Centrelink Age Pension 60% Rule : Australian retirees may be able to increase their Centrelink Age Pension under a rule that gives certain lifetime annuities special treatment under the pension assets test. Known as the 60% rule, this provision could make a difference for eligible older Australians who are planning how to use their superannuation and retirement savings.
However, the rule does not mean every retiree will automatically receive a higher pension. The outcome depends on the type of financial product, the applicable Centrelink assessment rules, and the person’s overall income and assets.
What Is the Centrelink 60% Rule?
The 60% rule relates to how certain qualifying lifetime income streams, including eligible lifetime annuities, are assessed under Australia’s social security means-testing arrangements.
A lifetime annuity generally involves using a lump sum to purchase a regular income payment for the rest of your life. Depending on the product and its terms, it can provide retirees with a more predictable source of income.
Under the relevant concessional assessment rules, 60% of the purchase price of an eligible lifetime income stream may count towards assessable assets during the applicable period. This means the amount assessed under the assets test can be lower than the original purchase price.
For example, if a qualifying annuity costs $100,000, an initial 60% assessment would mean $60,000 is counted as an asset under that rule. This is an illustration of the asset assessment, not a guaranteed increase in pension payments.
The exact treatment depends on the product’s eligibility and the applicable rules.
How Could the 60% Rule Help Retirees?
The Age Pension is means-tested. Services Australia assesses a person’s income and assets to determine whether they qualify and how much they can receive.
When an eligible annuity receives concessional asset treatment, it may reduce the assets counted under the pension assets test. For retirees whose pension is limited by that test, this could improve their eligibility or payment rate.
Consider the following simplified example.
| Example | Amount |
|---|---|
| Initial annuity purchase price | $100,000 |
| Illustrative assessable proportion | 60% |
| Amount counted under the 60% rule | $60,000 |
| Difference from the original purchase price | $40,000 |
The $40,000 difference is not a cash bonus from Centrelink. It is the difference between the purchase price and the illustrative amount assessed as an asset.
The actual pension outcome also depends on the income test, other assets, relationship status, and other eligibility requirements.
Who May Benefit From This Pension Rule?
The rule may be relevant to retirees who have reached Age Pension age and are considering how to structure their retirement income.
It may be worth investigating if you:
- Are aged 67 or older and meet the Australian residency requirements.
- Have superannuation, savings, or other investments.
- Are receiving a part pension or expect to qualify for one.
- Are considering a qualifying lifetime annuity for retirement income.
- Want to understand how your assets affect your Centrelink entitlement.
Important: Purchasing an annuity does not guarantee a higher Age Pension. Eligibility depends on the product’s terms and your individual financial circumstances.
What Is Australia’s Age Pension Eligibility Age?
Australia’s Age Pension age is currently 67 years. Applicants must also satisfy residency requirements and the relevant income and assets tests.
The main family home is generally excluded from the assets test while it remains your principal residence, although other rules may apply in particular circumstances.
Services Australia uses both the income test and assets test to calculate pension entitlement. The test that produces the lower payment generally determines the rate paid.
How Much Age Pension Can Retirees Receive?
The maximum Age Pension depends on whether a person is single or partnered, along with applicable supplements and eligibility conditions. Payment rates are regularly indexed, so retirees should check the current official figures before making financial decisions.
The following table shows the standard maximum rates published by Services Australia for the period beginning 20 September 2026.
| Payment category | Maximum fortnightly amount |
|---|---|
| Single person, including standard supplements | $1,237.70 |
| Each member of a couple, including standard supplements | $933.00 |
| Couple combined | $1,866.00 |
These are maximum standard rates, not guaranteed payments for every pensioner. Individual entitlements may be lower because of income, assets, or other eligibility factors.
What Should Retirees Consider Before Buying an Annuity?
Although an annuity may provide regular income and potentially receive concessional treatment under social security rules, it is important to consider the full financial picture.
Before committing a large amount of retirement savings, review:
- Income security: Determine whether the annuity provides payments for life or for a fixed term.
- Access to money: Check whether you can withdraw funds or access a lump sum in an emergency.
- Fees and conditions: Understand the costs, guarantees, and terms of the contract.
- Inflation: Consider whether the income payments can keep pace with rising living costs.
- Centrelink treatment: Confirm how the exact product will be assessed under both the income and assets tests.
A product that improves the assets-test outcome may still be unsuitable if it reduces access to money or does not meet your retirement needs.
How to Check Your Age Pension Entitlement
Retirees can start by reviewing the official Age Pension information on the Services Australia website.
- Check whether you meet the age and residency requirements.
- Calculate your assessable assets, including savings, investments, and relevant superannuation.
- Review the income test and assets test.
- Ask the provider of any proposed annuity for written details about its social security treatment.
- Contact Services Australia’s Financial Information Service for information about retirement-income options.
A qualified financial adviser can also help compare an annuity with other retirement-income strategies. Seek advice based on your personal circumstances rather than relying on the 60% rule alone.
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