The Fine Print Australia · PUBLISHED 24 JUN 2026 · VERIFIED 24 JUN 2026 · AU EDITION

$3 Lost Per Fortnight: How Super Hits the Age Pension Assets Test

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A retired Australian couple who own their home lose $3 of Age Pension every fortnight for every $1,000 their combined super and other assets sit above $481,500, which can quietly strip more than $78,000 from their lifetime pension if they keep just $150,000 “too much” in assessable assets.

The number that matters

$3 per $1,000 per fortnight — under the Age Pension assets test taper rate, your fortnightly pension reduces by $3 for every $1,000 of assets above the lower threshold, meaning an extra $100,000 in assessable super/other assets cuts your Age Pension by about $7,800 per year.

• Services Australia confirms that Age Pension “may reduce when your assets are more than the limit for your situation” and industry summaries state “your Age Pension amount starts reducing by $3.00 for every $1,000 your assets exceed the lower limit.”
• For a homeowner couple, the full-pension lower asset limit is $481,500 (combined) and the part-pension cut‑off is $1,085,000 (combined) from 20 March 2026.

How it quietly costs you

Mechanism: Once you hit Age Pension age, your super suddenly becomes a counted asset and starts cutting your pension $3 per $1,000 over the threshold.

• Super in accumulation phase is ignored for the assets and income tests while you are under Age Pension age.
• Once you reach Age Pension age, the full balance of your super (and your partner’s once they’re Age Pension age) in accumulation or account‑based pensions is included in the assets test at its full value.

The key thresholds (from 20 March 2026)

According to Services Australia and industry summaries of the current rules:

Full Age Pension asset limits (maximum assets before any reduction):

Part Age Pension cut‑off points (assets where payment stops):

These figures are used by Services Australia in 2026 and are indexed periodically.

How the taper rate bites

• The Age Pension assets test reduces your fortnightly pension by $3 for every $1,000 of assets above your lower limit.
• For a homeowner couple, the lower limit is $481,500 (combined).

Example: couple with “too much” super

• Homeowner couple, both at Age Pension age.
• Combined assessable assets (including super) = $631,500 — i.e. $150,000 above the full‑pension limit of $481,500.
• Excess above threshold = $150,000.
• Pension reduction = $150,000 ÷ $1,000 × $3 = $450 per fortnight.
• Annual reduction ≈ $450 × 26 = $11,700 per year (rounded).

If they live 15 years on the Age Pension, the assets test alone would cost them roughly:

• $11,700 × 15 ≈ $175,500 in lost Age Pension over retirement (ignoring indexation).

Old vs better (asset level)

• Old / naive approach: Keep as much as possible in assessable super and investments, ending up with, say, $800,000 in combined assessable assets as a homeowner couple. That is $318,500 above the lower limit, cutting pension by roughly $955.50 per fortnight (318.5 × $3), or about $24,843 per year.
• Better‑planned approach: Carefully structure retirement so assessable assets are closer to $481,500–$550,000, still providing a decent buffer but significantly reducing the assets‑test hit — potentially recovering tens of thousands of dollars in lifetime pension.

Regulator/source: Services Australia (assets test) and fund summaries derived from Services Australia rules.

The second, compounding trap

Mechanism: Under Age Pension age, your super is sheltered from the test — but many people shift super into assessable retirement products too early or in the wrong form, bringing it into the assets test sooner and in full.

• While you’re under Age Pension age, your super in accumulation phase is not counted in the assets or income tests.
• Once you (or your partner) reach Age Pension age, your super is counted at full value as a financial asset in both the assets test and the deeming‑based income test.
• Account‑based pensions, transition‑to‑retirement pensions and lump sums are all assessable once you are of Age Pension age.

Cost of inaction: moving too much super into assessable form

Many people convert their super to an account‑based pension or keep large balances in accumulation past Age Pension age without considering assets‑test impacts.

Using the same homeowner couple:

• At Age Pension age, they convert their entire $800,000 super to an account‑based pension.
• Their other assessable assets (cash, shares, cars, contents) add up to $50,000, so total assessable assets = $850,000.
• The full‑pension limit is $481,500; excess = $368,500.
• Pension reduction = 368.5 × $3 ≈ $1,105.50 per fortnight or ≈ $28,743 per year.

