A Retiree’s Guide to Understanding Recent Age Pension Changes
Wednesday, March 18, 2026
Age Pension payments are reviewed twice each year, in March and September, to help maintain their value as the cost-of-living changes. For many older Australians these changes can influence how much pension they receive, particularly for those retirees who rely on a combination of personal savings and government support.
Australia’s retirement income system changes regularly, and over the past year retirees have seen adjustments to both the Age Pension and the way investment income is assessed through deeming rates.
For many older Australians these changes can influence how much pension they receive, particularly for those retirees who rely on a combination of personal savings and government support.
Regular Pension Adjustments
The most recent review resulted in a modest increase to pension payments to be applied from 20th March 2026. For a single person on full Age Pension, the increase is $20.60, and for couples it will be $31.00. While the increase is very modest, it offers some assistance toward rising costs in areas such as groceries, utilities and healthcare.
In addition to increases in the maximum pension payment, some of the income and asset thresholds used to assess eligibility are also adjusted periodically. This can be beneficial for retirees who are close to the eligibility limits, as small increases in these thresholds may allow them to retain or increase their pension entitlement.
Deeming Rates Have Now Increased
Alongside pension adjustments, the government has also updated deeming rates, which are used by Services Australia to estimate the income earned from financial investments.
Rather than assessing the actual income received from bank accounts, shares or managed funds, the deeming system assumes investments earn income at a set rate. This estimated income is then used when applying the Age Pension income test.
After being held at historically low levels for several years, deeming rates increased in September 2025. The lower deeming rate rose to 0.75%, while the upper rate increased to 2.75% for financial assets above the relevant thresholds.
How These Changes May Affect Retirees
For retirees receiving the full Age Pension, the payment increase generally results in a small rise in fortnightly income.
However, retirees receiving a part pension may notice a different outcome. Because higher deeming rates increase the income that Centrelink assumes investments generate, some retirees may have a higher level of assessed income under the income test.
This may result in:
- A reduction in Age Pension payments
- Being moved from a full pension to a part pension
- Changes to eligibility for benefits linked to pension status, such as the Commonwealth Seniors Health Card.
Reviewing Your Position
Because Age Pension entitlements depend on both income and assets, even relatively small policy adjustments can influence the amount retirees receive.
For those relying on a mix of superannuation, investments and government support, it can be worthwhile reviewing your financial position regularly. Understanding how the Age Pension rules interact with your broader retirement strategy can help ensure your income remains sustainable over the long term.
A financial adviser can help assess how these changes apply to your circumstances and explore strategies that may help you manage your retirement income more effectively.
For more Information contact Mark Digby at Maher Digby Securities Pty Ltd - Financial Advisers – AFSL No. 230559. This document was prepared without taking into account any person’s particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such. Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial advisor.