Part Age Pension: Exactly How $1 of Extra Income Cuts Your Payment by 50c
A "part Age Pension" simply means you get some pension, but not the maximum, because either the income test or the assets test has reduced it. Under the income test, every dollar a single person earns above the $218-per-fortnight free area cuts their pension by exactly 50 cents — so $500 a fortnight of income costs you about $141 in pension. This guide shows the maths, step by step, with real numbers.
What "part pension" actually means
There is no separate "part pension" payment. The Age Pension has one maximum rate, and Services Australia applies two tests to it: an income test and an assets test. Both tests are calculated, and whichever produces the lower payment is the one that applies. If either test trims your payment below the maximum, you are on a part pension.
So the definition is straightforward: a part Age Pension is any payment below the maximum rate because a test reduced it. You could be on a part pension because you have too much income, too many assets, or both — but only the harsher of the two tests sets your final number.
From 20 March 2026, the maximum Age Pension (base rate + Pension Supplement + Energy Supplement) is $1,200.90 a fortnight for a single person and $1,810.40 a fortnight for a couple combined ($905.20 each). Any payment below these figures, caused by a test, is a part pension. Source: Services Australia — How much Age Pension you can get.
The income test: 50 cents in the dollar
The income test is the one most people meet first, because part-time work, a small allocated-pension drawdown, or investment income can all push you over the free area. Here is how it works for a single person (from 20 March 2026):
- You can earn up to $218 a fortnight (the "income free area") with no reduction.
- For every $1 above $218, your pension is reduced by 50 cents.
- The pension reaches $0 once your fortnightly income hits roughly $2,619.80 (single).
For a couple, the combined free area is $380 a fortnight, and the taper is 25 cents in the dollar each (50 cents combined). The couple combined cut-off is about $4,000.80 a fortnight. Source: Services Australia — Income test for Age Pension.
Dorothy, 71, single, renting, earns $500 a fortnight from a casual bookkeeping job.
Step 1 — Find the income above the free area:
$500 − $218 = $282 over the free area.
Step 2 — Apply the 50c taper:
$282 × 0.50 = $141.00 reduction per fortnight.
Step 3 — Subtract from the maximum single rate:
$1,200.90 − $141.00 = $1,059.90 a fortnight.
Dorothy is on a part pension of $1,059.90 a fortnight. She kept $359 of her $500 wage ($141 less pension, but $500 more wage), so working still leaves her clearly ahead. (Note: the Work Bonus can shield up to $300/ft of employment income before it even counts — which would reduce the assessed amount and lift her payment further. We've ignored it here to show the raw taper; see the FAQ.)
The assets test: $3 per $1,000, per fortnight
The assets test works on a different lever. Your assessable assets (everything except the family home, broadly) are measured against a free area. Above that, your pension drops by $3 a fortnight for every $1,000 of assets over the threshold.
| Situation (from 20 Mar 2026) | Full-pension free area | Part-pension cut-off |
|---|---|---|
| Single, homeowner | $321,500 | $722,000 |
| Single, non-homeowner | $579,500 | $980,000 |
| Couple, homeowner (combined) | $481,500 | $1,085,000 |
| Couple, non-homeowner (combined) | $739,500 | $1,343,000 |
Source: Services Australia — Assets test for Age Pension. The family home is exempt. Thresholds are reviewed in March, July and September.
Frank and Helen, both 68, a homeowner couple, with $531,500 in assessable assets (super, a car and savings — their home is exempt).
Step 1 — Find assets above the couple homeowner free area:
$531,500 − $481,500 = $50,000 over.
Step 2 — Convert to $1,000 units:
$50,000 ÷ $1,000 = 50 units.
Step 3 — Apply the $3 taper (combined):
50 × $3 = $150.00 reduction per fortnight (combined).
Step 4 — Subtract from the maximum couple rate:
$1,810.40 − $150.00 = $1,660.40 a fortnight combined ($830.20 each).
