5 common myths about the Age Pension
Written and accurate as at: May 06, 2026 Current Stats & Facts
Centrelink isn’t always easy to navigate or understand, and the result is that a handful of persistent myths sometimes may get in the way of you receiving your full entitlement.
Below, we set the facts straight.
Myth #1: Owning your home means you won’t qualify
When you apply for the Age Pension you’ll be subject to two tests, and whichever test produces the lower pension amount will be the one that determines your payment.
- The income test assesses what you earn (such as rental income and interest from savings accounts)
- The assets test looks at what you own (such as money in a bank account, cars, shares and real estate).
Some people believe that the value of the home you live in can disqualify you from receiving the Age Pension, but this isn’t correct. Your principal place of residence is considered an exempt asset, meaning whether it’s worth $500,000 or $5 million, it won’t count towards the assets test.
But while means testing doesn't extend to the family home, owning yours means you’ll be subject to lower thresholds for your other assets. Non-homeowners, meanwhile, will have higher asset value limits, and can hold more in assets before their Age Pension begins to taper.
Myth #2: You can offload assets to get a higher payment
Have you ever wondered if you can boost your pension by transferring money or assets to your family? If so, we’re sorry to burst your bubble. Centrelink has measures in place to prevent people from artificially lowering their assessable wealth.
While giving gifts is allowed, anything that exceeds certain limits is still counted as part of your assets and income for five years. Currently, those limits are $10,000 in a single financial year and $30,000 over five financial years.
This applies regardless of your motivations, so even if you’re genuinely trying to give your children a leg up, any assets you give away (or sell for less than market value) will be treated as if you still own them for a period of time.
Myth #3: Your assessment and eligibility doesn't change
Centrelink isn’t all-seeing and all-knowing – if there are any changes to your circumstances then you have an obligation to inform them so they can adjust your Age Pension amount accordingly.
Many times this can work in your favour, as Centrelink might be relying on outdated information to calculate your payment. For example, lifestyle assets (like cars, boats and caravans) won’t automatically have a rate of depreciation applied to them, and if they’ve seen a significant dip in value you could be getting a lower payment than you’re entitled to.
And if you’ve recently renovated your home, that’s less money in your bank account to be assessed under the assets test. While your home will have increased in value, the fact it’s an exempt asset means you might now qualify for a higher payment.
Myth #4: You can’t work and receive the Age Pension
Many people assume that any paid work you take on – whether it’s part-time employment or odd jobs here and there – will immediately reduce your pension. But the reality is things are a bit more flexible.
Thanks to the Work Bonus, you’re able to earn $300 of employment income each fortnight without it being counted towards the income test. What’s more, any unused portions will accumulate in an income bank of sorts, which can be tapped into to offset future earnings. This balance can go up to $11,800.
Myth #5: You have to choose between super and the Age Pension
For those who have built up a sizeable nest egg via super, it’s easy to think you’ve effectively opted out of receiving government support. But it’s not an either-or situation – you might be able to receive both super and the Age Pension at the same time, depending on your circumstances.
Super is subject to the income and assets test, but even if you’re not eligible for the full Age Pension, you might still qualify for the part Age Pension. And as you draw down on your super over the years, the total value of your assets will naturally decrease. This might actually trigger a higher Age Pension payment over time.
If you’re approaching Age Pension age and have more questions, consider speaking to a financial adviser.