Tips on Maximising Your Age Pension Entitlements

Age Pension may not provide a large income, but it remains a major part of retirement funding for many Australians. According to the Australian Institute of Health and Welfare, around 2.7 million people aged 65 and over were receiving the Age Pension as of March 2025. With living costs continuing to place pressure on retirees, it is worth understanding the legal ways to review and maximise your entitlements.

Frequently Update Asset Values

Personal assets can change in value over time. If your assessable assets have reduced, your Age Pension entitlement may also change. It is your responsibility to keep Centrelink updated, so regularly reviewing and reporting asset values can help ensure your payment reflects your current circumstances.

Transfer Superannuation to a Younger Spouse

If one partner is under Age Pension age, their superannuation may not be counted under the Age Pension income and assets tests, provided it is not paying them a superannuation pension. In some cases, contributing funds to a younger spouse’s superannuation may reduce the older partner’s assessable assets and improve Age Pension outcomes.  

However, this strategy needs careful advice. Contribution caps, withdrawal rules, access to funds, tax implications and Centrelink requirements all need to be considered before moving money between superannuation accounts.

Options for Estate Planning

Estate planning can affect Age Pension entitlements, especially after the death of a spouse. The surviving partner may be assessed under the single pension rules, and changes to assets, superannuation, income streams or inheritances can affect their payment.

It is important to be careful with strategies involving gifts or transfers of assets. Centrelink has gifting and deprivation rules, which means assets given away or transferred for less than market value may still be counted under the income and assets tests. Services Australia explains that gifted income or assets may still count, while the Department of Social Services notes that deprived assets may be assessed for five years from the date of disposal.

A financial planner can help review estate planning options in a way that considers Age Pension entitlements, tax, superannuation, aged care needs and the financial security of the surviving partner.

Check Your Pension Supplements & Concessions

Maximising your Age Pension entitlement is not only about the base payment. You may also be eligible for additional support, depending on your circumstances.

For example, Services Australia notes that Age Pension recipients may receive support such as Rent Assistance if they pay rent, Remote Area Allowance if they live in an eligible remote area, and a Pensioner Concession Card, which can provide access to cheaper health care, medicines and other discounts.  

It is worth checking that your details are up to date with Centrelink, including your rent, address, relationship status and living arrangements, so any eligible supplements or concessions can be assessed correctly.

Understand the Work Bonus if You Still Work

If you receive the Age Pension and still earn employment income, the Work Bonus may help reduce how much of that income is counted under the income test. Services Australia describes the Work Bonus as a scheme that reduces the amount of employment income counted towards the pension income test.  

This can be helpful for pensioners who do casual, part-time or seasonal work and want to keep earning without unnecessarily reducing their pension. However, the rules can be specific, so it is worth getting advice before making work or income decisions based on Centrelink outcomes.

Review Prepaid Funeral Expenses

Prepaid funeral expenses may be treated differently under the Age Pension assets test. Services Australia says funeral costs paid in advance normally do not count in the assets test, although some exceptions apply.  

For some retirees, planning ahead for funeral costs can reduce stress for family members while also affecting how assets are assessed. This should be considered carefully as part of a broader retirement and estate planning discussion, rather than as a stand-alone pension strategy.

Review Superannuation Before & After Age Pension Age

Services Australia states that once a person reaches Age Pension age, their superannuation is counted in both the assets test and income test, using the latest balance for the assets test and deeming rules for the income test. The same applies to a partner’s super once they reach Age Pension age.  

This means timing can matter. Reviewing superannuation before and after Age Pension age may help you understand how your balance, income streams and spouse’s circumstances affect your entitlement.

Our financial planners at Prudent Finance can help you review your retirement income, understand your Age Pension entitlements and make informed decisions about superannuation, estate planning and long-term financial security. With the right advice, you can plan with more confidence and avoid mistakes that may affect your future income. Contact us today to book a consultation.

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