The Age Pension and super are designed to work together — but the interaction between them catches many retirees off guard. The more super you have, the less pension you may receive, but this does not mean having more super leaves you worse off. Understanding the interaction helps you plan for the best possible retirement income.
Age Pension basics (2025–26)
| Parameter | Single | Couple (combined) |
|---|---|---|
| Maximum fortnightly rate | $1,116.30 | $1,682.80 |
| Maximum annual rate | ~$29,024 | ~$43,753 |
| Age requirement | 67 | |
| Assets test lower threshold (homeowner) | $301,750 | $451,500 |
| Assets test upper threshold (homeowner) | $674,000 | $1,012,500 |
| Income test free area | $204/fortnight | $360/fortnight |
Rates are indexed and updated in March and September each year.
How super affects the Age Pension
Once you reach Age Pension age (67), your super is assessed under both the assets test and the income test. The test that produces the lower pension rate is the one that applies.
Assets test
Your super balance (whether in accumulation or pension phase) counts as an asset. Your family home is excluded. For every $1,000 of assets above the lower threshold, your pension reduces by $3.00 per fortnight (single) or $4.50 per fortnight (couple, combined).
Income test (deeming)
Your super balance in pension phase is subject to deeming rules. The government assumes your financial assets (including super in pension phase) earn a deemed rate of return, regardless of what they actually earn:
- First $60,400 (single) / $100,200 (couple): deemed at 0.25%
- Above that: deemed at 2.25%
The deemed income is then tested against the income test free area. For every $1 of assessed income over the free area, pension reduces by 50 cents (single) or 25 cents each (couple).
Does having more super always mean less pension?
Yes, having more super generally reduces your pension — but you're still better off overall. A retiree with $500,000 in super and a partial pension has significantly more total income than a retiree with $200,000 in super and a full pension. The pension reduction is always less than the extra income from the super.
Strategies to optimise pension + super
- Spend down or gift before Age Pension age: Reducing assessable assets before age 67 can increase your pension entitlement. But the gifting rules limit you to $10,000/year (max $30,000 over 5 years) — amounts above this are still counted as assets for 5 years.
- Contribute to super before retirement: Building a larger super balance provides higher total retirement income even if it reduces the pension.
- Home renovations: Spending on your home (exempt asset) before Age Pension age reduces assessable assets.
- Seek financial advice: The interactions between super, pension, and tax are complex. A financial adviser can model your specific situation.
Commonwealth Seniors Health Card
If you don't qualify for the Age Pension (because your super is too high), you may still qualify for the Commonwealth Seniors Health Card if your adjusted taxable income is below $95,400 (single) or $152,640 (couple). This provides cheaper medicines, bulk-billed GP visits, and other concessions. Since super withdrawals after 60 are tax-free, they don't count as taxable income — meaning many self-funded retirees qualify.
Related guides
- When can you access your super
- Transition to retirement strategies
- How super is taxed
- Super investment strategies