Smart strategies to maximise your super and Age Pension

Brought to you by AMP SuperSeptember 30, 2026 — 4:30amMany Australians are surprised to learn that receiving income from superannuation does not necessarily mean they lose access to the Age Pension.“Learning how your super and the Age Pension can work together is one of the most valuable retirement-planning exercises you can undertake,” says Ben Hillier, Director, Retirement at AMP.Retirement is often about striking the right balance between using your super to enjoy life today while also making the most of any Age Pension entitlement available to you.Alamy Stock PhotoHillier says the Age Pension is designed to top up superannuation income for those with smaller balances while providing support to those who have used up all their super or never had any to begin with.“Many retirees assume they need to preserve their super for as long as possible, but in reality, retirement is often about striking the right balance between using your super to enjoy life today while also making the most of any Age Pension entitlement available to you.”Below, Hillier answers the questions his clients most often ask about super and the Age Pension and flags instances when it’s worth seeking further advice.How is eligibility for the Age Pension assessed?Age Pension eligibility is determined by two means tests: the assets test and the income test.“Super and the Age Pension are designed to work together, not independently, to support spending throughout retirement.”Ben Hillier, Director, Retirement at AMP“The assets test assesses the value of assets such as superannuation, investments, bank accounts and other financial resources,” Hillier says.“The income test looks at the income assumed to be generated from those assets, and at any other sources of income.”Whichever test results in the lowest Age Pension eligibility is the one that is used. Currently, older Australians with modest assets who are receiving $226 or less in income per fortnight are eligible for the full Age Pension.A part pension is available to those earning up to $2701 per fortnight for a single person and $4128 per fortnight combined for a couple.What are deeming rules?To determine the income generated by financial assets, including superannuation, Centrelink uses deeming rules.“Rather than assessing actual investment income, it assumes investments produce income at set deeming rates,” Hillier says.“This means a retiree’s Age Pension entitlement can be affected by changes in those deeming rates, regardless of how their investments actually perform.”Understanding deeming rates can help pre-retirees structure a more favourable asset portfolio, Hillier says.“However, the interaction between deeming rules and the asset and income tests can be complex, which is why many retirees benefit from seeking advice before making significant financial decisions.”Is there a method that allows retirees to draw large amounts from their super while still receiving the full Age Pension?Centrelink’s basic approach to the Age Pension – the wealthier you are, the smaller your pension – means there is no meaningful way to “hack the system”.“Super and the Age Pension are designed to work together, not independently, to support spending throughout retirement,” Hillier notes.However, your Age Pension allowance increases if your superannuation payouts decrease, meaning you can intentionally draw down your super in earlier years to access a larger Age Pension amount later on.What should retirees know about the Age Pension and gifting rules?Many retirees want to help children or grandchildren financially. However, it is important to understand that Centrelink has specific gifting rules.“Under these rules, singles and couples can generally gift up to $10,000 in a financial year, and no more than $30,000 over any rolling five financial years, without affecting Age Pension means testing,” Hillier says.Amounts above these limits are treated as deprived assets. “This means Centrelink continues to count the excess amount when assessing your Age Pension for five years after the gift, as if you still had the money and were earning income from it,” Hillier says.Does accumulating as much super as possible in my working years make sense if I can also access the Age Pension in retirement?Hillier points out that, by the standards of many Australians, the Age Pension is modest and is not designed to support a retirement lifestyle that involves international travel or other larger one-off expenses.“Super provides flexibility, while the Age Pension acts more as a safety net and a stable source of income for those who qualify,” he says.“Thinking holistically about these issues before you retire, and seeking advice where necessary, is the best way to create a comfortable life in your later years.”Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.Dan F Stapleton writes on First Nations issues, visual art, property and more. His writing has appeared in The New York Times, the Financial Times and others. He is based in Sydney.From our partners