Australia’s Age Pension system is getting a major overhaul in 2025—and for millions of older Australians, the changes could mean more money in their pocket or new eligibility requirements to navigate. Centrelink has confirmed several important updates, including revised income and asset thresholds, changes to deeming rates, and expanded access to concession cards.
If you’re a pensioner, close to retirement, or helping a loved one manage their finances, you need to understand how these changes might impact your benefits. This article breaks it all down—what’s changing, why it’s happening, and what you should do next.
What Is the Age Pension?
The Age Pension is a government-funded income support payment for older Australians who are no longer in full-time employment. It is managed by Services Australia through Centrelink, and eligibility depends on age, residency, income, and assets.
As of April 2025, approximately 2.6 million Australians receive the Age Pension. The benefit is vital for many seniors who rely on it to cover daily living costs, healthcare, rent, and basic needs.
Key Age Pension Changes Effective from April–July 2025
Let’s look at the most significant reforms taking place in 2025:
1. Increase in Pension Rates
In line with biannual indexation, the Age Pension was increased from 20 April 2025, reflecting higher living costs. The new base rates are:
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Singles: Increased to $1,116.30 per fortnight (up from $1,096.70)
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Couples (combined): Increased to $1,682.80 per fortnight (up from $1,653.40)
This includes the Pension Supplement and Energy Supplement, which are also adjusted.
These increases are meant to reflect inflation and maintain the real value of payments as the cost of essentials—food, fuel, medical care, rent—continues to rise.
2. Changes to Income Test Thresholds
To determine eligibility and payment rates, Centrelink uses the income test and assets test. In 2025, income test thresholds have been raised slightly:
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Singles can now earn up to $204 per fortnight (up from $190) before their pension is reduced.
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Couples can earn up to $360 per fortnight combined (up from $336).
Beyond these limits, payments are reduced at 50 cents per dollar over the threshold. These higher thresholds allow pensioners to earn more from part-time work or investments without losing as much pension income.
3. Deeming Rate Freeze Extended
Deeming rates are used by Centrelink to calculate income from financial assets like superannuation, savings accounts, and shares—even if you don’t actually earn that income.
The lower deeming rate (0.25%) and upper rate (2.25%) will remain frozen until 30 June 2025, providing a win for pensioners. This freeze benefits many seniors by keeping their assessed income lower, which helps retain or increase Age Pension entitlements.
4. Assets Test Adjustments
The assets test threshold is also being updated. New limits from 1 July 2025 are:
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Single homeowners: Up to $301,750 in assets (up from $301,750)
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Couple homeowners: Up to $451,500 in assets
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Non-homeowners receive higher thresholds
These new thresholds ensure more people qualify for a full or part pension, especially given Australia’s housing crisis and higher cost of living in retirement.
5. Expanded Access to the Commonwealth Seniors Health Card
Older Australians who don’t qualify for the Age Pension due to high income or assets may now be eligible for the Commonwealth Seniors Health Card (CSHC) thanks to increased income limits:
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Singles: Income must be below $95,400
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Couples: Combined income below $152,640
The card offers cheaper prescriptions, bulk-billed doctor visits, and utility discounts—making it extremely valuable for self-funded retirees.
6. Work Bonus Continues
The popular Work Bonus scheme continues unchanged in 2025. It allows pensioners to earn up to $300 per fortnight from employment without affecting their pension.
The Work Bonus balance (which accrues up to $7,800 per year) also remains in place, offering flexibility for casual and part-time work without harsh penalties.
Why These Changes Matter
The Age Pension isn’t just a welfare payment—it’s a lifeline. For many seniors, it represents their primary source of income in retirement. The latest updates mean:
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More Australians will retain or gain eligibility
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Pensioners can earn and save more without losing benefits
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Payments better match real-world costs
The government aims to balance economic responsibility with social support, ensuring that pensioners can live with dignity even as Australia faces rising costs and demographic shifts.
What Should You Do?
Here’s a checklist to make sure you’re prepared for the new rules:
✅ Review your Centrelink record on myGov
✅ Update your income and asset declarations
✅ Check your eligibility for the Seniors Health Card
✅ Understand how your superannuation impacts your pension
✅ Speak to a Centrelink Financial Information Service Officer if needed
You can also use Centrelink’s online pension calculator to estimate how these changes will impact your payments.
Final Thoughts
The 2025 Centrelink Age Pension changes offer some real wins: higher payments, increased earning flexibility, and broader eligibility. But the system is complex, and small changes in income or assets can affect your payment rates significantly.
If you’re already receiving the pension, the changes are automatic—no need to reapply. But staying informed and proactive will ensure you make the most of every dollar available. With costs rising and financial stress mounting for older Australians, these changes are not just updates—they’re essential lifelines.