Australia’s Age Pension system is undergoing major reforms in 2025, with updates that will impact more than 2 million older Australians. From increased pension rates to revised income and asset thresholds, the changes will provide relief to many seniors struggling with rising living costs.
Centrelink and Services Australia have confirmed that adjustments will also include extended deeming rate freezes, updates to the assets test, and expanded eligibility for the Commonwealth Seniors Health Card.
If you are nearing retirement, already a pensioner, or assisting a loved one, here’s a detailed breakdown of the changes, their impact, and what steps you should take.
What Is the Age Pension?
The Age Pension is a government-funded income support payment designed to help older Australians cover essential living costs once they retire from full-time work. It is managed by Centrelink under Services Australia.
Eligibility depends on:
- Age (currently 67 from July 2023)
- Residency (must be an Australian resident for at least 10 years)
- Income and Asset Tests
As of April 2025, around 2.6 million Australians receive the Age Pension, making it one of the country’s most important social support programs.
Quick Summary: Age Pension Changes October 2025
| Aspect | Details |
|---|---|
| Payment Increase | Singles: $1,116.30/fortnight; Couples: $1,682.80/fortnight |
| Income Test Thresholds | Singles: $204/fortnight; Couples: $360/fortnight |
| Deeming Rates | Freeze extended to 30 Aug 2025 (0.25% lower, 2.25% upper) |
| Assets Test (from Aug 2025) | Singles: $301,750; Couples: $451,500 (homeowners) |
| Seniors Health Card Income Limit | Singles: $95,400; Couples: $152,640 |
| Work Bonus | $300 per fortnight, up to $7,800 yearly accrual |
| Official Source | Services Australia – Age Pension |
Key Age Pension Changes Effective April–October 2025
1. Higher Pension Rates
From 20 April 2025, Age Pension payments increased in line with biannual indexation:
- Singles: $1,116.30/fortnight (previously $1,096.70)
- Couples (combined): $1,682.80/fortnight (previously $1,653.40)
These amounts include the Pension Supplement and Energy Supplement. The rise reflects inflation in essentials like food, housing, and healthcare.
2. Updated Income Test Thresholds
To encourage part-time work and supplement incomes:
- Singles: Can earn up to $204/fortnight (previously $190) before pension reduction.
- Couples: Can earn up to $360/fortnight combined (previously $336).
Earnings beyond these limits reduce the pension by 50 cents per dollar.
3. Deeming Rate Freeze Extended
Centrelink uses deeming rates to assess income from financial assets (superannuation, shares, savings):
- Lower rate: 0.25%
- Upper rate: 2.25%
These will remain frozen until 30 October 2025, benefiting pensioners by keeping assessed income lower.
4. Assets Test Adjustments
From 1 October 2025, new limits apply:
- Single Homeowners: Up to $301,750 in assets
- Couple Homeowners: Up to $451,500 in assets
- Non-homeowners: Higher thresholds apply
These updates allow more Australians to qualify for a full or part pension, especially amid rising housing costs.
5. Expanded Commonwealth Seniors Health Card (CSHC) Access
Income limits have been raised:
- Singles: Below $95,400/year
- Couples: Below $152,640/year
The CSHC offers discounted prescriptions, cheaper medical services, and utility bill concessions, providing substantial savings for self-funded retirees.
6. Work Bonus Scheme Continues
- Pensioners can earn up to $300/fortnight from employment without affecting payments.
- Unused amounts accrue in a Work Bonus balance (up to $7,800 annually).
This encourages seniors to remain in the workforce part-time without penalty.
Why These Changes Matter
- Increased Payments: Better alignment with inflation.
- More Flexibility: Higher income and asset thresholds help part-pensioners keep benefits.
- Healthcare Support: CSHC expansion eases pressure on retirees excluded from the pension.
- Work Incentives: The Work Bonus keeps older Australians engaged in part-time jobs.
Ultimately, the reforms aim to balance social support with economic responsibility, ensuring pensioners can live with dignity.
Preparing for October 2025 Changes
Here’s what pensioners should do:
- Check eligibility via myGov.
- Update income and asset records regularly with Centrelink.
- Apply for the Seniors Health Card if newly eligible.
- Track superannuation balances as they may affect pension calculations.
- Seek advice from a Centrelink Financial Information Service (FIS) Officer.
FAQs About Age Pension Changes October 2025
1. How much is the Age Pension in October 2025?
Singles: $1,116.30/fortnight; Couples: $1,682.80/fortnight (combined).
2. What is the new income threshold for pensioners?
Singles: $204/fortnight; Couples: $360/fortnight combined.
3. Will deeming rates change in 2025?
No, they remain frozen at 0.25% and 2.25% until 30 October 2025.
4. Who qualifies for the Seniors Health Card under the new rules?
Singles earning below $95,400 and couples below $152,640.
5. Do I need to reapply for the Age Pension after the changes?
No, adjustments are automatic if you already receive the pension.
Conclusion
The Age Pension changes in October 2025 provide some much-needed financial relief for older Australians. With higher payments, adjusted thresholds, and extended deeming rate freezes, more people can qualify or retain benefits.
For the 2 million Australians affected, these reforms aren’t just technical updates—they are lifelines that help with everyday costs, healthcare, and stability in retirement.
Staying informed, updating records, and seeking official advice ensures pensioners get the maximum benefit possible.
For More Information Click HERE