Australia’s Age Pension system is seeing important updates in 2026. While there is no dramatic reform like increasing the retirement age, there are payment increases, deeming rate adjustments, and updated income and asset thresholds that will directly affect millions of older Australians.
With rising living costs and inflation pressures, these changes aim to support retirees while ensuring the pension system remains sustainable for the future. Here is a complete breakdown of the confirmed Age Pension changes in 2026.
Pension Payment Increase in March 2026
From 20 March 2026, Age Pension payments will increase as part of the government’s regular indexation process. Indexation adjusts payments twice a year (March and September) based on inflation and wage growth.
The expected increase in March 2026 is approximately:
- Around $22.20 per fortnight for eligible recipients.
This increase is designed to help pensioners manage rising costs such as groceries, utilities, rent, and healthcare.
Current Full Pension Rates (Before March 2026 Indexation)
- Single pensioner: $1,178.70 per fortnight
- Couple (combined): $1,776.20 per fortnight
These figures are subject to indexation adjustments in 2026.
Deeming Rate Changes in 2026
One of the biggest financial adjustments in 2026 involves deeming rates. Deeming rates are used by Centrelink to estimate how much income you earn from financial assets like:
- Savings accounts
- Shares
- Managed funds
- Term deposits
From March 2026, the new deeming rates are:
- Lower deeming rate: 1.25%
- Upper deeming rate: 3.25%
If you have financial assets above certain thresholds, Centrelink will apply the higher deeming rate to calculate your income under the income test. For some pensioners, this may slightly reduce payments if deemed income increases.
Age Pension Eligibility Rules in 2026
Pension Age
The Age Pension age remains at 67 years in 2026. There are no new increases planned beyond this age.
Income Test
For a full pension (single):
- You can earn approximately $218 per fortnight before your pension begins to reduce.
- Payments reduce by 50 cents for every dollar earned above the limit.
Assets Test (Single Homeowner)
- Full pension asset limit: Around $321,500
- Payments reduce once assets exceed this threshold.
Both the income and assets tests apply, and the test that results in the lower payment determines your final pension amount.
2026 Age Pension Summary
| Category | 2026 Details |
|---|---|
| Pension Age | 67 years |
| March 2026 Increase | Approx. $22.20 per fortnight |
| Full Pension (Single) | $1,178.70 per fortnight (before March adjustment) |
| Full Pension (Couple Combined) | $1,776.20 per fortnight |
| Lower Deeming Rate | 1.25% |
| Upper Deeming Rate | 3.25% |
| Income Test Limit (Single) | ~$218 per fortnight |
| Assets Limit (Single Homeowner) | ~$321,500 |
Why These Changes Matter
The Age Pension overhaul 2026 is mainly about maintaining balance. The government must support retirees facing higher living costs while also managing long-term budget pressures from Australia’s ageing population.
The payment increase provides short-term relief. However, the higher deeming rates could impact retirees with significant financial assets. Understanding how the income test and assets test work is essential for maximising entitlements.
Australians approaching retirement should review:
- Their total financial assets
- Their expected income
- Their eligibility under both tests
Careful planning can help ensure they receive the maximum possible pension.
The Age Pension Overhaul 2026 is not a dramatic reform but it brings meaningful updates. The March 2026 payment increase, updated deeming rates, and ongoing income and asset thresholds will shape how much retirees receive. While the pension age remains at 67, financial assessments will continue to play a major role in determining payments.
For millions of Australians, staying informed about these changes is essential. Whether you are already receiving the Age Pension or planning for retirement, understanding how indexation, deeming, and eligibility rules work can help protect your financial stability in 2026 and beyond.
FAQs
Has the Age Pension age increased in 2026?
No. The Age Pension age remains at 67 years for both men and women.
How much will the Age Pension increase in March 2026?
Payments are expected to rise by around $22.20 per fortnight due to indexation.
Will deeming rate changes reduce my pension?
It depends on your financial assets. Higher deeming rates may increase assessed income, which could reduce payments under the income test.