Are you getting the Age Pension you’re entitled to?

Mal Smith • September 26, 2023

If you receive the Age Pension, recent changes to means testing for retirees could put more money in your pocket. These changes impact the assessment of certain lifetime income streams that began on or after 1 July 2019 (including any that you take up now).

Lifetime income streams

There are two main types of lifetime income streams:

1. lifetime superannuation pensions, which are purchased from a super fund; and

2. lifetime annuities, which are purchased from a life company with either your super or savings.

Once purchased, the payments from these income streams will last for the rest of your life.

Your rate of Age Pension is calculated using both an income test and an assets test. Not surprisingly, the test resulting in the lowest rate will apply.

Lifetime income streams are different to many other types of investments, such as bank accounts, account based pensions and investment properties, where generally 100% of the asset is assessable.

Certain lifetime annuities receive more favourable treatment from the assets test.

Under the social security assets test, generally 60% of the purchase price of certain lifetime annuities will count as an asset through to age 84, or for a minimum of five years.

From then on, only 30% of the purchase price counts as an asset. Under the social security income test, 60% of any payment you receive from this type of income stream is assessable as income for social security purposes.

Don’t miss out on the Age Pension if you don’t have to

Those most likely to benefit from these changes are retirees who receive a part Age Pension because of the assets tests and who have purchased a lifetime income stream on or after 1 July 2019.

If you were getting a reduced Age Pension because of the assets test, then investing in a different type of structure on or after 1 July 2019 – like a lifetime income stream – could change your Age Pension outcomes.

In addition to benefiting from a lifetime income stream, they could actually get an increase in Age Pension as well.

Find out if you’re eligible for more Age Pension

It’s important to speak with a financial adviser about your personal circumstances before making any financial decisions. In some cases, the difference can be significant.

While every situation is unique, take the example of a retiree who was able to boost their initial annual Age Pension entitlement from around $14,500 to $19,000 by investing part of their savings in a lifetime annuity.

That extra $4,500 worth of Age Pension could make a significant difference to their retirement income and how long their retirement assets last. It’s not necessarily a dollar or two here and there. It could mean thousands a year in increased Age Pension for a retiree – simply from how they choose to structure their assets.

Lifetime annuities as a source of income

Using the income generated from a lifetime annuity to complement other sources of income (such as the Age Pension) is a common approach for retirees. Its generally seen that a lifetime annuity complements other sources of income in retirement. It’s rare to see 100% of anyone’s income coming from one source.

Making the means test work for you

Here’s how using part of your savings to purchase an eligible annuity as your lifetime income stream might look: Working with your financial adviser, you’d calculate your total spending requirements once you retire, including both essential and discretionary spending.

Then you work out where that number sits relative to the maximum rate of Age Pension. Let’s take a couple who are eligible for the maximum rate of Age Pension – about $36,000. If they can get by on $36,000, they might not need another layer of income. But if they worked out that their essential spending was more than $36,000 – say it’s $40,000 – then they could buy $4,000 worth of additional income a year to get them up to $40,000 through a lifetime annuity to cover their basic living costs for life.

Because an annuity can offer either a fixed or inflation linked payment, you have the peace of mind of knowing your income will be stable for the rest of your life – no matter how long that is. This is particularly valuable when you want certainty of income without some of the risks associated with other types of market-linked investments.

Essentially, it’s allocating resources to buy a very secure lifetime income stream, that sits on top of the maximum rate of Age Pension you are eligible for. So, no matter what happens, you can always afford what you need throughout your retirement.

Important notes: Age Pension benefits described above will not apply to all individuals. Age Pension outcomes depend on an individual (or couple’s) personal circumstances and may change over time. While lifetime income streams may immediately benefit some Age Pension eligible retirees who are assessed under the assets test, in later years, if assessed under the income test, any ongoing Age Pension benefits may be reduced. For market-linked lifetime annuities, only the first year’s monthly income amount is guaranteed. After the first year, monthly payments will move up or down annually adjusting to the changes in your chosen market-linked indexation payment option. In periods of strong market performance, any Age Pension benefits may reduce to reflect the higher income received. Consult your financial adviser about potential impacts on your personal circumstances and whether a lifetime income is right for you.

