Let me guess what you think about the Age Pension:

“I won’t get any. I own my home and have too much super.”

Or maybe:

“It’s too complicated. I’ll figure it out when I’m 67.”

Or possibly:

“The Age Pension is for poor people. I’m planning to be self-funded.”

If any of those sound like you, you’re leaving hundreds of thousands of dollars on the table.

I sit with Balmain locals every week who are shocked – genuinely shocked – to discover they qualify for Age Pension.

“But we own our home!”

“But we’ve got $700,000 in super!”

“But we’re not poor!”

Right. And you STILL qualify.

Here’s the thing about the Age Pension: It’s not welfare. It’s not charity. It’s an entitlement you’ve earned through 40 years of paying taxes.

And for most Balmain homeowners with $600,000-$900,000 in super, it’s worth $250,000-$500,000 over retirement.

That’s not pocket change. That’s life-changing money.

So let me strip away the complexity and show you exactly how the Age Pension works – no jargon, no political commentary, just the facts you need to know.

“The $1 Million Retirement Myth”

The Age Pension Basics (Start Here)

What Is the Age Pension?

The Age Pension is a fortnightly payment from the government to eligible Australians aged 67+.

As of 2025, the maximum rates are:

Singles: $1,144.40 per fortnight ($29,754/year)

Couples combined: $1,725.20 per fortnight ($44,855/year)

These amounts are indexed twice a year (March and September) and generally increase with inflation.

But here’s what most people miss: You don’t need to get the FULL pension for it to matter.

Even a PART pension of $10,000-$20,000/year is huge.

Who Qualifies?

To qualify for Age Pension, you need to meet:

1. Age requirement: 67 years old (as of 2025)
2. Residency requirement: Australian resident for 10+ years
3. Assets test: Your assets are below certain thresholds
4. Income test: Your income is below certain thresholds

The tricky part? Tests 3 and 4.

Let me break them down.

The Assets Test (This Is The Big One)

The assets test determines how much Age Pension you get based on what you OWN.

Here’s what counts as an asset:

✓ Super balance

✓ Bank accounts and cash

✓ Shares and managed funds (outside super)

✓ Investment properties

✓ Cars (except one primary vehicle)

✓ Boats, caravans, etc.

Here’s what DOESN’T count:

✗ Your primary home (this is HUGE)

✗ Your primary car

✗ Household contents and personal effects

Why Your Home Not Counting Changes Everything

This is the game-changer for Balmain locals.

Your home could be worth $2.5 million, $3 million, even $4 million – Centrelink doesn’t care.

It’s completely ignored in the assets test.

So a Balmain couple living in a $2.8M terrace with $650,000 in super is assessed exactly the same as someone in Blacktown living in a $600,000 house with $650,000 in super.

Both have $650,000 in assessable assets.

This is why so many Balmain locals are shocked they qualify.

“Balmain Property Prices and Your Retirement”

The Assets Test Thresholds (2025)

Homeowners (you own your home):

Singles:

• Under $314,000 in assets: Full Age Pension
• $314,000 – $704,500: Part Age Pension (tapers down)
• Over $704,500: No Age Pension

Couples:

• Under $470,000 in assets: Full Age Pension
• $470,000 – $1,002,000: Part Age Pension (tapers down)
• Over $1,002,000: No Age Pension

Non-homeowners (you rent):

Thresholds are ~$227,000 higher to account for lack of home ownership.

How the Taper Works

Here’s the critical bit:

For every $1,000 in assets over the lower threshold, your pension reduces by $3 per fortnight ($78/year).

Example (Balmain couple, homeowners):

Assets: $650,000 in super

Lower threshold: $470,000

Assets over threshold: $180,000

Pension reduction: $180,000 ÷ $1,000 × $78 = $14,040/year

Full pension: $44,855/year

Their pension: $44,855 – $14,040 = $30,815/year

That’s still over $30,000/year. Not nothing!

The Income Test (Less Important Than You Think)

The income test looks at your annual income to determine Age Pension eligibility.

But here’s the thing: For most retirees, the ASSETS test is more restrictive than the income test.

You get whichever test gives you LESS Age Pension. Usually, that’s the assets test.

