Maximising your pension while managing additional income can be challenging, but there are several strategies that can help.
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How much can you earn and still get Age Pension payments?
Understanding the Age Pension income test, and how it works, is important for all Australian retirees as it’s one of the key factors in determining how much Age Pension you can receive.
Managed by Centrelink, the Age Pension income test looks at your income from various sources, such as:
- Work
- Superannuation
- Investments
Centrelink uses deeming to determine how much income your financial assets produce. From there, it decides how much Age Pension you’ll receive every fortnight.
Not sure where to begin?
Our Retirement Centre can provide one-on-one support and answer the questions you might be too shy to ask. Our services are available to all.
How the Age Pension income test works
Your income is assessed on a fortnightly basis. If you exceed the income limit, your pension will be reduced accordingly.
Standard rules for the income test
The income test provides a ‘free area’, which means you can earn a certain amount before your pension starts to reduce.
How much can I earn on the Age Pension?
When working out how much you can earn while receiving the Age Pension, the government takes into account your total income from work, superannuation, and other investments.
How much you can earn from various sources varies based on whether you’re single or part of a couple.
If you’re single:
- You can earn up to $212 per fortnight without impacting your pension. For every dollar earned over $212, your pension is reduced by $0.50.
If you’re a couple:
- You and your partner can have a combined income of up to $372 per fortnight before your pensions are affected. For every dollar earned over $372, each member’s pension is reduced by $0.25.
Note that the Work Bonus may impact these numbers. You can read more about it below.
Other items to consider
The Work Bonus
The Work Bonus allows pensioners to earn up to $11,800 per year from salary or wages before it affects their Age Pension. As the Age Pension is paid fortnightly, the work bonus is applied at $300 per fortnight, meaning that the first $300 of fortnightly income from work is not counted under the income test. If you earn less than $300 in the fortnight, the unused amount is accrued (referred to as an income bank) meaning that you can exceed $300 in subsequent fortnights until that accrued amount is used up.
Deemed income
When working out your earnings from your super savings and other investments, Centrelink uses deeming rates to estimate your income, rather than your actual earned income from investments, or your super drawdown amounts.
Income payments from super
Your regular income payments or withdrawals from your super savings aren’t included in the Age Pension income test, only the amount of deemed income your super investments are estimated to earn. It’s a good idea to factor in your Age Pension payments when calculating how much to draw from your super.
Your retirement questions answered
A financial planner can take the guesswork out of retirement. Book a time for an initial conversation and we can help you map out your retirement goals, supporting services, and next steps.
This initial appointment is obligation free and available to all fund members at no additional charge.
Book a time to talk to our advice team or call us on 1800 065 753
Have a general enquiry? Contact our Helpline.
How much can I earn before my Age Pension stops entirely?
The income cut-off point is the maximum income you can earn before your pension payments stop for a fortnight.
If your income exceeds the cut-off point in any fortnight, you won’t receive any pension for that period. However, your payments can resume if your income dips below the cut-off point in subsequent fortnights.
Single: $2,500.80 per fortnight.
Couple living together (combined): $3,822.40 per fortnight.
Couple living apart due to ill health (combined): $4,949.60 per fortnight.
Transitional rate pensioner (single): $2,564.75 per fortnight.
Transitional rate pensioners – couple living together (combined): $4,168.50 per fortnight.
Transitional rate pensioners – couple living apart due to ill health (combined): $5,077.50 per fortnight.
Note, if you’re eligible for the Work Bonus, your cut-off points may be higher than the above.
It’s important to note that the cut-off point can vary depending on individual situations. Before making any decisions, you should talk to a financial planner
The income test is regularly updated to reflect economic changes, inflation, and cost of living. One of the key changes for 2024 has been the increase in the Work Bonus annual balance to $11,800. This has meant that pensioners can earn more without their Age Pension being impacted.
Financial strategies to stay within income limits
Maximising your pension while managing additional income can be challenging, but there are several strategies that can help.
If you’d like to discuss the best strategy for you, book a chat with one of our financial planners. Here are some suggested strategies to help get you started:
The Work Bonus lets you earn up to $300 per fortnight before the earnings are factored into the Age Pension income test. This is a great way to increase your income without impacting your Pension payments. It can be particularly helpful if your work is irregular, as you can accrue any unused Work Bonus balance for future use during the year (up to the maximum of $11,800).
Certain investments, like annuities, may not count fully towards the income test. This can allow you to generate returns without affecting your pension eligibility. A financial planner can help you select investment products that align with your financial goals and pension considerations.
If you’re still working, salary sacrificing into your superannuation is another way to reduce your assessable income. This strategy can lower your taxable income while boosting your super balance, keeping you within the pension limits while preparing for a comfortable retirement.
Equip Super’s financial planners are experienced in retirement planning and can help you develop strategies to manage your income and maximise your pension. Whether it’s planning your super withdrawals, exploring investment options, or making use of the Work Bonus, our planners can offer expert guidance tailored to your needs.
Retirement income questions?
Use our Retirement Drawdown calculator to work out your optimum drawdown rate.
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Retirement income questions?
Use our Retirement Drawdown calculator to work out your optimum drawdown rate.
Frequently asked questions
If you’re single, you can earn up to $2,500.80 per fortnight and still receive a part pension. Couples can earn up to $3,822.40 combined. Transitional rate pensioners and those living apart due to ill health may have higher thresholds.
The income test assesses income from various sources, including wages, superannuation pensions, investments, rental income, and business income. Some foreign pensions and certain financial products are also included.
Yes, under the Work Bonus, the first $300 per fortnight of employment income is not counted in the income test. You can also build up a Work Bonus balance of up to $11,800, which allows you to offset future earnings without impacting your pension. This is great for seasonal or irregular work, as it allows you to earn more over a shorter period of time without affecting your pension payments, provided you stay under the $11,800 limit.
There is no limit on the number of hours you can work. What matters is the amount you earn, as income above $300 per fortnight may reduce your pension.
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