Age Pension payments increase from 20 September 2026, with higher maximum fortnightly payments for both singles and couples.
16 September, 2026
Age Pension changes from September 2026
First Financial Team
The Age Pension is an important source of retirement income for many Australians. Even for retirees with substantial superannuation and other investments, a part Age Pension can contribute to the overall financial strategy.
From 20 September 2026, several important changes will come into effect. The maximum Age Pension increases, the upper income and assets test thresholds rise, and deeming rates increase.
While the higher pension rates are welcome, the changes demonstrate why Age Pension planning is rarely as simple as looking at one number.
"Your entitlement depends on how your income, investments and assets interact with Centrelink rules."
How much is the Age Pension increasing?
From 20 September, the maximum Age Pension for a single person increases by $36.80 per fortnight to $1,237.70. For couples living together, the maximum rate increases by $27.80 each to $933.00 per fortnight. That provides a combined maximum payment of $1,866.00 per fortnight.
For a couple receiving the maximum pension, that represents an increase of approximately $1,445.60 over a full year. For a single pensioner, the annual increase is approximately $956.80.
However, not every pensioner will receive the maximum increase.
Part Age Pension thresholds are also changing
The Age Pension is means-tested. Centrelink applies both an income test and an assets test, with the test producing the lower pension entitlement determining how much you receive.
From 20 September, the upper thresholds determining when a part Age Pension reduces to zero are increasing. The lower thresholds applying to the full Age Pension are not changing in September. They were adjusted on 1 July 2026.
The movement in the upper thresholds may be significant for retirees sitting around the boundary for part-pension eligibility. Someone who previously had slightly too many assessable assets or too much assessable income may find their position changes. This is one reason we believe Age Pension eligibility should be reviewed regularly.
Deeming rates are increasing
There is another change retirees need to consider. Centrelink does not use the actual income earned from financial investments when applying the Age Pension income test. Instead, it uses prescribed deeming rates to estimate the income generated by those financial assets.
From 20 September, the lower deeming rate increases from 1.25% to 1.75%, while the upper rate increases from 3.25% to 3.75%.
So, what does this mean for singles and couples?
For singles, the lower rate applies to the first $66,800 of financial assets, and the higher rate applies to amounts above that threshold. For couples, the lower rate applies to the first $110,600 of combined financial assets, with the higher rate applying to the balance. Financial assets that may be subject to deeming include bank accounts, term deposits, shares and managed investments.
For some pensioners, a higher deemed income could offset part of the benefit provided by the September pension increase.
The Age Pension is part of the bigger picture
With the changes, the important question isn’t simply, “How much Age Pension can I get?” The more appropriate question is: “How do all my financial resources work together”
The Age Pension may be one component. Superannuation pensions, investment income, cash reserves and other assets also contribute. How those resources are structured influences your income, tax position, flexibility and potentially your Centrelink entitlement.
The objective should never be to make financial decisions only to maximise the Age Pension. Instead, your Age Pension position should be considered as part of your complete retirement strategy.
Small changes create an opportunity to review your plan
These changes create an opportunity. As we know, rules change, markets shift, spending habits fluctuate, and investment balances rise and fall. On top of that, priorities can pivot throughout retirement.
At First Financial, we model these different components together. We can help you understand how your superannuation, investments, retirement income and potential Centrelink entitlements interact and what they mean for your longer-term financial position.
If the September Age Pension changes affect you, or you’re approaching retirement and want to better understand your potential entitlement, now may be a good time to review the numbers.
“If these changes affect you, now is a good time to review the numbers.”
The financial advice experts
The team at First Financial comprises financial experts who help hundreds of Australians retire well and make informed, intelligent financial decisions. We cover everything from retirement and financial advice, investment and wealth management, superannuation and SMSF, insurance, tax, aged care, legal and lending services.
Contact us for holistic, well-rounded financial management strategies.
Key Takeaways
Higher upper-income and assets test thresholds may expand eligibility, particularly for retirees who are currently close to the cut-off for a partial Age Pension.
Higher deeming rates could affect your entitlement, as Centrelink will assess more deemed income from financial assets such as bank accounts, term deposits, shares and managed investments.
Review the Age Pension as part of your complete retirement strategy. Changes to Centrelink rules can affect how your superannuation, investments, cash reserves and pension entitlements work together.
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Frequently Asked Questions
Will I automatically receive the full Age Pension increase from 20 September 2026?
Not necessarily. The amount you receive depends on your individual circumstances and how Centrelink’s income and assets tests apply to you.
Could I become eligible for a part Age Pension under the new thresholds?
Potentially. If you were previously just above the upper income or assets test threshold, the increases from 20 September may bring you within the eligibility limits.
I already receive a part Age Pension. Could my payment change?
Yes. Changes to the pension rate and upper means-test thresholds could increase your entitlement, while higher deeming rates could increase the income Centrelink assesses from your financial investments.
How will the higher deeming rates affect my Age Pension?
From 20 September, the lower deeming rate rises from 1.25% to 1.75% and the upper rate from 3.25% to 3.75%. If you hold financial assets such as bank deposits, term deposits, shares or managed investments, this could increase your assessed income and potentially affect your pension entitlement.
Do the deeming rate changes affect me if my investments earn less than the deeming rate?
They can. Centrelink generally applies the prescribed deeming rates to relevant financial assets rather than using the actual income those investments earn when assessing your Age Pension under the income test.
Should I change my investments to increase my Age Pension entitlement?
Your investment and retirement decisions should consider your overall financial position rather than focusing solely on maximising the Age Pension. Superannuation, investments, cash flow, tax, risk and your longer-term retirement objectives should all form part of the decision.
Can First Financial check whether the September changes affect my retirement income?
Yes. First Financial can review how your superannuation, investments, other financial resources and potential Centrelink entitlements work together and help you understand what the changes could mean for your retirement strategy.
I'm approaching retirement. Should I contact First Financial about my potential Age Pension entitlement now?
Yes, understanding your potential Age Pension position before retirement can help you make more informed decisions about superannuation, investments and retirement income. Contact First Financial to discuss how Centrelink entitlements can be considered as part of your broader retirement plan.