance the income earning potential of Age Pensioners with the current cost of living being so high.