How this calculator is built
Built by an Australian Chartered Accountant— the same engine the paid NestWise dashboard runs. Every rate table is verified against the source below every 1 July, 20 March, and 20 September and covered by a 200+ scenario regression suite.
How the Age Pension calculation works
Centrelink runs two separate testson every Age Pension application: the income test and the assets test. You’re assessed under both, and you’re paid under whichever test gives the LOWER amount. The calculator above runs them both and shows you which one is binding.
The income test
Centrelink adds up your assessable income per fortnight — employment income (after the Work Bonus exemption), deemed income on financial assets, foreign pensions, super income streams, rental income. Income up to a free area doesn’t reduce your pension; income above the free area reduces it at 50c per dollar (single) or 25c per dollar per person (couple).
The assets test
Centrelink counts every asset you own EXCEPT your principal home (if you’re a homeowner). Investment property, super, cars, business assets, household contents, term deposits, shares — all in. Up to a threshold (different for homeowner vs renter, single vs couple) you keep the full pension; above the threshold, your pension reduces by $3 per fortnight per $1,000 over.
Deeming — the invisible income
Centrelink doesn’t ask what your bank account or shares actually earned. It deems a return on your financial assets and counts that as income. From 20 March 2026 the deeming rates are 1.25%/yr on the first $66,800 of financial assets (single) and 3.25%/yr above that. The calculator above applies these rates automatically.
Run your own numbers above. Both tests fire on every keystroke; the binding test is tagged with an amber label so you can see which side is driving your figure.
Worked example: Margaret
Margaret is 70, single, owns her home outright. She has $230,000 in financial assets (bank + super in pension phase) and $8,000 of household contents. No employment income, no other income.
Income side
Deemed income on her $230,000 financial assets:
$66,800 × 1.25% = $835.00/yr
$163,200 × 3.25% = $5304.00/yr
Total deemed income: $6139.00/yr = $236.12/fortnight
The single income-test free area is $226.00/fortnight. Margaret’s $236.12/fn is $10.12 over — reduction of 50c × $10.12 = $5.06/fn. Pension under the income test: max ($1100.30/fn) less $5.06 = $1095.24/fn.
Assets side
Total assessable assets: $230,000 + $8,000 = $238,000. The single-homeowner full-pension threshold is $333,000. Margaret is BELOW the threshold — she gets the full pension under the assets test.
Result
Whichever test gives the LOWER pension applies. Income test ($1095.24/fn) wins. Margaret’s base pension is $1095.24/fn, plus Pension Supplement ($86.50) plus Energy Supplement ($14.10) = $1195.84/fortnight ($31,092/year).
Plug Margaret’s numbers into the calculator above to see the full hand-trace — every line of working is shown.
How NestWise compares to the Services Australia calculator
Services Australia’s online Payment and Service Finder will tell you whether you’re likely to qualify and roughly how much. The NestWise Age Pension calculator implements the same two tests, with rates source-traced to the same Services Australia rate tables. Figures should match within rounding.
What NestWise surfaces that the official tool doesn’t
- Both tests, side by side. You see the income-test result AND the assets-test result, with the binding one tagged. The official tool returns one number; you don’t see which lever is driving it.
- Full hand-trace shown. Open “show the working” and you see every line: deemed income calc, Work Bonus mechanics, income-test reduction, assets-test reduction, supplement add-ons.
- Work Bonus mechanics modelled. The $300/fortnight employment-income exemption AND the bank-balance carry-forward. Most basic calculators skip the bank.
- Live recalc. Drag the income input up by $10/fn and watch the pension move — useful for the “what if I work an extra shift?” question.
- Cut-off framing when you don’t qualify. When assets or income exceeds the cut-off, we point you at the Commonwealth Seniors Health Card (different test, no assets limit) instead of just returning “zero”.
What NestWise doesn’t model
- Overseas portability. If you spend significant time overseas, your pension may reduce proportionally to your Australian Working Life Residence — the calculator assumes domestic residence.
