Australia’s pension system is seeing major updates starting May 20, 2025, as part of the government’s commitment to support retirees amid inflation and rising living costs.
Key changes include increased Age Pension rates, adjusted eligibility rules, new income and asset thresholds, and targeted cost-of-living payments.
Let’s break down all the essential updates, benefit amounts, eligibility rules, and smart ways to get the most out of your pension.
New Age Pension Rates (Effective May 20, 2025)
The government has increased fortnightly pension payments to help retirees handle essentials like groceries, medical bills, and utilities. Below is a detailed table outlining the new payment breakdown:
| Pension Type | Base Rate | Pension Supplement | Energy Supplement | Total Fortnightly Payment |
|---|---|---|---|---|
| Single | $1,051.30 | $83.60 | $14.10 | $1,149.00 |
| Couple (each) | $792.50 | $63.00 | $10.60 | $866.10 |
| Couple (combined) | $1,585.00 | $126.00 | $21.20 | $1,732.20 |
Cost-of-Living Relief Payments
To help offset inflation, the government is offering two one-off payments:
- $250 in May 2025
- $750 in June 2025
These lump sum payments aim to deliver short-term financial relief to those most impacted by rising expenses.
Updated Eligibility Criteria (May 2025)
To receive the Age Pension, applicants must meet the following:
1. Age Requirements
- 66 years and 6 months as of May 2025
- Increasing to 67 years from July 1, 2025
2. Residency Requirements
- Must be an Australian resident and reside in Australia for at least 10 years (with 5 consecutive years minimum).
Income Test Thresholds
Your pension amount is based on your fortnightly income. Exceeding certain limits will reduce your pension.
| Pension Type | Full Pension Income Threshold | Partial Pension Maximum Income |
|---|---|---|
| Single | Up to $212 | Up to $2,510 |
| Couple (combined) | Up to $372 | Up to $3,836.40 |
Your pension reduces by $0.50 for every $1 over the threshold.
Assets Test Limits
Assets are also assessed to calculate your pension eligibility.
Full Pension Thresholds
| Status | Homeowner | Non-Homeowner |
|---|---|---|
| Single | $314,000 | $566,000 |
| Couple (combined) | $470,000 | $722,000 |
Part Pension Thresholds
| Status | Homeowner | Non-Homeowner |
|---|---|---|
| Single | $697,000 | $949,000 |
| Couple (combined) | $1,047,500 | $1,299,500 |
Pension is reduced by $3.00 for every $1,000 of assets above the limit.
How to Maximize Your Pension Benefits
1. Work Bonus Scheme
- Earn up to $300 per fortnight without reducing your pension.
- Unused amounts go into a Work Bonus balance, up to $7,800 annually.
2. Reporting Changes Promptly
- Always update Centrelink if your income or asset status changes.
- Ensures your pension is correctly calculated and avoids over/underpayments.
3. Additional Support You Might Be Eligible For
- Commonwealth Seniors Health Card
- Rent Assistance
- Energy Supplement
- State-level rebates for electricity, water, and transport.
Alternatives If You’re Not Eligible
If you don’t qualify for the Age Pension:
- Apply for the Low Income Health Care Card
- Use the Commonwealth Seniors Health Card for discounted medical and pharmaceutical expenses.
What to Do Next
- Use the Centrelink Pension Estimator tool to determine your benefit amount.
- Check eligibility through the Services Australia website.
- Update your income and asset details using your myGov account.
- If you’re turning 66.5 in 2025, now is the time to prepare your documents.
The May 2025 Age Pension changes reflect the Australian government’s response to rising costs of living. With increased fortnightly payments, cost-of-living relief, and updated eligibility thresholds, retirees have more opportunities to better manage their finances.
To ensure you receive the maximum benefit, it’s crucial to stay informed, update your records, and take advantage of schemes like the Work Bonus and health concession cards.
FAQs
What age do I need to be to apply for the Age Pension in May 2025?
You must be 66 years and 6 months old. From July 1, 2025, the age increases to 67 years.
Can I still work and get the full Age Pension?
Yes, under the Work Bonus Scheme, you can earn up to $300 per fortnight without affecting your pension.
Will I get the $250 and $750 cost-of-living payments automatically?
Yes, if you’re eligible for the Age Pension, these payments will be made automatically in May and June 2025.