A new warning has been issued to 4.3 million Australians who fear they may outlive their retirement savings, leaving them dependent on the Centrelink age pension. Experts caution that this growing reliance on government support could result in significant financial hardship if individuals fail to meet strict eligibility criteria.
The findings come amid concerns that many Australians underestimate the limits and conditions of the pension. With an ageing population and rising living costs, financial specialists are urging people to take a closer look at their superannuation and long-term retirement strategies.
Millions Fear Insufficient Retirement Savings
A survey conducted by Yahoo Finance revealed that 65 percent of more than 1,200 respondents would depend on the age pension if their superannuation funds were depleted. This reliance highlights a widespread misconception about the accessibility of the payment.
According to Pascale Helyar-Moray, superannuation literacy expert at Finder, many Australians are unaware of the strict rules attached to the pension. “People just assume the age pension is there and there aren’t any criteria or qualifiers around it,” she said. “But they could not be further from the truth.”
Income Tests Determine Pension Eligibility
The age pension, administered by Services Australia, is subject to income thresholds that directly affect payments. For singles, the full pension is available if they earn up to $218 per fortnight, while couples can earn up to $380 per fortnight without any reduction.
Earnings above these levels result in reduced payments, with 50 cents deducted per dollar for singles and 25 cents deducted per dollar for couples. Those with higher incomes lose access entirely, with cut-off points at $2,516 per fortnight for singles and $3,844 per fortnight for couples.
Asset Limits Place Further Restrictions
In addition to income, assets play a decisive role in pension eligibility. These include financial investments, vehicles, real estate, business interests, annuities, and home contents. For a full pension, a single homeowner can hold assets worth up to $321,500, while a single non-homeowner can hold $579,500. For couples, the limit is $481,500 for homeowners and $739,500 for non-homeowners.
Individuals or couples with assets exceeding these limits may only qualify for a partial pension, with upper thresholds extending to $704,500 for single homeowners and $1.059 million for couples who own their homes. With only 2.6 million Australians currently receiving the age pension, experts argue that many future retirees are underprepared. Helyar-Moray advises Australians to focus on building their superannuation balances to avoid falling into financial distress later in life.
