Big changes are coming to Centrelink Age Pension in the 2025–26 financial year, and if you’re a retiree, soon-to-be retiree, or helping someone who is, this news directly affects you. From boosted payments to relaxed asset tests and new super rules, the updates are both good news and a big opportunity to plan ahead smartly.
Centrelink Pension Shake-Up for 2025–26
| What’s Changing | Details | Effective Date |
|---|---|---|
| Age Pension Rates | +2.4% indexation | July 1, 2025 |
| Fortnightly Payment (Single) | AU$1,149.00 | From March 20, 2025 |
| Fortnightly Payment (Couples Combined) | AU$1,732.20 | From March 20, 2025 |
| Asset Test Threshold (Single, Homeowner) | AU$321,500 | July 1, 2025 |
| Asset Test Threshold (Couple, Homeowners) | AU$481,500 | July 1, 2025 |
| Income Test Threshold (Single) | AU$218 per fortnight | July 1, 2025 |
| Super Guarantee Increase | 12% (up from 11.5%) | July 1, 2025 |
| Transfer Balance Cap | AU$2 million | July 1, 2025 |
| Legacy Pension Exit Option | 5-year window opens | December 5, 2024 |
| Official Source | Services Australia |
The Centrelink Pension Shake-Up for 2025–26 brings better benefits and more flexibility. But to really make the most of it, you gotta be proactive. Understand the thresholds. Review your finances. Get advice. And remember: even small tweaks today can have a big impact on your retirement lifestyle tomorrow.
What Is the Centrelink Pension Shake-Up All About?
Let’s put it this way: The Aussie government knows retirees are doing it tough—rising living costs, rents, healthcare, the lot. So, they’re stepping in with a shake-up that boosts pension payments, increases eligibility thresholds, and gives retirees more freedom in managing their retirement income.
If you’re already on the Age Pension, these changes mean more money in your pocket and fewer chances of losing support if your savings or income creep up a bit. If you’re not yet eligible, these higher thresholds could be your golden ticket.
1. Age Pension Payment Increases
Starting July 1, 2025, all Centrelink payments, including the Age Pension, will rise by 2.4%. This is due to indexation, which adjusts for inflation and cost-of-living changes.
As of March 20, 2025:
- Singles get AU$1,149.00 every fortnight.
- Couples (combined) get AU$1,732.20 (AU$866.10 each).
2. Updated Asset & Income Test Thresholds
The asset and income tests determine how much pension you receive. Starting July 1, 2025, the limits are increasing, which is great news!
New Asset Limits (for full pension):
- Single homeowner: Up to AU$321,500
- Couple homeowners: Up to AU$481,500
New Income Limits (before your pension reduces):
- Single: Up to AU$218 per fortnight
- Couple (combined): Up to AU$384 per fortnight
These thresholds let more people qualify for full or partial pensions without being penalized for saving a bit more.
3. Legacy Pension Exit Strategy
Remember those old-school pensions from before 2007? A lot of retirees got stuck in them with no way out. But starting December 5, 2024, there’s a five-year window to exit legacy pensions and switch to more flexible options like account-based pensions.
This is a huge opportunity to take back control of your finances—but it can be tricky. Get professional advice before making the leap.
4. Superannuation Tweaks You Can’t Ignore
This year also marks the final increase in the Super Guarantee—the percentage your employer must pay into your super. From July 1, 2025, it rises to 12%.
Also changing:
- Transfer Balance Cap goes from AU$1.9M to AU$2M, meaning you can shift more of your super into the tax-free retirement phase.
Planning to keep working past 65? Talk to your HR or financial adviser about how this affects your retirement timeline and strategies like salary sacrifice.
5. Aged Care & Other Services
Need a hand at home or help with aged care? Big changes are also rolling out in how aged care and home support packages are funded. These might affect:
- Income-tested fees
- Eligibility for certain services
- Wait times for packages
Be sure to check your My Aged Care portal and speak with a social worker if you need personalized advice.
Practical Steps to Take Now
Here’s how to get ahead of the game:
1. Review your finances
See if your current assets and income fall under the new thresholds. Even a few bucks can make the difference between full, part, or no pension.
2. Get advice on legacy pensions
Talk to a financial adviser about converting to a modern product. The five-year window isn’t forever.
3. Check your super
If you’re still working, consider salary sacrificing to boost your super and take advantage of the final SG hike.
4. Monitor future indexation
The next expected pension adjustment is September 20, 2025. Bookmark that date.
FAQs
Q1: Will I automatically get more money in July 2025?
Yes, if you’re already receiving payments. The 2.4% increase is automatic.
Q2: I was over the asset limit before. Could I now qualify?
Possibly. Check the new thresholds. You may now be eligible for a part pension.
Q3: Are the changes taxable?
The Age Pension is taxable, but many retirees stay under the threshold for paying income tax. Always check with the ATO or a tax pro.
Q4: How do I apply or update my info with Centrelink?
Use your myGov account linked to Centrelink or visit Services Australia.
