How much income can you earn and still get the age pension under new rules starting today?

How much you can earn in wages and/or investment income while remaining eligible for the age pension increases today.

The changes reflect indexation adjustments, which are made twice per year, to factor in inflation.

Let’s find out what’s changing today.

When can you get the age pension?

If you were born on or after 1 January 1957, you can apply for the pension when you turn 67 years old, whether retired or not.

To be eligible for either a full pension or part-payment, you have to clear the means testing.

That means testing comes in the form of assets and income tests.

Today, the rules for both tests change.

In this article, we’re focusing on the income test changes. (Go here for the assets test changes.)

What’s changing with the age pension income test today?

Under today’s indexation changes, the upper thresholds for the income test are going up.

Currently, singles who earn less than the lower threshold of $226 per fortnight are eligible for the full age pension.

Under today’s changes, singles who earn between $227 and $2,701.40 (up from $2,627.80) per fortnight qualify for a part-payment.

Part-payments are calculated by reducing the pension by 50 cents for each dollar earned above $226.

As for couples, those who earn less than the lower threshold of $396 per fortnight (combined) are eligible for the full age pension.

Couples who earn between $397 and $4,128 (up from $4,016.80) per fortnight qualify for a part-payment.

A couple’s pension is reduced by 25 cents per person for each dollar they earn above $396.

What is the Work Bonus?

The Work Bonus cuts the amount of income that counts in a pensioner’s fortnightly income test.

Every fortnight, $300 credit is added to your Work Bonus balance, up to a maximum of $11,800.

When you work and declare that income, your Work Bonus balance offsets those earnings.

That may mean you receive your normal pension payment, despite your work earnings, for that fortnight.

If your earnings are greater than your Work Bonus balance, the excess counts toward your income test for that fortnight.

This may mean you receive a lower pension payment for that fortnight.

What about investment income?

Pensioners do not need to declare the exact income from each of their financial investments, with one exception.

The exception is investment properties. Rental income is assessed separately, and you need to declare the actual amount.

For everything else, deeming rates determine your investment income for the purposes of the pension income test.

Deeming rates are going up today, but they are still generously low.

The lower deeming rate is now 1.75% for the first $66,800 worth of assets for singles and the first $110,600 for couples combined.

Everything above these amounts will be deemed to have earned the new upper deeming rate of interest, which is 3.75%.

Right now, that rate is still below what you’d actually earn if invested in plain old cash or ASX dividend shares. 

Cash in savings accounts is earning more than 5% these days.

As for dividend shares, the ASX 200 provided an average 4.23% dividend yield in FY26. (Check out which sectors paid the most here.)

Assuming full franking, that grosses up to a total of 6% earnings.

The post How much income can you earn and still get the age pension under new rules starting today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.