- Rent Assistance for pensioners. Renters get an add-on payment on top of the base pension. The calculator above doesn’t add this yet (coming).
- Defined-benefit super income streams with the 10% deductible amount — treated as standard income above.
- Compensation income offsets. Some compensation payments reduce the pension dollar-for-dollar; not modelled.
For everyday scenario-running (“what if I sell the investment property?”, “what if my partner picks up casual work?”), NestWise is faster. For a formal application, verify against your actual Services Australia assessment.
Five common mistakes when estimating the Age Pension
- Forgetting the principal home is exempt. Your family home is NOT counted in the assets test (if you’re a homeowner). Many people add it in and assume they’re ineligible when they aren’t.
- Counting super pension-phase balance separately from financial assets. Once you’re at Age Pension age, ALL super (accumulation AND pension phase) counts as a financial asset and is deemed. Treating only your bank balance as “financial” understates deemed income.
- Missing the Work Bonus on employment income. First $300/fn of employment income is exempt for pensioners, PLUS a bank that carries unused exemption forward up to $11,800. Many calculators apply the income test to gross employment income.
- Confusing homeowner vs non-homeowner thresholds. Non-homeowners get a higher assets-test threshold because they need to pay rent. If you sold your home recently, your status may have flipped — check before estimating.
- Assuming the lower test always wins. The LOWER pension wins (not the lower test — the lower OUTPUT). If your assets are modest but your income is high, the income test gives a low pension and the assets test gives a high one — you get the income-test result.
When to re-estimate your Age Pension
Centrelink reviews your situation every 6 months, with rates indexed twice yearly (20 March + 20 September) and lower thresholds updated 1 July. You should re-run the calculator when:
- Indexation date is approaching. Rates lift in March + September; thresholds lift 1 July. Your figure changes even if your situation hasn’t.
- An asset changes. Selling an investment property, downsizing the family home, inheriting a lump sum, gifting money to children — all shift the assets test.
- An income stream changes. Stopping work, picking up casual hours, starting a foreign pension, drawing down differently from super.
- Your relationship status changes. Couple thresholds + rates are different to single. A separation or a new partnership shifts the figure significantly.
- Your homeowner status flips. Selling the home + renting changes you from homeowner to non-homeowner with a much higher assets-test threshold — sometimes lifting you BACK into eligibility.
Run the calculator above with your new numbers, then read the full Age Pension guide before formally updating Centrelink. Talk to a Services Australia Financial Information Service officer (free) before major decisions like downsizing.
Related reading
The whole retirement entitlement picture, plain English, source-cited.
The Age Pension — what you get, how it's tested, what you actually take home →
The Age Pension is Australia's main retirement income payment. Currently up to $1,200.90/fortnight for a single pensioner (~$31,331/yr) once you pass the age, residency, and the lower of the income or assets test. This guide covers the whole picture — rates, both means tests, deeming, the Work Bonus, and what to do when you're close to but over the cut-off.
The Work Bonus — keep working without losing your pension →
The Work Bonus lets Age Pensioners earn $300/fortnight of employment income without it counting toward the income test. Unused exemption builds up in a "bank" balance up to $11,800 — letting you work seasonally or take on a part-time role without the taper biting. New pensioners start with a $4,000 bank balance. Centrelink applies it automatically.
Commonwealth Seniors Health Card — for self-funded retirees just over the Age Pension cut-off →
The CSHC gives you the same concession-card benefits a pensioner gets — cheaper PBS scripts, lower Medicare Safety Net threshold, state energy + transport concessions — but is income-tested at a much higher cut-off ($101,105/yr single, $161,768/yr couple combined). No assets test. Worth thousands per year for self-funded retirees who think they 'earn too much' for help.
Downsizer super contribution — $300k per person from your home sale, outside the caps →
Sold your main home and you're 55 or older? You can put up to $300,000 per person ($600,000 per couple) into super OUTSIDE the normal concessional and non-concessional caps. It doesn't count toward your total super balance for eligibility purposes at the time of contribution. The catch — you've got 90 days from settlement to act and there are specific eligibility tests.