Is Australia’s Age Pension ending? Not at all—but major changes are arriving September 20, 2025, shaking up who qualifies and how much is paid.
With the largest indexation boost in two years, slammed asset and income threshold shifts, and adjustments to the deeming rates, many pensioners are asking: What’s changing—and what does it mean for me?
This article dives deep into the September 2025 changes, explaining exactly how much the Age Pension will increase, how the income and asset tests are changing, what the new deeming rates mean, and who stands to gain or lose.
We’ve packed everything into a clear table and breakdown so you can plan confidently.
September 20, 2025- What’s Changing in Plain Terms
1. Big Pay Raise via Indexation-
- Singles: receive an extra $29.70 per fortnight, raising the total to $1,178.70
- Couple (each): each gets an extra $22.40 per fortnight, totalling $1,777.00 combined
2. Harsher Deeming Rates (Impacting Income Test)-
- Lower threshold: now $64,200 (singles) and $106,200 (couple combined)
- Deeming rates: increased by 0.5 percentage points
- Lower band: from 0.25% → 0.75%
- Upper band: from 2.25% → 2.75%
- Many will see reduced pension due to this shift, despite the indexation boost.
3. Raised Income & Asset Test Thresholds-
- Thresholds are nudged upwards moderately—allowing more retirees to qualify for some level of pension access.
4. Work Bonus and Other Support-
- No changes announced for Work Bonus, which still lets part-time working pensioners earn up to a certain amount without reducing their pension.
- Overall, the pension system is being nudged toward greater sustainability—keeping it alive, not ending it.
At-a-Glance- The September 2025 Age Pension Update
| Category | Previous | New (from 20 Sept 2025) | Net Impact |
|---|---|---|---|
| Single pension rate (fortnightly) | ~$1,149.00 | $1,178.70 (+$29.70) | Noticeable income lift |
| Couple rate (each, fortnightly) | ~$866.10 | $888.50 (+$22.40 each; $1,777 combined) | Couples gain modest boost |
| Lower deeming rate | ~0.25% | 0.75% | More deemed income, reducing pension for savers |
| Upper deeming rate | ~2.25% | 2.75% | Same—adds deemed income, impacting means-tested pension amounts |
| Deeming asset thresholds | Lower | $64,200 (single); $106,200 (couple) | Higher exempt thresholds—small relief for asset-holders |
| Income & Asset Test thresholds | Lower | Slight ↑ | Slightly kinder eligibility for some |
| Overall outcome | Mixed | Mixed | Some get more, others may get less or stay the same—depends on personal profile |
Who Gains—and Who May Lose?
1. Likely Beneficiaries
- Full-rate pensioners with minimal assets/income—enjoy the full boost.
- Couples with low assets—benefit from both indexation and higher deeming thresholds.
2. At Risk
- Those with substantial financial assets—the higher deeming rates could reduce pension payouts, even if they only benefitted from small asset changes.
- Around 180,000 full-rate pensioners may drop to part-rate due to deeming changes.
- Part-rate pensioners may see indexation offset by deeming income adding back into the test.
3. Neutral or Mixed
- Pensioners with modest income/assets—might see net gain, depending on balance of indexation vs deemed income.
- Part-time working pensioners—still enjoy the Work Bonus, unaffected by these changes.
Why These Changes Are Happening
- Indexation ensures pension keeps pace with cost of living and wages.
- Deeming rate adjustments reflect real investment returns now that emergency pandemic-era freezes are lifted.
- Threshold increases aim to shield more retirees from being pushed off the pension.
- Overall goal: sustainability, fairness, and continued support—not dismantlement.
No, Australia’s Age Pension isn’t ending—but September 20, 2025 brings its most significant update in years, combining a strong indexation boost with tougher deeming rates and adjusted eligibility thresholds.
- Singles gain ~$29.70/fortnight; couples gain ~$22.40 each
- Deeming rates rise, likely reducing pensions for those with higher asset incomes
- Income/asset thresholds increase modestly, offering some relief
- Impact varies—some benefit, some may receive less (or no net gain)
The message is clear: Australia’s Pension is evolving to stay viable, not disappearing. If you’re affected, take a close look at your asset and investment structure to prepare—because how you’re affected might depend entirely on your personal financial mix.
FAQs
No. It’s not ending. The system is being refined: pensions are going up for many, while eligibility rules (especially related to income from assets) are being tightened. The goal is to maintain support while ensuring it remains sustainable.
Possibly. If you have significant savings or investments, the higher deeming rates could increase your “deemed income,” reducing your pension under the income test—even as indexation gives you the base boost.
The changes apply from 20 September 2025, one of two regular update points (the other is March). That means the new amounts and rules will apply to pensions paid on or after that date—mark your calendar.