Tens of thousands of retirees in Australia are leaving money on the table. A shocking number of older Australians are unaware of how much they could be entitled to from the Age Pension, with some potentially missing out on up to $46,000 a year. How is this happening, and why are people losing out on vital support when they need it most?
The Age Pension – A Lifeline for Many
The Age Pension is a critical safety net for retirees in Australia, providing financial support to those who meet the age, income, and asset eligibility requirements. However, research from Cbus super has revealed that many retirees aren’t making the most of this lifeline. According to the study, one in three Australians could be missing out on significant payments because they’re simply not applying in time—or not applying at all.
Bernie Dean, Cbus’ acting chief member officer, explains to Yahoo Finance that a lack of understanding of government entitlements is a key issue. In fact, many people delay their applications by up to a year, and once that time has passed, Services Australia does not backpay the pension. This can result in a huge financial hit. Couples could miss out on up to $900 a week if they’re not on top of their applications. That’s a lot of money that could be better spent in retirement.
The Problem with the System
The problem isn’t just about the money; it’s also about the system itself. According to Dean, the Age Pension process is “complex,” and the lack of confidence in understanding how it works is a real issue. Cbus found that 90% of their members approaching retirement age had little to no understanding of the entitlements available to them. Only 36% of those surveyed felt they had a solid grasp on the Age Pension eligibility requirements. This lack of knowledge leaves many retirees stuck in a cycle of uncertainty.
It’s not just the regular workers who are affected. Tradies, especially those in construction, often find themselves in a tough spot. Many older construction workers have already started dipping into their superannuation savings too soon because they don’t realize they could be receiving government assistance to help them through their retirement. The issue is even worse for those with an unstable work history, as they may not have enough super to fall back on once they retire.
Waiting Too Long to Apply
Another factor contributing to the problem is the delay in applications. Research from MUFG found that nearly one-third of existing pensioners waited more than a year to apply after becoming eligible. A further 16% of them waited over three years before submitting their claims. When people delay their applications, they miss out on months—sometimes years—of entitlements, which is especially problematic for those living on a fixed income in retirement.
Eligibility: Are You Missing Out?
So, how do you know if you’re eligible for the Age Pension? The eligibility requirements are straightforward, but many people overlook the income and asset tests. The Age Pension age is 67, but you’ll also need to meet certain criteria to qualify. For a single person, the income limit is $2,575.40 per fortnight, while for a couple, the limit is $3,934 per fortnight. As for the assets test, a single homeowner can have up to $714,500 in assets, while a couple’s limit is $1,074,000.
Non-homeowners have slightly higher asset limits. These criteria are updated regularly, so it’s important to stay informed about any changes. And remember, the Age Pension rate is adjusted every March 20 and September 20, which means your payments could increase or decrease depending on the economic climate.