If instead they had:

• Only $600,000 in assessable super on the day they qualify and
• Delayed or restructured the remaining $200,000 (e.g. spent on non‑assessable home improvements or staged withdrawals before qualifying,

then:

• Assessable assets = $600,000 + $50,000 = $650,000.
• Excess over $481,500 = $168,500.
• Pension reduction = 168.5 × $3 ≈ $505.50 per fortnight ≈ $13,143 per year.

Difference caused by timing/structure: about $15,600 less Age Pension per year by moving the extra $200,000 into assessable form at the wrong time.

Long‑run impact

Assuming 15 years on the Age Pension:

• Extra lost pension due to this second‑layer timing/structure problem:
• $15,600 × 15 ≈ $234,000 in today’s dollars (ignoring indexation and tax for simplicity).

Regulator/source: Services Australia (treatment of super and thresholds) and educational material from super funds.

What this looks like in practice

Persona:

• Name: Bruce
• Age: 66
• Job: Maintenance supervisor, planning to retire at 67
• Income (final working year): $90,000 before tax (employed, PAYG)
• Super balance: $780,000 in accumulation, industry fund
• Other assets: $40,000 in savings, $20,000 car, $20,000 household contents → $80,000 assessable non‑home assets
• Home: Owns his home outright, not counted as an asset in the test
• Years to retirement: 1 year until Age Pension age
• Account type: Industry super accumulation, planning an account‑based pension

Bruce expects “the Age Pension will just top up whatever my super doesn’t cover.” He discovers the asset test and how his super balance interacts with it.

Discovery 1 — The threshold “cliff” he didn’t know about

Bruce learns that as a single homeowner, the full Age Pension asset limit is $321,500, and his pension stops entirely if his assessable assets exceed $722,000.

• His projected assets at 67:
• Super (if all converted to an account‑based pension): $780,000
• Other assessable assets: $80,000
• Total = $860,000
• This is $138,000 above the $722,000 cut‑off for any Age Pension, so he would receive no Age Pension at all at 67 under current rules.

Comparison: Bruce thought he would get “at least a part pension”, but under the asset test he’s completely excluded until he has spent down or restructured at least $138,000 of assets.

Discovery 2 — How much each extra $100,000 of super costs him

Bruce discovers the $3 per $1,000 per fortnight taper rate.

Suppose he could legally and sensibly reduce assessable assets from $860,000 to $750,000 before he applies (e.g. by bringing forward necessary home repairs or medical expenses).

• New excess above $722,000 cut‑off = $28,000.
• Instead of getting zero, he may qualify for a small part pension, and as he spends down further to sit closer to the full‑pension lower limit of $321,500, each $100,000 of extra assessable assets above that reduces his pension by about $7,800 per year ($100,000 ÷ 1,000 × $3 × 26).

Comparison: Bruce had always assumed “more super is always better”; he now understands that once he’s over the thresholds, each extra $100,000 of assessable assets can cost him $7,800 a year of Age Pension.

Discovery 3 — His partner’s age can delay when her super starts hurting them

Suppose Bruce has a partner, Lisa, aged 61, with $200,000 in super in accumulation.

• While Lisa is under Age Pension age, her super is not counted in the assets or income tests.
• Only Bruce’s super and their other joint assets are counted when he first applies.

If Bruce has $600,000 and Lisa has $200,000 at his Age Pension age:

• Assessable super when Bruce applies = $600,000 (Lisa’s $200,000 is ignored until she reaches Age Pension age).
• Other joint assets = $80,000.
• Combined assessable assets at Bruce’s claim = $680,000.
• As a homeowner couple, full‑pension limit is $481,500 and cut‑off is $1,085,000.
• Excess above lower limit = $198,500, giving a reduction of ≈ $595.50 per fortnight (198.5 × $3) or ≈ $15,483 per year.

If Lisa’s super had also been assessable from day one (e.g. if she was also at Age Pension age), combined super would be $800,000, total assets $880,000, and:

• Excess above lower limit = $398,500.
• Reduction ≈ $1,195.50 per fortnight or ≈ $31,083 per year — about $15,600 more pension lost each year just because her super is now also counted.

