The Age Pension isn’t all-or-nothing. It tapers, on two dials: the assets test (what you own) and the income test (what you earn). Centrelink runs both, and pays you the lower result. Understand the two dials and most of the confusion disappears.
One note before the numbers: the thresholds below are indicative for 2025–26 and change every March and September. Treat them as the shape of the system, and check current figures with Services Australia before making decisions.
The assets test
Add up what you own — super, shares, cash, investment property, cars, caravans, household contents at garage-sale value. Your principal home is exempt, no matter its value.
Below a threshold (the ‘free area’), assets don’t reduce your pension at all. Indicatively, for a homeowner the full pension is available with assessable assets up to roughly $320,000 (single) or $480,000 (couple combined); non-homeowners get thresholds around $220,000 higher. Above the free area, the pension reduces by $3 per fortnight for every $1,000 of extra assets, tapering to zero at a cut-off of very roughly $700,000 (single homeowner) to $1.05m (couple homeowners).
The income test
Income includes wages, rent and — importantly — deemed income: Centrelink assumes your financial assets (bank accounts, shares, account-based super pensions) earn a set rate, regardless of what they actually earn. A small free area applies (roughly $200 a fortnight single, $380 combined for a couple); above it, the pension reduces by 50 cents per dollar of income. The Work Bonus lets pensioners earn several hundred dollars a fortnight from employment before it counts — a deliberate nudge toward exactly the kind of optional part-time work GLOW is about.
Whichever is lower wins
Centrelink calculates your pension under both tests and pays the smaller amount. In practice: retirees with substantial super are usually asset-tested; those with modest assets but ongoing earnings or rent are usually income-tested. Knowing which test binds you tells you which lever matters — spending or restructuring assets moves one dial, managing income moves the other.
What this means for your plan
Two takeaways. First, the pension is a genuine backstop: a couple who own their home can hold meaningful assets and still receive a part pension plus the concession card. Second, don’t contort your life around the tests decades in advance — thresholds, taper rates and deeming all shift with policy. Build the plan on your own assets (the GLOW way), and treat the pension as the safety net under it.
Want a quick read on where you’d land? Try the Age Pension estimator, and see how the pension interacts with your super.
Frequently asked questions
How much money can a pensioner have in the bank?
Bank balances count under the assets test alongside shares, super and other assets — there is no separate bank-account limit. A single homeowner could hold roughly $320,000 in total assessable assets (excluding the home) and still receive the full pension, with a part pension available up to around $700,000. Figures change twice a year, so always check the current thresholds with Services Australia.
Does my home count in the assets test?
No — your principal home is exempt, regardless of value. Homeowners do get lower asset-test thresholds than non-homeowners to partially reflect that.
Which test applies to me — assets or income?
Both are always calculated, and you receive the lower result. Retirees with larger balances are usually bound by the assets test; those with modest assets but ongoing earnings are more often bound by the income test.
Does super count in the pension tests?
Once you reach Age Pension age, yes — super counts as an asset and financial investments are deemed to earn income. Before pension age, a partner's accumulation-phase super is not counted.
This article is general information only and does not take account of your personal circumstances. It is not financial advice.