Aged Pension : Millions of Australian retirees received a modest financial lift as the federal government implemented its latest Age Pension adjustments in March 2025.
This twice-yearly indexation provides critical support for older Australians navigating rising living costs, though many pensioners have expressed disappointment at the relatively small increase compared to previous adjustments.
The changes affect payment rates, eligibility criteria, and various supplements that form the backbone of Australia’s retirement income system.
Knowing when payments hit bank accounts and understanding the full scope of the changes is essential for effective financial planning in retirement.
What’s Changed? The March 2025 Increases
The March 2025 indexation has delivered modest increases for Age Pension recipients, reflecting Australia’s cooling inflation rate.
The twice-yearly adjustments are tied to economic indicators including the Consumer Price Index (CPI), the Pensioner and Beneficiary Living Cost Index (PBLCI), and Male Total Average Weekly Earnings (MTAWE).
Singles have seen their payments rise by $4.60 per fortnight, while couples receive a combined increase of $7.00 ($3.50 each) per fortnight.
This represents a significantly smaller boost compared to the September 2024 increases, which delivered $28.10 for singles and $42.40 for couples.
The modest rise reflects Australia’s easing inflation rate, which slowed to 2.4% for the 12-month period ending December 2024, down from 3.8% in the previous measurement period.
Current Age Pension Payment Rates (March-September 2025)
The following rates apply from March 20, 2025, to September 19, 2025:
| Payment Type | Fortnightly Rate | Annual Approximate |
|---|---|---|
| Single | $1,149.00 | $29,874 |
| Couple (each) | $866.10 | $22,519 |
| Couple (combined) | $1,732.20 | $45,037 |
| Couple separated due to illness (each) | $1,149.00 | $29,874 |
These figures include the base pension rate, pension supplement, and energy supplement. The annual amounts are approximate, calculated at 26 fortnightly payments per year.
The pension payment is made up of several components:
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The base pension rate
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Pension Supplement (for everyday living expenses)
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Energy Supplement (to assist with utility costs)
For those on transitional pensions (introduced after 2009 income test changes), the rates are slightly lower:
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Single: $944.80 per fortnight (approximately $24,565 per year)
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Couple (each): $762.30 per fortnight (approximately $19,820 per year)
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Couple (combined): $1,524.60 per fortnight (approximately $39,640 per year)
Transitional pension recipients aren’t eligible for the pension supplement but may qualify for the energy supplement under certain conditions.
Important Payment Dates for 2025
The Age Pension is typically paid fortnightly, but payment schedules can vary around public holidays. Here are the key dates for 2025:
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March 20, 2025: New payment rates take effect
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April 2025: Regular fortnightly payments (adjusted for Easter holidays)
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July 1, 2025: Annual adjustment to income and asset test free areas
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September 20, 2025: Next scheduled rate review and potential increase
Some Age Pension recipients may qualify for advance payments if they’ve been receiving the pension for at least three months. These advances can help with unexpected expenses but will reduce future pension payments until repaid.
Pensioners living overseas follow a slightly different payment schedule, with payments typically made every four weeks rather than fortnightly.
Eligibility Requirements for 2025
To qualify for the Age Pension in 2025, applicants must meet several criteria:
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Age: Must be 67 years or older (for both men and women)
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Residency: Must be an Australian resident and physically present in Australia when claiming, with at least 10 years of Australian residency (including at least 5 consecutive years)
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Income Test: Must have income below specified thresholds
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Assets Test: Must have assets valued below specified thresholds
Both the income and assets tests are applied, with the test resulting in the lower payment rate being used to determine your pension amount.
2025 Income Test Limits
For the full pension, your fortnightly income must be below:
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Singles: $212 per fortnight
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Couples (combined): $372 per fortnight
The part pension cuts off completely when fortnightly income exceeds:
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Singles: $2,332.00 per fortnight
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Couples (combined): $3,568.00 per fortnight
Remember that the Work Bonus allows pensioners to earn up to $300 per fortnight from employment without it affecting their pension rate.
2025 Assets Test Limits
The asset test thresholds as of March 20, 2025, are:
For Full Pension:
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Single homeowners: $314,000
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Single non-homeowners: $566,000
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Couple homeowners (combined): $470,000
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Couple non-homeowners (combined): $722,000
For Part Pension (cutoff point):
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Single homeowners: $697,000
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Single non-homeowners: $949,000
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Couple homeowners (combined): $1,047,500
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Couple non-homeowners (combined): $1,299,500
These thresholds represent the maximum assets you can have while still receiving some pension payment. Once you exceed these limits, you’ll no longer qualify for any Age Pension.