What Counts as Income?

✓ Employment income (wages, salary)

✓ Rental income from investment properties

✓ Foreign pensions

✓ Deemed income from financial assets (more on this shortly)

What DOESN’T count:

✗ Super drawdowns (if you’re over 60)

✗ Most account-based pension payments

This is important: Your super income generally doesn’t count.

Deeming Rates (The Confusing Bit)

Centrelink doesn’t care what your investments ACTUALLY earn.

They apply “deeming rates” – assumed rates of return on your financial assets.

Current deeming rates (2025):

• 0.25% on first $62,600 for singles ($103,800 for couples)
• 2.25% on amounts above that

Example:

Couple with $650,000 in super

Deemed income:

• First $103,800 @ 0.25% = $260
• Remaining $546,200 @ 2.25% = $12,290
• Total deemed income: $12,550/year

This is VERY low compared to what they’re probably actually drawing from super ($35,000-$40,000/year).

That’s why the assets test usually bites harder than the income test.

Income Test Thresholds (2025)

Singles:

• Under $212/fortnight: Full pension
• $212 – $2,514/fortnight: Part pension
• Over $2,514/fortnight: No pension

Couples:

• Under $372/fortnight: Full pension
• $372 – $3,841/fortnight: Part pension
• Over $3,841/fortnight: No pension

Again: Most Balmain retirees fail the assets test before the income test.

Real Balmain Examples: What You’ll Actually Get

Let’s look at actual scenarios:

Example 1: The Couple with $600k Super

Situation:

• Own Balmain home (worth $2.7M – doesn’t count)
• Combined super: $600,000
• No other assets

Assets test:

• Assessable assets: $600,000
• Over threshold by: $130,000
• Pension reduction: $130,000 ÷ $1,000 × $78 = $10,140/year
• Full pension: $44,855
• Their pension: $34,715/year

Income test:

• Deemed income: ~$11,500/year
• Under threshold – PASSES income test

Result: $34,715/year Age Pension (assets test applies)

That’s nearly $35,000/year. Over 25 years: $868,000.

Example 2: The Couple with $850k Super

Situation:

• Own Rozelle apartment (worth $1.3M – doesn’t count)
• Combined super: $850,000
• $50,000 in bank accounts
• Total assessable assets: $900,000

Assets test:

• Over threshold by: $430,000
• Pension reduction: $430,000 ÷ $1,000 × $78 = $33,540/year
• Full pension: $44,855
• Their pension: $11,315/year

Result: $11,315/year Age Pension

Still worth $282,000 over 25 years. Not nothing!

Example 3: The Single Retiree with $580k Super

Situation:

• Own Balmain apartment (worth $950k – doesn’t count)
• Super: $580,000
• No other assets

Assets test:

• Assessable assets: $580,000
• Over threshold by: $266,000
• Pension reduction: $266,000 ÷ $1,000 × $78 = $20,748/year
• Full pension: $29,754
• Their pension: $9,006/year

Result: $9,006/year Age Pension

Over 25 years: $225,000. Still significant!

Strategic Positioning for Maximum Age Pension

Once you understand how it works, you can make strategic decisions to maximize your Age Pension.

[INTERNAL LINK: Link to “3 Retirement Planning Mistakes” (Blog #11) here]

Strategy #1: Timing Your Super Drawdowns

Your super balance affects your Age Pension entitlement.

As you draw down super, your assets reduce. Your Age Pension increases.

Example:

Age 67: $800,000 super → $18,000/year Age Pension

Age 72: $650,000 super → $29,700/year Age Pension

Age 77: $500,000 super → $42,000/year Age Pension

Your super is going down, but your total income (super + pension) stays relatively stable.

Strategy #2: Gifting to Adult Children

You can gift up to $10,000/year ($30,000 over 5 years) without affecting your Age Pension.

Beyond that, gifted amounts count as assets for 5 years.

Strategic gifting can help you drop below thresholds, but there are rules.

Strategy #3: Home Ownership vs Renting

Homeowners get lower asset thresholds but their home doesn’t count.

Non-homeowners get higher thresholds but pay rent from their pension.

Usually, owning wins – especially in expensive areas like Balmain.

