How Much Can You Earn and Still Get the Age Pension?

Many Australians continue earning income in retirement.

You may receive money from:

• Part-time work

• Superannuation pensions

• Investments

• Rental property

However, the Age Pension is means-tested, meaning your payment depends on both your income and assets.

The income test determines how much you can earn before your Age Pension begins to reduce.

(All figures are subject to change under current Services Australia rules.)

How the Age Pension Income Test Works

Under the income test, your pension payment reduces when income exceeds a certain threshold.

The government sets two key thresholds:

• Income-free area (you can earn this amount without affecting your pension)

• Taper rate (the reduction applied once income exceeds the threshold)

Current Income Test Thresholds (Guide)

If your income exceeds these amounts, your Age Pension reduces.

The reduction rate is:

50 cents for every $1 above the threshold.

Example: Single Pensioner

Emma receives the Age Pension and earns additional income.

The exact payment depends on total income assessed by Services Australia.

What Income Counts Under the Age Pension Test?

The income test includes many types of income.

Examples include:

• Employment income

• Superannuation pensions

• Investment income

• Rental income

• Deemed income from financial assets

Even if your investments do not generate actual income, deeming rules may still apply.

Understanding Deeming Rules

Services Australia uses deeming rates to estimate income from financial assets such as:

• Bank accounts

• Shares

• Managed funds

This means income may be assessed even if the investment return is lower.

Deeming rates are set by the government and may change over time.

Working While Receiving the Age Pension

Many retirees continue working part-time.

The Work Bonus allows eligible pensioners to earn employment income without immediately reducing their Age Pension.

Key features include:

• A portion of employment income may be exempt from the income test.

• Unused amounts may accumulate over time.

This allows older Australians to remain in the workforce without losing pension benefits immediately.

Rules are subject to Services Australia guidelines.

The Assets Test Also Matters

Your Age Pension entitlement is determined by both:

• Income test

• Assets test

The test that results in the lower payment determines your pension.

Assets assessed may include:

• Investments

• Superannuation (after Age Pension age)

• Property other than your principal residence

Your home is generally exempt from the assets test.

Example Scenario

David and Lisa are retired homeowners.

They have:

• $450,000 in financial assets

• $20,000 annual income from investments

Services Australia assesses their entitlement using:

• Income test (based on deemed income)

• Assets test (based on total assets)

Their Age Pension payment will be determined by whichever test reduces it more.

Strategies to Manage Age Pension Eligibility

Some retirees structure their finances carefully to remain eligible for partial pension benefits.

Common strategies include:

Structuring Superannuation

Moving funds into tax-efficient super pension structures may improve retirement income sustainability.

Managing Asset Allocation

Asset levels relative to Age Pension thresholds can influence eligibility.

Timing Income Withdrawals

Coordinating withdrawals from super and investments may affect income test outcomes.

All strategies must comply with current government rules.

Why the Age Pension Still Matters

Even a part Age Pension can be valuable.

Benefits may include:

• Regular income support

• Concession cards

• Reduced healthcare costs

• Energy and transport discounts

For many retirees, the Age Pension acts as a financial safety net.

FAQs

1. How much income can you earn before losing the Age Pension?

A single pensioner can earn around $204 per fortnight before payments start reducing under the income test (subject to current Services Australia thresholds).

2. Can you work and still receive the Age Pension?

Yes. Many retirees work part-time while receiving Age Pension payments.

3. Does super count as income for the Age Pension?

Super in pension phase is assessed under deeming rules for the income test.

4. What is the Age Pension taper rate?

Payments reduce by 50 cents for every $1 of income above the threshold.

5. Do savings affect the Age Pension?

Yes. Savings and financial investments count under both the assets test and deeming rules.

6. Is the family home counted for Age Pension eligibility?

Your principal residence is generally exempt from the assets test under current Services Australia rules.

Understand How Income Affects Your Age Pension

Many retirees assume earning additional income will automatically eliminate their Age Pension.

In reality, the interaction between income, assets and pension rules can be more nuanced.

At What If Advice, we help Australians model retirement income scenarios and understand how Age Pension rules apply under current Services Australia guidelines.

If you want clarity on how much income you can earn while maintaining pension eligibility, strategic advice can help.

Book an Age Pension strategy consultation with What If Advice.

General Advice Disclaimer

This article provides general information only and does not take into account your personal objectives, financial situation or needs. Before making financial decisions, consider whether the information is appropriate to your circumstances and seek personal advice from a licensed financial adviser. Age Pension, taxation and superannuation rules are subject to change under current Services Australia and ATO regulations.