Your principal home is not counted in the assets test, regardless of its value.
The Work Bonus Enhancement Continues
The Work Bonus program, designed to encourage pensioners to remain in or return to the workforce, continues with its enhanced features in 2025:
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$300 per fortnight of employment income is exempt from the pension income test
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Unused portions accumulate in a Work Bonus bank up to a maximum of $11,800
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New pension recipients start with a $4,000 credit in their Work Bonus bank
This means a single pensioner could potentially earn up to $512 per fortnight ($300 Work Bonus + $212 income-free area) before their pension starts to reduce. For couples, this combined amount could be up to $672 per fortnight.
The government permanently increased the Work Bonus bank maximum from $7,800 to $11,800 from January 1, 2024, a change that continues to benefit working pensioners throughout 2025.
Deeming Rates Frozen Until Mid-2025
In welcome news for pensioners with financial investments, the government has extended the freeze on deeming rates until June 30, 2025.
Deeming rates are used to calculate assumed income from financial assets for pension assessment purposes.
The current deeming rates remain at:
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0.25% for financial assets up to $60,400 (singles) or $100,800 (couples)
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2.25% for financial assets above these thresholds
Without this extension, deeming rates would likely have increased in line with rising interest rates, potentially reducing pension payments for many retirees with modest savings.
Special One-Off Payments and Additional Benefits
Some pensioners may qualify for additional support beyond the regular pension payments:
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Rent Assistance: Provides additional support for pensioners who rent privately, with maximum fortnightly payments of $157.20 for singles and $148.00 each for couples
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Essential Medical Equipment Payment: Annual payment to help with increased energy costs from running essential medical equipment
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Pension Supplement: Can be paid quarterly rather than fortnightly to help budget for regular bills
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Advance Payments: Eligible pensioners can apply for advance payments of up to $1,357.00 (singles) or $1,026.00 each (couples) in any six-month period
Local councils and state governments may also offer additional concessions on rates, utilities, transportation, and healthcare services.
Real Impact on Retirees’ Lives
The modest $4.60 per fortnight increase for singles (equivalent to $119.60 annually) has drawn criticism from retiree advocacy groups.
Many pensioners have expressed concerns that this amount fails to keep pace with the real-world cost increases they’re experiencing, particularly in essentials like groceries, healthcare, and utilities.
Retired teacher Margaret Wilson from Brisbane summed up the frustration felt by many: “This increase barely covers a loaf of bread and milk each week.
Meanwhile, my private health insurance just went up by $8 a fortnight. We’re actually going backward.”
National Seniors Australia has called for a more substantial one-off increase to the base rate of the Age Pension, citing research showing pensioners need between $10,000 (singles) and $15,000 (couples) above the current pension rates to maintain a basic standard of living.
The reality is that many older Australians continue to struggle with cost-of-living pressures despite the indexation system designed to protect their purchasing power.
Strategic Planning for Age Pension Recipients
Financial advisors recommend several strategies for pensioners looking to maximize their entitlements in 2025:
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Regularly check eligibility: As thresholds change, some who previously missed out may now qualify
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Track Work Bonus balance: For working pensioners, monitor your Work Bonus bank to optimize work patterns
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Review financial investments: Consider how investments are structured to minimize deemed income
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Understand gifting rules: You can gift up to $10,000 per financial year (maximum $30,000 over five years) without affecting your pension
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Explore advance payments: For necessary large purchases or unexpected bills
It’s also worth reviewing your overall financial situation annually with a financial advisor who specializes in retirement planning and Centrelink benefits.
Looking Ahead: September 2025 Review
The next Age Pension rate review is scheduled for September 20, 2025. Economic indicators suggest this adjustment may be more substantial if inflation trends upward during the first half of 2025.
Several factors will influence the September adjustment:
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Inflation rates between January-June 2025
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Changes to the Pensioner and Beneficiary Living Cost Index
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Movements in average weekly earnings
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Any additional government budget measures
The income and assets test thresholds for full pension eligibility will also adjust on July 1, 2025, potentially extending eligibility to more retirees.
Aged Pension Conclusion: Managing Expectations and Planning Ahead
The March 2025 Age Pension increase, while modest, provides some additional support for Australia’s 2.5 million Age Pension recipients.
Understanding the full range of available benefits and strategically managing assets and income can help maximize retirement income.
With cost-of-living pressures continuing to impact retirees, it’s more important than ever to stay informed about pension entitlements and adjustments.
Regular reviews of your financial situation, coupled with strategic planning, can help make the most of the support available.
For personalized advice and to ensure you’re receiving all entitlements, contact Services Australia or consult with a financial advisor who specializes in retirement planning and Centrelink benefits.