Strategy #4: Downsizing and Age Pension

If you downsize and put proceeds into super, you might temporarily lose Age Pension.

But as you draw down over 5-10 years, your Age Pension gradually increases.

This needs careful planning, but can work brilliantly.

Strategy #5: Work Bonus for Part-Time Work

If you work part-time while receiving Age Pension:

First $300/fortnight of employment income is exempt (Work Bonus)

Anything above that reduces your pension by 50 cents per dollar

This means working one day per week usually still makes sense financially.

Common Age Pension Myths (Busted)

Myth #1: “I own my home so I won’t get any pension”

FALSE. Your home doesn’t count in the assets test.

Homeowners with $600k-$900k super often get $10k-$35k/year pension.

Myth #2: “The Age Pension won’t be there when I retire”

Unlikely. The Age Pension is politically sacred.

They might tweak eligibility or indexation, but it’s not going away.

Plan assuming it exists – just don’t rely on it 100%.

Myth #3: “I should aim to be self-funded to avoid means testing”

This is terrible logic.

You’d need an extra $500,000-$700,000 in super to replace what Age Pension provides.

Most people are better off with less super + Age Pension than massive super + no pension.

Myth #4: “Super income counts against Age Pension”

Mostly false. If you’re over 60, most super drawdowns don’t count as income.

Centrelink uses deeming rates on your super balance (assets test), not your actual withdrawals (income test).

Myth #5: “I can’t get Age Pension while working”

False. You can work part-time and receive Age Pension.

First $300/fortnight is exempt. After that, pension reduces 50 cents per dollar earned.

How to Calculate Your Age Pension Right Now

Step 1: Use the Official Calculator

Go to: servicesaustralia.gov.au

Search for: Age Pension calculator

Age Pension calculator

You’ll need:

• Your super balance
• Other financial assets (bank accounts, shares, etc.)
• Whether you own your home
• Any other income sources

Time required: 10-15 minutes

Step 2: Run Multiple Scenarios

Don’t just calculate your current position.

Model what happens at different ages and asset levels:

• Age 67 with current assets
• Age 72 with reduced assets (after drawdowns)
• Age 77 with further reduced assets

This shows you how your Age Pension grows as your assets reduce.

Step 3: Factor It Into Your Retirement Plan

Once you know your Age Pension entitlement, add it to your retirement income:

Super income: $______/year

Age Pension: $______/year

Other income: $______/year

Total: $______/year

Does that cover your costs?

If yes, you’re ready to retire.

If no, you know exactly what gap you need to close.

Why This Matters More Than You Think

The Age Pension isn’t just “nice to have.”

For most Balmain homeowners, it’s the difference between:

• Retiring at 62 vs working until 67
• Comfortable retirement vs frugal retirement
• Travelling regularly vs staying home
• Helping kids with house deposits vs protecting every dollar

Even a part pension of $15,000/year is equivalent to having an extra $375,000 in super generating 4% returns.

Ignoring it is financial malpractice.

The Bottom Line

The Age Pension is:

✓ An entitlement you’ve earned through decades of tax

✓ Worth $250,000-$500,000+ over retirement for most Balmain locals

✓ Available even if you own a multi-million dollar home

✓ Easier to qualify for than most people think

✓ Worth 10-15 minutes of your time to calculate

Stop assuming you won’t get it.

Stop ignoring it in your retirement planning.

Stop leaving hundreds of thousands of dollars on the table.

Calculate your entitlement. Factor it into your plan. Retire sooner.

Get Your Exact Age Pension Calculation

The online calculator gives you a rough estimate. But strategic Age Pension positioning requires deeper analysis.

The One Page Financial Plan includes your exact Age Pension entitlement AND shows you how to maximize it through strategic decisions.

For $660 (inc GST), you’ll discover:

✓ Your exact Age Pension (now and at future ages as assets reduce)

✓ Whether strategic decisions could increase your pension

✓ How Age Pension affects your total retirement income

✓ What this means for when you can actually retire

✓ 100% satisfaction guaranteed

One Page Financial Plan

📧 Email: adam@suncow.com.au

📞 Phone: 0418 785 200