Comparison: Bruce and Lisa discover that the younger partner’s super is a temporary shelter until that partner reaches Age Pension age, which can materially improve their Age Pension for several years.

The full cost of doing nothing

For Bruce (single, homeowner, retiring at 67 with $780,000 super and $80,000 other assets = $860,000):

• Problem 1 impact: Being above the $722,000 cut‑off means he receives no Age Pension at all until he has spent down at least $138,000 of assets.
• If he had been able to retire with assessable assets around the full‑pension threshold of $321,500, he could have qualified for the full Age Pension from day one.

Using indicative modelling:

• Assume full single Age Pension (incl. supplements) is around $29,000 per year in today’s dollars (based on recent published rates; exact figure varies over time and is indexed by Services Australia).
• If Bruce misses out on any Age Pension for his first 5 years of retirement due to high assets, that is roughly:
• 5 × $29,000 ≈ $145,000 of forgone Age Pension in those early years.
• Once his assets fall back toward the thresholds, the $3 per $1,000 taper rate means that even if he qualifies later, he is likely to lose thousands of dollars per year in part‑pension reductions unless he has actively planned his asset levels.

Combining threshold exclusion (Problem 1) with earlier‑than‑necessary inclusion of super in the asset test (Problem 2), a person like Bruce can easily forgo $200,000–$300,000 of potential Age Pension over a 20‑year retirement, assuming:

• 5–7 years of no Age Pension due to assets above the cut‑off; and
• 10–15 years of reduced part pension due to sitting well above the full‑pension threshold, at a reduction of $7,800–$15,000+ per year from the taper rate.

These are indicative, conservative estimates for illustration based on current thresholds and taper rules, not personal advice.

What to do about it

Each move is designed for Australians and can be done in under 30 minutes using official/government or regulator‑aligned tools.

Move 1 — Check your current Age Pension asset position

1. Action: Calculate where you sit against the Age Pension assets test limits.
2. Tool/portal:

• Services Australia – “Assets test for Age Pension” page and related calculators.

3. Steps:
4. List all assets that count for the test: super (for anyone at Age Pension age), bank accounts, investments, cars, contents, and other property (excluding your principal home).
5. Add up their market values to get your total assessable assets for you or you and your partner.
6. Compare this total with the current Services Australia tables for full pension limits and cut‑off points for your situation (single/couple, homeowner/non‑homeowner).
7. What “good” looks like:

• If you want to maximise Age Pension, being near or below the full‑pension lower limit (e.g. $321,500 for single homeowners or $481,500 for homeowner couples) will generally give the maximum rate subject to the income test.
• Sitting just above those limits is still fine but expect roughly $7,800 less Age Pension per year per extra $100,000 of assets.

Move 2 — Map when each partner’s super will start counting

1. Action: Identify the year when each partner’s super becomes assessable and estimate the impact.
2. Tool/portal:

• Services Australia Age Pension age tool and assets test information, combined with your super fund’s online balance.

3. Steps:
4. Check your Age Pension age (and your partner’s) on the Services Australia website.
5. Log in to your super fund portal(s) and note each person’s super balance and whether it is in accumulation or pension phase.
6. For each partner, mark the year their super becomes assessable, then re‑run your asset total with and without that partner’s super to see how your Age Pension could change when they reach Age Pension age.
7. What “good” looks like:

• A clear plan where you understand that the younger partner’s super is ignored until they reach Age Pension age, and you have aligned big financial decisions (e.g. renovations, car upgrades, medical spend) with that window.

Move 3 — Optimise what counts as an asset versus what doesn’t

1. Action: Review whether some planned spending could be shifted into non‑assessable or less‑assessable areas before you claim.
2. Tool/portal:

• Services Australia “Assets test” guidance plus your super fund’s retirement calculator or projection tools.

3. Steps:
4. Use the assets test pages to confirm what does not count as an

Sources

• https://www.servicesaustralia.gov.au/assets-test-for-age-pension?context=22526

Researched 2026-06-24.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.