Starting September 20, 2025, millions of Australian retirees will receive a 2.6% increase in their Age Pension payments. This adjustment is aimed at helping older Australians cope with rising inflation and increased living expenses.
Whether you’re already receiving pension payments or planning for retirement, it’s crucial to understand what this change means, how much you’ll receive, and the criteria for eligibility.
Age Pension Increase – April 2025 Review
The Australian government performs biannual reviews of Age Pension rates to ensure payments remain aligned with both the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI).
As a result of the April 2025 assessment, a 2.6% increase has been approved for eligible recipients, providing additional financial stability amid economic challenges.
Why the Age Pension Is Vital
The Age Pension is a key pillar of Australia’s retirement income system, supporting seniors with essential living costs such as:
- Groceries
- Utilities
- Housing
With inflation continuing to affect everyday prices, even a small increase like 2.6% can significantly assist pensioners managing tight budgets.
Eligibility Criteria for the Age Pension
To qualify for the Age Pension, individuals must meet the following conditions:
- Age: Must be at least 67 years old (for those born after April 1, 1957)
- Residency: Must have lived in Australia for at least 10 years, including five consecutive years
- Income and Assets: Must pass Centrelink’s income and asset tests
Income and Asset Tests – Explained
Centrelink determines pension eligibility and payment levels using income and asset tests.
Income Test – 2025 Thresholds
| Category | Income Before Reduction | Reduction Rate |
|---|---|---|
| Single | $212 per fortnight | 50¢ for every $1 over limit |
| Couple | $360 combined per fortnight | 50¢ for every $1 over limit |
Assets Test – 2025 Thresholds
| Category | Asset Limit for Full Pension | Reduction Rate |
|---|---|---|
| Single | $301,750 | $3 per $1,000 over limit |
| Couple | $451,500 (combined) | $3 per $1,000 over limit |
Note: Primary residences are exempt from the asset test.
New Fortnightly Payment Rates – Effective September 20, 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 |
Additional Benefits You May Be Eligible For
In addition to the base pension, retirees may qualify for supplementary payments:
Pension Supplement (April 2025)
| Category | Payment |
|---|---|
| Single | $83.20 |
| Couple | $125.40 (combined) |
Rent Assistance (April 2025 Maximum)
| Category | Payment |
|---|---|
| Single | $211.20 |
| Couple | $199.00 (combined) |
Energy Supplement
Still provided to qualifying pensioners who began receiving it before 2016, or who meet special conditions.
Transitional Pension Rates Still Apply to Some
Some retirees receiving payments since before 2009 may still be eligible for transitional rates:
| Category | Transitional Rate |
|---|---|
| Single | $941.10 per fortnight |
| Couple | $759.30 per person |
These recipients may also receive the Energy Supplement and other applicable benefits.
How to Apply for the Age Pension
If you’re nearing retirement, it’s advisable to apply up to 13 weeks before your 67th birthday. Applications can be made:
- Online via the Centrelink portal
- In-person at any Services Australia office
Documents Required:
- Proof of identity and age
- Details of income and assets
- Evidence of residency
Payments are issued fortnightly upon approval.
Conclusion
With a 2.6% Age Pension increase starting September 20, 2025, Australian retirees will gain timely financial relief to combat the rising cost of living. Whether you’re already receiving payments or planning your retirement, staying informed about your eligibility, entitlements, and supplement options can help maximize your support.
Apply early and keep your records up to date to ensure you receive the full benefit you’re entitled to.
FAQs
When will the new Age Pension rates take effect?
The updated rates will begin from September 20, 2025, and will reflect in the next scheduled fortnightly payment.
Can I receive the Age Pension if I own a home?
Yes, ownership of your primary residence does not affect eligibility as it is excluded from the assets test.
What happens if my income or assets exceed the threshold?
You may still qualify for a reduced pension, but payments will be tapered based on how much your income or assets exceed the limits.