Australia’s Age Pension has seen important updates in 2025, impacting eligibility age, payment rates, and means-testing rules. From 20 September 2025, several changes come into effect aimed at adjusting pension payments in line with living costs amid shifting economic conditions. Understanding these new rules can help Australians better plan their retirement finances.
Pension Age Fixed at 67 Years
The Australian government maintains the qualifying age for the Age Pension at 67 years for both men and women. This age threshold has been stable since reaching 67 on 1 July 2023, with no further increases currently legislated. Individuals born on or after 1 January 1957 become eligible only when they reach this age. Applicants can apply up to 13 weeks before turning 67 for a seamless transition to the pension scheme.
Increased Payment Rates from September 2025
Starting 20 September 2025, the maximum Age Pension payments will rise due to the twice-yearly indexation process that considers the Consumer Price Index and wages growth. Single pensioners will receive an increase of $29.70 per fortnight, pushing the maximum payment to $1,178.70. Couples eligible for the pension will see a combined increase of $44.80 per fortnight, totaling $1,777.00. This boost comes as a welcome adjustment to help pensioners manage rising daily expenses.
Adjustments to Means Testing and Deeming Rates
One significant change is the increase in deeming rates applied to financial assets for the income means test, rising by 0.5 percentage points. This means the notional income assumed from the value of financial assets held is higher, which may reduce some pensioners’ entitlements. The cut-off points for part pensions have also been adjusted upwards in line with the new payment rates, aiming to keep more pensioners eligible for a portion of the pension.
Residency and Asset Thresholds Remain Key
To qualify for the Age Pension, applicants must meet Australian residency requirements and pass both income and assets tests. For singles who own their home, the full pension asset limit is $321,500, increasing for those who do not own property. Couples’ combined asset thresholds are similarly higher. These asset limits are also indexed regularly and were updated in line with the 20 September changes.
Australia Age Pension Key Figures 2025 (From 20 September)
| Category | Maximum Payment Per Fortnight | Increase Per Fortnight | Annual Equivalent |
|---|---|---|---|
| Single (full pension) | $1,178.70 | $29.70 | $30,646 |
| Couple (each) | $888.50 | $22.40 | $23,101 |
| Couple (combined) | $1,777.00 | $44.80 | $46,202 |
| Assets Test Limit (Homeowner) | $321,500 (single) / $481,500 (couple combined) | Indexed | – |
These changes highlight the government’s approach to balancing pension affordability with support for an ageing population. For many Australians approaching retirement, keeping track of pension age rules, payment rates, and means tests is essential for retirement planning. For those nearing 67, checking eligibility early and understanding the impact of these new rules can ensure timely access to entitlements.
With continuous indexation and periodic policy updates, staying informed on pension policy will remain crucial for current and future pensioners alike. This coverage is based on official pension updates as of September 2025 and presents the current framework for the Age Pension system in Australia.