02 June 2026
For many Australians, the Age Pension forms part of their retirement plan alongside super and personal savings. It is designed to provide a base level of support, but your entitlement depends on your age, residency, and financial position.
Centrelink is complicated, especially when there is no familiarity around these rules, systems and processes. I’ve seen many pensioners stress over the basics resulting in lengthy delays and/or loss of entitlements.
For many, it’s because they are not technically savvy and for the first time in their lives will need to wrap their heads around the basics such as navigating MyGov, Digital ID, MyID and applying for a CRN. This stress is magnified further when there are language barriers involved.
On top of this, without a basic understanding of how the ‘incomes and assets test’ is applied, many successful applicants do not receive their correct entitlements anyway and in some cases it could be as simple as making the mistake of disclosing the ‘insurable’ value of their car and contents when it should be the ‘fire sale’. Another example is failing to update valuations when markets go down or when bank accounts erode overtime through spending.
Furthermore, if this time period aligns to their retirement date, highly recommended that you speak to a financial adviser so you have the right conversations about your future income needs and can go through your options which may include the strategies to maximise your Centrelink entitlements. What matters is knowing the key areas that can affect your Age Pension and getting advice that fits your situation.
When Centrelink assesses your Age Pension eligibility, it focuses on three main areas:
If you meet the age and residency rules, Centrelink then applies both an income test and an assets test. The test that produces the lower pension amount is the one that applies.
The assets test looks at the value of what you own. This can include financial assets such as money in the bank, shares, managed funds. These are generally valued at market value. Other assets may include investment properties, vehicles, and other personal assets.
Your family home is generally exempt, which makes it an important part of retirement planning. If your assessable assets are below the ‘Asset Free’ threshold, you may qualify for a full pension. If they are above this threshold, you may still receive a part pension.
As your assets rise above this lower asset free threshold, your pension usually reduces gradually. That is why even small changes to how assets are structured can affect your entitlement. You can check the current thresholds on the Services Australia website
The income test looks at money you earn or are taken to earn from different sources. This may include employment income, rent from an investment property, as well as income from financial assets.
One area that often causes confusion is deeming. Rather than assessing the actual interest you earn on every bank accounts or the dividends on your shares or the return on your super (provided you are over age pension age) or what you draw down from your account based pension, Centrelink generally combines all of these financial assets together and applies set deeming rates which will instead count as income. This means your assessable income will differ from the cash flow you actually receive.
If you are still working, the work bonus may also help reduce the impact of employment income on your pension. For some retirees, that can make part-time work more worthwhile than expected because less income is counted under the Incomes Test.
The way Centrelink treats super changes as you approach Age Pension age. Before you reach pension age, super in accumulation phase, is generally not counted. Once you reach pension age, it is treated as a financial asset which means that the market value is assessed under the assets test and it is included in deeming under the incomes test.
This is one reason retirement planning should not happen in isolation. Decisions about when to retire and access your super, what you do with your super and how you structure income can all flow through to your Centrelink position. If you want to check your timelines, the Moneysmart super and pension age calculator is a great tool.
Gifting money to family is another area where people can get caught out. Centrelink has rules that can continue to count excess gifts as part of your assets for several years, so it is important to understand the consequences before acting.
Centrelink rules are not just technical. They directly affect how much income you may have in retirement and how confidently you can make financial decisions. This source of income is predictable and considered stable which can be used to meet your essential living costs. Gaining a greater share of the Age Pension means that you can draw less from your super, money in the bank and investments extending its lifespan for other things such as holidays or unplanned expenses.
Good Centrelink advice can help you understand:
At VTA Financial Planning, we believe retirement advice should be clear, personal, and easy to act on. If you are approaching retirement and want to understand how Centrelink fits into the bigger picture, we can help you plan with more clarity and confidence.
Book a complimentary consultation today to start planning your future.
This article contains general information only and does not take into account your personal objectives, financial situation or needs. Before making financial decisions, consider whether the information is appropriate for you and seek personal advice.
