As the cost of living continues to challenge Australian retirees, the Australian Government has announced adjustments to the Centrelink Age Pension, set to take effect from 1 July 2025. These changes aim to provide financial relief to over 2.6 million pensioners by updating income and asset thresholds, and potentially revising deeming rates. This comprehensive guide will break down what’s changing, who qualifies, how payments are calculated, and practical steps to ensure you’re maximising your entitlements. Whether you’re already receiving the Age Pension or approaching eligibility, this article is your roadmap to navigating the updates.
Understanding the Centrelink Age Pension
The Age Pension is a cornerstone of Australia’s social welfare system, designed to support retirees who meet specific income, asset, and residency requirements. Administered by Services Australia through Centrelink, it provides fortnightly payments to help cover essential expenses like housing, groceries, and healthcare. With inflation and rising costs impacting seniors, the government reviews pension rates and thresholds twice a year—March and September—while income and asset test thresholds are adjusted three times annually, including a significant update in July.
The July 2025 changes are particularly important as they adjust the income and asset test thresholds, potentially allowing more Australians to qualify for full or part pensions. Additionally, there’s anticipation around possible changes to deeming rates, which could affect how financial assets are assessed for pension eligibility.
What’s Changing in July 2025?
From 1 July 2025, the Centrelink Age Pension will see adjustments to the income and asset test thresholds by approximately 2.4%, reflecting Australia’s current cost-of-living situation. While the base pension rates are not expected to increase in July (as they are typically adjusted in March and September), the raised thresholds could mean:
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More retirees may qualify for the Age Pension due to higher allowable income and asset limits.
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Existing pensioners may receive higher payments if their income or assets are close to the current thresholds.
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Deeming rates may increase, as they’ve been frozen since the COVID-19 pandemic. A reassessment is due by 1 July 2025, which could impact deemed income calculations and, consequently, pension payments for those with significant financial assets.
These updates aim to ensure the pension system remains sustainable while supporting retirees amid economic pressures. For example, last year’s July adjustment increased the income test limit by $8 for singles and $12 for couples, and the asset test limit for non-homeowners by $22,250 for singles and $28,500 for couples. Similar incremental changes are expected this year, with exact figures to be confirmed by the Department of Social Services (DSS) closer to the date.
Current Age Pension Rates (March 2025 to September 2025)
To provide context, here are the current Age Pension rates, effective from 20 March 2025 to 19 September 2025, including supplements:
|
Recipient Type |
Fortnightly Payment |
Annual Payment |
|---|---|---|
|
Single |
$1,149.00 | $29,874.00 |
|
Couple (each) |
$866.10 | $22,518.60 |
|
Couple (combined) |
$1,732.20 | $45,037.20 |
These rates include the Pension Supplement (for daily expenses) and the Energy Supplement, which remains unindexed. Note that the next base rate adjustment is scheduled for 20 September 2025, based on the Consumer Price Index (CPI), Pensioner and Beneficiary Living Cost Index (PBLCI), or Male Total Average Weekly Earnings (MTAWE), whichever yields the highest increase.
Eligibility Criteria for the Age Pension
To qualify for the Age Pension in July 2025, you must meet the following criteria:
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Age: Be at least 67 years old. This requirement was adjusted from 66 years and six months in previous years.
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Residency: Have lived in Australia for at least 10 years, including one continuous five-year period.
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Income Test: Your income must be below the threshold for a full or part pension.
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Singles: Income below $218 per fortnight ($5,668 per year) for a full pension; up to $2,510 per fortnight ($65,416 per year) for a part pension.
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Couples (combined): Income below $380 per fortnight ($9,880 per year) for a full pension; up to $3,844.40 per fortnight ($99,954 per year) for a part pension.
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Assets Test: Your assets (excluding your primary home) must be below the threshold.
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Singles (homeowners): Assets below $314,000 for a full pension; up to $703,000 for a part pension.
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Singles (non-homeowners): Assets below $572,000 for a full pension; up to $961,000 for a part pension.
