Age Pension to increase from 20 March 2021

This month, Centrelink released new benefit and payment rates for the Age Pension, effective from 20 March 2021. Single clients receiving the maximum Age Pension will benefit from an increase of $8.40 per fortnight and partnered clients will each receive an increase of $6.30 per fortnight. As a result of this increase the means test disqualifying rates have also increased.

New maximum pension rates

Changes to payments rates will effect the Age Pension, Disability Support Pension (except if aged under 21 without children), Carer Payment, Aged Service Pension, Invalidity Service Pension and Partner Service Pension.

Marital statusBase pension rate
(per fortnight)

Maximum pension supplement and energy supplement
(per fortnight combined)

Maximum pension
(per fortnight)
Maximum annual pension
Single pensioners $868.30 $84.40 $952.70$24,770.20
Pensioner couple (each) $654.50 $63.60 $718.10$18,670.60
Pensioner couple – separated by iIlness (each) $868.30 $84.40 $952.70$24,770.20

Clients who were previously not entitled to a benefit and were marginally above the upper income and/or asset test threshold may now be entitled to a benefit which could also entitle them to a Pensioner Concession Card.

Now is good time to review your clients who may have previously just missed out on the Age Pension and assess their eligibility again.

New pension disqualification limits from 20 March 2021

Asset test disqualification limits

Marital status Asset disqualification limit
 Non-homeownersHomeowners
Single pensioners $800,250 $585,750
Pensioner couple (combined) $1,095,000 $880,500
Pensioner couple – separated by illness (combined) $1,251,500 $1,037,000

The lower asset test threshold being the amount of assets from which entitlements begin to phase out remains unchanged.

Income test disqualification limits

Marital statusNew income disqualification amount
(per fortnight)
Single pensioners $2,083.40
Pensioner couple (Combined) $3,188.40
Pensioner couple–Illness separated (Combined) $4,126.80

The lower income threshold being the amount of income from which entitlements begin to phase out remains unchanged.

New maximum pension falls short of a modest lifestyle

Despite this small increase, the new maximum Age Pension falls short of a modest or comfortable lifestyle based on the Association of Superannuation Funds Australia (ASFA) estimated budgets for various households and living standards for those aged around 65.

 Age PensionModest lifestyle*Comfortable lifestyle*
Single $24,770 $28,179 $44,224
Couple (combined) $37,341 $40,739 $62,562

*Based on estimated budgets for various households and living standards for those aged around 65. Estimated budgets for older clients are lower.

To this end clients cannot rely solely on an Age Pension to achieve a modest or comfortable lifestyle and will likely need to draw on personal savings to achieve their desired way of living.

If you’d like more information, please speak to your IOOF Client Solutions Manager.

For more information on the assumptions and methodology of ASFA Retirement Standard please see their ‘Detailed budget breakdowns – December quarter 2020’.