Starting on September 20, 2025, more than 2.6 million Australian seniors will receive one of the largest increases for the Age Pension in recent history. The government will increase the Age Pension’s fortnightly payment for single pensioners by $29.70 and for couples by $22.40 each, which is a significant step towards alleviating the financial strain of living in Australia.
This increase is timely as more than one in four older Australians live in poverty. COTA Australia’s CEO Patricia Sparrow highlighted the importance of the change stating, “the notion that all older Australians are affluent is a fallacy” and noted that this additional aid will deliver “genuine relief” for those grappling with high inflation. Effective September 2025, the full Age Pension will increase to $1,178.70 a fortnight for singles with an approximate annual income of $30,646. For couples, each will receive $888.50 per fortnight for a combined $1,777 which is around $46,202 a year. These increases include an amplification in the maximum basic rate, the supplemental pension, and an increase in energy allowance. Minister of Social Services, Tanya Plibersek, emphasized during the indexation announcement that the funding was intended to assist Australians in managing everyday cost of living challenges like groceries and healthcare.
Increased Payment and Eligibility Brings the Benefit of More Australians
In addition to the increases in payments, the September revisions include changes to the asset and income limits that are likely to increase pension eligibility for tens of thousands of Australians. All asset test limits have increased, and now single homeowners can possess $714,500 in assets and still qualify for the pension (an increase from $704,500). These income limits are now more generous over the board as well. A single pensioner can now lose their pension once their income exceeds $2,575.40 a fortnight, a rise of $59.40. For couples, the total income cap now stands at $3,934.00 a fortnight, an increase of $89.60. These changes are particularly relevant for those who previously missed out on pension eligibility by relatively small margins. The changes mean that a lot more people with slightly higher assets or income are now likely to receive an income of at least a partial pension, and in addition, receive important concessions and supplements.
Very Noticeable Adjustments to Deeming Rates
The increased pension payments are great news, however, there are changes to deeming rates that coincide with the pension payments that seniors will have to pay attention to. Deeming rates that have been at the emergency pandemic levels since 2020 are set to increase to more reasonable levels as a 0.5% increase will be realized.
The new deeming rates will be 0.75% for financial assets below $64,200 for singles ($106,200 for couples) and 2.75% for assets above these amounts. National Seniors Australia anticipates approximately 180,000 full-rate pensioners will be transitioned to part-rate pensioners because of this policy reform. Although, many are still expected to receive higher payments as a result of the substantial indexation increases.
Taking Action Initiatives: Steps for Seniors with Increased Rates
Seniors are expected to adapt to these new changes and better understand what entitlements await them. First, check applying eligibility criteria through the updated calculators that capture the September 20 changes as they will reflect the new changes. Ensure to set reminders to check the new payment rates through the Centrelink account after payments are updated.