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Couples (homeowners): Assets below $481,500 for a full pension; up to $1,059,000 for a part pension.
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Couples (non-homeowners): Assets below $739,500 for a full pension; up to $1,317,000 for a part pension.
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These thresholds will increase by approximately 2.4% from 1 July 2025, potentially expanding eligibility. Use the Services Australia Age Pension Calculator or Retirement Essentials Age Pension Eligibility Calculator to check your status.
Deeming Rates and Their Impact
Deeming rates are used to calculate income from financial assets like savings, shares, or managed funds, regardless of their actual returns. The current rates, frozen since the COVID-19 pandemic, are set to be reassessed by 1 July 2025. An increase in deeming rates could mean higher deemed income, potentially reducing pension payments for those with significant investments. For example:
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Current Deeming Rates (as of March 2025):
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Lower rate: 0.25% for the first $62,600 (singles) or $103,600 (couples).
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Upper rate: 2.25% for amounts above these thresholds.
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If deeming rates rise, pensioners with substantial financial assets may see a reduction in their pension. Use the Retirement Essentials Age Pension Eligibility Calculator to model the impact of potential changes.
Additional Benefits and Supplements
Pensioners may also be eligible for supplementary payments, which can enhance financial support:
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Pensioner Concession Card: Offers discounts on utilities, public transport, and council rates, depending on your state or territory.
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Rent Assistance: Available for those paying rent, provided the government isn’t already subsidising your accommodation (e.g., in a retirement village).
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Energy Supplement: A fixed amount to help with utility bills, not subject to indexation.
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Work Bonus: Allows pensioners to earn up to $300 per fortnight from work without affecting their pension, with a maximum accrual of $11,800.
There’s also talk of a one-time bonus payment in 2025, potentially $1,900, to assist with energy and healthcare costs, expected between 15–30 April 2025. However, this requires confirmation from Services Australia.
How to Maximise Your Pension
To ensure you’re getting the most from your Age Pension, consider these tips:
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Update Your Details: Report changes in income, assets, or living arrangements promptly via myGov or a Centrelink office to avoid payment disruptions.
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Check Eligibility Regularly: Use online calculators to assess how threshold changes affect your entitlement.
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Seek Financial Advice: Consult a financial planner or book a Retirement Essentials consultation ($155) to explore maximising your benefits.
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Understand Superannuation Rules: Super is not counted until you reach pension age, but withdrawals are assessable under the income and assets tests.
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Apply Early: You can apply up to 13 weeks before reaching pension age to streamline the process.
Payment Schedule and Public Holidays
Age Pension payments are typically made fortnightly. For July 2025, ensure your myGov account is linked to Centrelink to track payments. Be aware of public holidays that may shift payment dates:
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1 July 2025 (Tuesday): Payments should arrive as scheduled.
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Other holidays: Check your myGov account for early payments around public holidays like Good Friday or ANZAC Day in April.
Challenges and Considerations
While the July 2025 changes are welcome, many pensioners feel the increases are insufficient. With inflation at 2.4% in 2024, the modest threshold adjustments may not fully address rising costs. Pensioners living overseas, for instance, face additional challenges, such as ineligibility for rent assistance or advance payments, and high call costs to Centrelink. Advocacy groups like National Seniors Australia argue for more substantial support to lift pensioners above the poverty line.
Stay Informed and Plan Ahead
The July 2025 Centrelink Age Pension changes offer a vital opportunity for retirees to reassess their financial situation. By understanding the updated thresholds, potential deeming rate changes, and supplementary benefits, you can better plan for a secure retirement. Visit the Services Australia website or call 132 300 for official updates, and consider using free tools like the Age Pension Eligibility Calculator to stay ahead.
For those nearing pension age or struggling with the system, proactive steps like updating your details and seeking professional advice can make a significant difference. Stay informed, check your eligibility, and make the most of the support available to ensure financial stability in 2025 and beyond.