Frank and Helen are on a part pension under the assets test. Services Australia would also run the income test on their super and savings; they'd be paid under whichever test gives the lower figure.
The cut-off points: where the part pension hits $0
A part pension shrinks to nil at the "cut-off" (or disqualifying) limit. Pass that line and you get no pension at all — under that particular test.
| Test | Single cut-off | Couple cut-off (combined) |
|---|---|---|
| Income (per fortnight) | $2,619.80 | $4,000.80 |
| Assets — homeowner | $722,000 | $1,085,000 |
| Assets — non-homeowner | $980,000 | $1,343,000 |
Cut-offs can sit slightly higher if you receive Rent Assistance or have employment income protected by the Work Bonus. Figures effective 20 March 2026. Sources: income test and assets test, Services Australia.
Why a part pensioner keeps the Pensioner Concession Card
This is the part people most often miss. Any rate of Age Pension above $0 — including a tiny part pension — entitles you to the Pensioner Concession Card (PCC). The card is not means-tested separately on top of the pension; it comes automatically with payment.
That matters because the PCC can be worth thousands a year: cheaper PBS prescriptions, bulk-billing incentives, discounted utilities and rates, vehicle registration concessions (state-dependent) and public-transport discounts. So a retiree receiving even $40 a fortnight of part pension may be getting far more value from the card than the cash payment itself. Source: Services Australia — Pensioner Concession Card.
The danger zone is the cut-off line. Tipping $1 over the assets or income cut-off doesn't just lose your last few dollars of pension — it can lose the whole PCC. (People who lose the pension purely because of the assets test may instead qualify for a Commonwealth Seniors Health Card, which restores some — not all — concessions.) Plan around the cliff, not the cents.
- A part pension is any Age Pension below the maximum because a test reduced it — there's no separate payment type.
- Income test (single): $218/ft free, then 50c lost per $1. $500/ft income → about $141 less pension.
- Assets test: $3/ft per $1,000 over the free area. A couple $50,000 over loses $150/ft.
- You're paid under whichever test gives the lower figure — never both stacked.
- Even $1 of part pension keeps the Pensioner Concession Card; crossing the cut-off can cost the card entirely.
- 2026 cut-offs: single income $2,619.80/ft; couple income $4,000.80/ft; couple homeowner assets $1,085,000.
Frequently asked questions
What is a part Age Pension?
It's an Age Pension paid at less than the maximum rate because the income test or the assets test reduced it. There's only one pension with one maximum; "part pension" just describes that a test has cut your payment below that maximum.
How much does $1 of extra income reduce a single person's pension?
By 50 cents, once you're over the $218-per-fortnight income free area. So $500/ft of income is $282 over the free area, reduced by 50c each = $141 less pension a fortnight. For couples the rate is 25c each (50c combined) above the $380/ft combined free area.
Does both tests reducing my pension mean I'm hit twice?
No. Services Australia calculates your payment under each test separately and pays you under whichever gives the lower result. The reductions are not added together — only the harsher test applies.
Do I keep the Pensioner Concession Card on a part pension?
Yes. Any rate of Age Pension above $0 — even a few dollars a fortnight — entitles you to the Pensioner Concession Card automatically. The card's value (cheaper medicines, utility and rates concessions, transport discounts) often exceeds a small cash payment, so it's worth keeping a sliver of pension where you can.
How does the Work Bonus change the income example?
The Work Bonus shields up to $300/ft of employment income before it's counted in the income test. In Dorothy's example, $300 of her $500 wage could be set aside, leaving only $200 assessed. As $200 is under the $218 free area, her pension would not be reduced at all. We left it out of the worked example to show the raw 50c taper clearly.
What are the 2026 cut-off points where the part pension reaches $0?
From 20 March 2026: income test cut-off is $2,619.80/ft (single) and $4,000.80/ft (couple combined); assets test cut-off is $722,000 (single homeowner), $980,000 (single non-homeowner), $1,085,000 (couple homeowner combined) and $1,343,000 (couple non-homeowner combined). These rise slightly with Rent Assistance.
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