Age Pension Increases & Key Rule Changes – What Retirees Need to Know
The Australian Government has updated the Age Pension rates and support thresholds as of 20 September 2025, reflecting semi-annual indexation to help pensioners cope with rising living costs. These changes affect how much a full Age Pension is, the income and assets you can hold without losing eligibility, and the deeming rates used in assessing income from financial assets.
Key Rate Changes
Singles on the full Age Pension will see an increase of $29.70 per fortnight, bringing their total to $1,178.70 every two weeks. For couples (both eligible), the combined amount will increase by $44.80 per fortnight ($22.40 each), taking them to $1,777.00, or $888.50 each. These amounts include the base pension, the pensioner supplement and the energy supplement.
What Has Also Changed: Income & Asset Limits, and Deeming Rates
Beyond just higher payments, there are changes to the means test thresholds and deeming rates that determine eligibility. The income and assets tests have been lifted, meaning some retirees who were previously just outside the limits may now qualify for part or even full pension entitlements. Deeming rates, which the Government uses to assess the income generated from financial assets, have also been adjusted. For retirees with savings or investments, this change could alter how much pension support they receive, depending on how their assets are structured.
Who Qualifies and What Differences These Changes Make
To receive a full Age Pension, retirees must satisfy both the income test and the assets test, with the lower entitlement between the two becoming the determining factor. If either test is exceeded, the payment is reduced, or only a part pension is provided. Couples are assessed together, even if only one partner is eligible, which can affect the overall outcome. For many retirees, these September changes represent a modest but welcome improvement, providing more financial breathing room in the face of rising everyday costs such as groceries, healthcare, and utilities.
Things to Keep in Mind
The good news is that these increases are automatic – there is no need to reapply to access the new rates. However, retirees close to threshold values should be aware that even small changes in their financial circumstances, such as selling an asset or receiving an inheritance, could affect their entitlement. Adjustments to deeming rates are also important to watch, as these rates determine how financial assets like term deposits or managed funds are treated for pension calculations. Even if you are not drawing income from those assets, the deemed amount may still reduce your pension payments. Reviewing your financial arrangements in light of these changes can help ensure you are maximising your entitlements.
Why These Developments Matter
With the cost of living continuing to rise, particularly in essentials such as food, energy and housing, the latest Age Pension increases are aimed at helping older Australians preserve their purchasing power. While the fortnightly boosts may appear small, they can make a meaningful difference over time, easing pressure on household budgets and helping retirees better manage day-to-day expenses. For those planning retirement, these changes also highlight the importance of understanding how superannuation, investments, and other income sources interact with the Age Pension. Strategic planning can help ensure you not only qualify for support but also maximise your overall retirement income.
Simmons Livingstone can help assess how the new Age Pension rates and eligibility thresholds affect your retirement income. Contact us today on 1800 618 800 or via email at admin@simmonslivingstone.com.au to arrange a review of your pension entitlements and retirement strategy.
