Your superannuation and the Age Pension interact in ways that many Australians don’t fully understand. The key rule: your super balance is generally not counted in the Age Pension means test while you are under pension age (67). But once you reach pension age, your super is assessed — and the rules differ depending on whether it’s in accumulation or pension phase.
Age Pension Age — What It Is
The Age Pension age in Australia is currently 67 for those born on or after 1 January 1957. This is separate from superannuation preservation age (60 for those born after 30 June 1964).
| Means Test Application | Applies From |
|---|---|
| Centrelink assets test (assessable assets) | Age Pension age (67) |
| Centrelink income test (deeming) | Age Pension age (67) |
| Super accumulation balance | Not assessed before pension age; assessed from pension age |
| Account-based pension (started before 1 Jan 2015) | Not assessed under deeming (grandfathered) |
| Account-based pension (started on/after 1 Jan 2015) | Assessed under deeming income test from pension age |
Before Age Pension Age (Under 67)
If you are under pension age and your super is in accumulation phase (i.e. you haven’t started drawing it), it is not counted in either the assets test or the income test for Centrelink payments.
This means a 62-year-old who has retired early with a $1 million super balance in accumulation may still be eligible for some Centrelink payments (such as JobSeeker or the Age Pension — though the latter requires reaching pension age 67).
Important nuance:
- This exemption applies to super in accumulation phase while you are under pension age
- If you have started an account-based pension (drawing from super), that account is included in the means test even if you are under pension age
From Age Pension Age (67+)
Once you reach pension age, all your super — whether in accumulation or pension phase — is counted in the means test.
Assets Test
| Asset | How Assessed |
|---|---|
| Super in accumulation (age 67+) | Counted as a financial asset at current market value |
| Account-based pension balance (age 67+) | Counted as a financial asset at current balance |
| Principal place of residence | Exempt — not counted regardless of value |
| Investment property | Counted at market value |
| Shares and managed funds | Counted at market value |
Assets test thresholds (FY2025–26, approximate):
| Situation | Full Age Pension (below) | Part Age Pension (below) |
|---|---|---|
| Single homeowner | ~$314,000 | ~$686,000 |
| Couple (combined) homeowner | ~$470,000 | ~$1,038,000 |
| Single non-homeowner | ~$566,000 | ~$938,000 |
| Couple (combined) non-homeowner | ~$722,000 | ~$1,290,000 |
These are approximate thresholds for FY2025–26. The exact thresholds are indexed quarterly. Source: Services Australia.
The pension reduces by $3 per fortnight for every $1,000 of assets above the lower threshold (the “assets test taper rate”).
Income Test and Deeming
For financial assets (including super in accumulation and account-based pensions started from 1 January 2015), Centrelink does not use your actual income or return — it deems you to be earning a set rate of return regardless of what the account actually earns.
Deeming rates (FY2025–26):
| Asset | Deeming Rate |
|---|---|
| First $62,600 (single) / $103,800 (couple combined) | 0.25% |
| Amounts above these thresholds | 2.25% |
Deeming rates are set by the government and can change. Check Services Australia or the ATO for current rates.
Example: A single retiree with $400,000 in an account-based pension is deemed to earn:
- 0.25% × $62,600 = $156.50 per year
- 2.25% × ($400,000 − $62,600) = $7,591.50 per year
- Total deemed income: $7,748 per year (~$298 per fortnight)
This deemed income is counted in the income test, regardless of what the account actually earns.
The Income Test Pension Reduction
The pension reduces by 50 cents per fortnight for every dollar of income above the income-free threshold:
- Single: ~$212 per fortnight income-free
- Couple: ~$372 per fortnight combined income-free
Account-Based Pensions — Grandfathering
Account-based pensions (ABPs) started before 1 January 2015 are grandfathered — they are not subject to deeming. The actual payments drawn from the pension are used as the income figure (not a deemed rate). This is more favourable when actual drawdown is less than what deeming would calculate.
ABPs started on or after 1 January 2015 are assessed under deeming for both new and existing recipients. If you commenced your pension before that date and have maintained continuous payment without taking a lump sum payment, the grandfathering rules continue to apply.
Transition to Retirement (TTR) Pensions and Centrelink
A TTR pension commenced before age 67 is generally not counted in the assets or income test until you reach pension age. Once you reach 67, the TTR account is included as a financial asset and subject to deeming.
Super Death Benefits and Centrelink
If you receive a super death benefit pension following the death of your spouse, that pension counts in the Centrelink means test (similar to an account-based pension started after 1 January 2015 — subject to deeming).
Strategies Related to Super and the Age Pension
Several general strategies exist around the super–Centrelink interaction, particularly for retirees approaching pension age. These are complex and highly dependent on individual circumstances. In general:
- Timing of drawing down super relative to pension age can affect assessable assets
- Spending super in the window between retirement (age 60+) and pension age (67) reduces assessable assets — though the money spent must genuinely be spent, not transferred to a partner or given away (deprivation rules apply)
- Non-assessable assets like the principal residence are not counted — paying off a mortgage with super proceeds can shift assessable assets to a non-assessable form
These strategies involve Centrelink rules, deprivation provisions, and the interaction of multiple factors. Specialist financial advice is strongly recommended for anyone optimising the Age Pension and super interaction.
Frequently Asked Questions
My super is $400,000 and I’m 65 and retired but under 67. Does it affect the Age Pension? If you are under 67 and your super is in accumulation phase (not an account-based pension), it is not currently assessed in the means test. However, if you have started drawing from it as an account-based pension, it is assessed. At 67, your accumulation balance will be included in the assets and income tests.
What if I put money into my partner’s super — does it reduce the means test? Super in the name of a partner who is under pension age is generally not assessed. If one partner is under pension age, this can be a legitimate strategy for couples where one is already at pension age. However, Centrelink’s deprivation rules can apply if transfers are structured to deliberately reduce assessable assets.
Does the family home count in the Age Pension assets test? No. The principal place of residence is fully exempt from the Age Pension assets test regardless of value. However, this exemption doesn’t extend to investment properties, holiday homes, or other real estate.
I have $800,000 in super — will I get any Age Pension? This depends on your total assets (including super, shares, investment properties, etc.), your housing status, and your income. For a single homeowner in FY2025–26, the assets threshold for any Age Pension is approximately $686,000. An $800,000 super balance alone (as a single homeowner) would likely mean no Age Pension — but the exact outcome depends on all your assets. The thresholds for couples are higher.
See also: Super Strategies. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.