Source: Challenger

The information in this article does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Capstone Financial Planning nor their directors, employees or authorised representatives gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document. Principal Wealth Management Pty Ltd trading as BMO Financial Solutions ABN 53 109 336 601 is a Corporate Authorised Representative (CAR 277821) of Capstone Financial Planning Pty Ltd ABN 24 093 733 969 Australian Financial Services Licence (AFSL) No. 223135.

Do you know how your super is performing?

By Nikki Ashurst • November 2, 2026
Many Australians don't know how their super fund has performed or what it invests in. Are you one of them? Here's what to check and why it matters. Do you know how your super fund performed over the last two years? Many Australians don’t and are working towards their financial future without fully understanding one of their most important assets and without a clear plan for how their super may support them in retirement. That's not surprising, as many people view super as something that should run quietly in the background while they're busy with careers, families and everything else that life throws at them. But when you’re not sure what’s happening behind your balance, it’s harder to know whether you’re on track, whether your current approach reflects your goals or what opportunities might be available to help you make the most of what you’ve built so far. Your super isn't sitting in an account, it's invested Super is invested by a fund on your behalf across a mix of assets, with those investments working to grow your balance over time. Those include: Shares Ownership in Australian and international publicly listed companies. Their value can rise and fall, sometimes substantially over short periods but shares can provide capital growth over the long term. Property and infrastructure Real assets like office buildings, shopping centres, airports and energy networks. They can produce income and don't always behave in the same way as share markets, helping diversify investment holdings. Fixed interest and bonds Lending to governments and companies in return for interest. They can provide regular income and be steadier than shares, although returns and risk vary depending on the investment. Cash Generally, the most stable and lowest risk investment type. It can provide stability and faster access to money but typically offers lower longer term return potential. The investment option you choose determines the mix of assets held in your super based on your risk appetite. Most super funds offer options from conservative to high growth. If you’re young, a growth option with a higher exposure to growth assets like shares could offer higher returns over time – but it also comes with higher risk. As retirement nears, you might want to consider a more conservative approach with more defensive assets, like bonds for example to protect your savings. If you've never made a choice, you're probably in your fund's default option, which is designed to suit a broad membership. It’s worth knowing whether the mix you're in matches your circumstances and goals, including how far you are from retirement. Why performance alone is not a true comparison If you're thinking about how your super compares, returns are often where people start. The trouble is that a return figure means nothing without context: What it's being compared to Growth and conservative options invest differently and with different levels of risk. Compare like with like or the comparison may not be genuine. The comparison period A single year can be heavily influenced by short term market conditions. Super is measured in decades, so five, seven and ten year returns tell you far more about whether a fund is consistently doing its job, albeit not a predictor of future performance. Fees and tax Published returns should reflect investment fees, costs and tax but administration fees may be charged separately from your balance. Two funds quoting the same return can leave you in meaningfully different places once all fees are accounted for. Then there are the things that returns can't show you at all. For example, what insurance is attached to your account and what it's costing you, whether the fund offers guidance, tools and advice or simply sends a statement once a year. Another consideration maybe the level of support available when you need it. When comparing funds, it's worth looking at the full picture, including performance, fees, investment options, retirement support and member benefits. What today’s decisions mean tomorrow To understand how your super stacks up, start here: Find your investment option It's on your annual statement and in your online account. Look at what's in it Your fund publishes the asset allocation (shares, cash etc.) for each investment option. Check the long-term return for that option Focus on five and ten year returns, not just last year and compare them with equivalent options. Understand the total cost Add together administration fees, investment fees and insurance premiums as an annual dollar figure. Comparing super is about working out which option will perform best for you. Before you jump in, it’s worth understanding what's behind the numbers so you can make decisions based on more than a headline return. Knowing where you stand is the first step A super balance tells you where you are today. Understanding how your super is invested, how it compares and whether it's aligned with your goals helps show whether you're heading in the right direction. Source: MLC The information in this article does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Capstone Financial Planning nor their directors, employees or authorised representatives gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document. Principal Wealth Management Pty Ltd trading as BMO Financial Solutions ABN 53 109 336 601 is a Corporate Authorised Representative (CAR 277821) of Capstone Financial Planning Pty Ltd ABN 24 093 733 969 Australian Financial Services Licence (AFSL) No. 223135.

The SMSF landscape is changing

By Jude Schofield • October 7, 2026
More Australians are choosing to take direct control of their retirement savings by establishing a self-managed super fund (SMSF) and according to the SMSF Association, Aussies now see their super as an important part of building and managing their overall wealth.