Millions of Australian retirees are set to receive a significant boost in their Age Pension payments starting September 20, 2025. A 2.6% increase will provide crucial financial relief to those who are struggling with the rising cost of living. Whether you’re already receiving the Age Pension or about to apply, it’s vital to understand how this change could impact your payments.
Age Pension Increase – Key Details You Should Know
As part of regular adjustments, the Age Pension payment will see an increase, aimed at helping retirees keep pace with inflation and economic challenges. This update, effective from September 2025, offers a 2.6% raise, directly benefiting eligible recipients.
Australia Old Age Pension 2025: Updated Rates and What It Means for Pensioners
Why This Age Pension Boost Matters for You
The Age Pension is essential for retirees in Australia, as it helps cover the daily costs of living, including groceries, bills, and housing. As the cost of living rises, even a small increase can significantly ease financial pressure for many households. The 2.6% increase is a step toward addressing these challenges, helping seniors stay financially secure in uncertain times.
Eligibility for the Age Pension – Are You Qualified?
To qualify for the Age Pension, there are specific requirements you must meet:
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Age Requirement: You must be at least 67 years old (for those born after April 1, 1957).
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Residency: Applicants must have lived in Australia for at least 10 years, including five continuous years. Temporary or non-permanent residents are not eligible.
New Pension Rules Start April 2025: Major Changes Every Retiree Must Know
Understanding the Income and Assets Tests
Centrelink uses two main tests – the Income Test and the Assets Test – to determine eligibility for the full or partial Age Pension. Here’s an overview of what these tests involve:
Income Test (2025 Thresholds)
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Single: $212 per fortnight (Reduction: 50¢ per $1 over the threshold)
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Couple: $360 combined/fortnight (Reduction: 50¢ per $1 over the threshold)
Assets Test (2025 Thresholds)
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Single: $301,750 for full pension (Reduction: $3 per $1,000 over the limit)
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Couple: $451,500 combined (Reduction: $3 per $1,000 over the limit)
Note: Primary residences are exempt from the assets test.
Updated Fortnightly Pension Payments – Starting September 2025
| Recipient Category | Previous Rate | New Rate | Increase |
|---|---|---|---|
| Single | $1,116.30 | $1,144.40 | +$28.10 |
| Couple (combined) | $1,682.80 | $1,725.20 | +$42.40 |
| Couple (illness-separated) | $1,116.30/person | $1,144.40/person | +$28.10 |
Extra Benefits That Can Help You Save More
In addition to the base pension, there are several extra benefits available to further assist you with the rising cost of living:
Pension Supplement (April 2025 Rates)
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Single: $83.20
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Couple: $125.40 (combined)
Rent Assistance (April 2025 Maximum Rates)
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Single: $211.20
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Couple: $199.00 (combined)
Energy Supplement
This supplement helps offset rising energy costs, but only available to those who began receiving it before 2016 or meet specific conditions.
What You Need to Know About Transitional Pension Rates
Some retirees who began receiving benefits before 2009 may still be on transitional rates, which are slightly higher than standard rates.
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Single: $941.10 per fortnight
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Couple: $759.30 per person
These pensioners may also qualify for additional benefits like the Energy Supplement.
How to Apply for the Age Pension
If you’re approaching retirement, apply for the Age Pension up to 13 weeks before your 67th birthday. Applications can be submitted through:
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Centrelink’s online portal
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In-person at Services Australia offices
Required Documents
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Proof of age and identity
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Details of your income and assets
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Residency information
Once approved, payments are made every two weeks.
Frequently Asked Questions (FAQ)
When will the new Age Pension rates take effect?
The updated 2.6% increase in Age Pension rates will be implemented starting September 20, 2025.
Can I still receive the Age Pension if I own a home?
Yes, owning your primary residence will not affect your eligibility for the Age Pension. However, other assets like savings, investments, and vehicles will be considered in the assets test.
What happens if my income or assets exceed the threshold?
If your income or assets exceed the set limits, you may still receive a reduced Age Pension. Payments are adjusted based on how much over the threshold your income or assets go.