Australia’s Age Pension system is undergoing a major overhaul in 2025, offering a wave of relief and opportunity to more than 2.6 million older Australians.
With rising inflation and financial pressures on retirees, the federal government has stepped in with significant increases in payment rates, expanded income thresholds, adjusted asset limits, and greater access to concession cards.
If you’re receiving the Age Pension, nearing retirement, or helping someone manage their finances, here’s everything you need to know.
What is the Age Pension?
The Age Pension is a government-funded income support provided to older Australians who meet specific age, residency, and financial criteria. Administered by Services Australia through Centrelink, it helps retirees cover essential expenses like housing, healthcare, groceries, and utilities.
As of April 2025, approximately 2.6 million Australians rely on the Age Pension as a primary or supplementary source of income.
Key Changes to the Age Pension in 2025
The following reforms are effective between April and July 2025, aiming to address cost-of-living challenges and promote financial stability for seniors.
1. Increase in Pension Rates
The Age Pension payments have increased, aligned with the March 2025 indexation.
| Recipient Type | Old Rate (per fortnight) | New Rate (April 2025) | Increase |
|---|---|---|---|
| Single | $1,096.70 | $1,116.30 | $19.60 |
| Couple (combined) | $1,653.40 | $1,682.80 | $29.40 |
These figures include the Pension Supplement and Energy Supplement and reflect rising expenses across categories like medical costs, rent, and groceries.
2. Updated Income Test Thresholds
To help seniors earn more without reducing their pensions:
- Singles can now earn up to $204 per fortnight (up from $190).
- Couples can earn up to $360 per fortnight (up from $336).
Any income above these thresholds reduces the pension by 50 cents per dollar earned.
3. Deeming Rate Freeze Extended
Deeming rates are how Centrelink estimates income from financial assets:
- Lower deeming rate: 0.25%
- Upper deeming rate: 2.25%
These rates will remain frozen until 30 June 2025, helping pensioners retain more benefits by keeping their “assessed income” low—even if they earn more through savings or investments.
4. Asset Test Adjustments (From July 2025)
More Australians will now qualify for a full or part pension under revised asset thresholds:
| Situation | New Asset Threshold (July 2025) |
|---|---|
| Single Homeowner | $301,750 |
| Couple Homeowners | $451,500 |
| Non-Homeowners | Higher thresholds apply |
These changes are timely, especially as seniors face rising housing costs and living expenses in retirement.
5. Expanded Access to Commonwealth Seniors Health Card
Previously ineligible older Australians may now qualify for the Commonwealth Seniors Health Card (CSHC) due to relaxed income limits:
- Single income limit: Below $95,400
- Couple combined income limit: Below $152,640
Benefits of this card include:
- Discounted prescriptions
- Bulk-billed doctor visits
- Reduced energy and utility costs
6. Work Bonus Remains in Place
The Work Bonus continues to allow pensioners to earn up to $300 per fortnight from employment without affecting their Age Pension.
Additionally, the Work Bonus balance of up to $7,800 per year provides flexibility for casual or seasonal workers.
Why These Changes Matter
- Higher Payments: Seniors receive more money in each payment cycle.
- Greater Earning Capacity: New thresholds allow more income without pension reduction.
- Wider Eligibility: Adjusted income and asset tests help more Australians qualify.
- Improved Access to Concessions: The expanded CSHC helps with medical and utility expenses.
These changes aim to preserve dignity, security, and financial independence for seniors in an increasingly expensive environment.
What You Should Do Now
Review your Centrelink profile via myGov
Update your income and asset details
Check eligibility for new benefits like the CSHC
Use Centrelink’s calculators to estimate updated pension amounts
Consult a Financial Information Service Officer for tailored advice
The 2025 Age Pension reforms offer meaningful upgrades for Australia’s seniors, including higher payments, relaxed eligibility rules, and greater flexibility to work and save.
These updates are not just technical policy changes—they’re lifelines for millions of older Australians. Stay informed, take advantage of the new rules, and secure the maximum benefits you’re entitled to.
FAQs
Do I need to reapply for the Age Pension after these changes?
No. If you’re already receiving the Age Pension, these changes are applied automatically. Just make sure your details are up to date.
Can I earn money without losing my pension?
Yes. You can earn up to $204 (single) or $360 (couple) per fortnight before reductions apply. Work Bonus allows extra earnings without penalty.
When will the new rates and rules take effect?
New rates are effective from 20 April 2025, and asset test changes roll out from 1 July 2025.