Transition to Retirement and the Age Pension: Why a TTR Pension Hits Both Tests
A transition-to-retirement (TTR) pension is a superannuation income stream you can start once you reach preservation age (60) while you're still working — well before you turn 67. The confusion around "TTR and the Age Pension" comes from a clash of two timelines: almost nobody on a TTR is old enough to claim the Age Pension, and by the time you are Age Pension age, your super should already have flipped to a full retirement-phase pension. The point most people miss: once you hit Age Pension age, Centrelink stops caring whether your pension is labelled "TTR" — it deems the balance behind it under the income test and counts it under the assets test, no special concession.
What a TTR pension actually is — and why you're usually under Age Pension age
A TTR pension (the ATO calls it a transition to retirement income stream, or TRIS) lets you draw a regular income from your super while you're still working, once you've reached your preservation age. For everyone born after 30 June 1964 — which is everyone reaching preservation age now — that age is 60. (ATO: Transition to retirement income streams)
Because you haven't permanently retired, a TTR is a non-commutable income stream — you can't pull it out as a lump sum — and it runs to tight rules:
- Minimum drawdown: 4% of the account balance each financial year (the standard under-65 minimum).
- Maximum drawdown: 10% of the account balance each financial year, while it stays in the pre-retirement ("non-retirement phase") state.
- Still in accumulation-style tax: earnings inside a TTR are taxed at up to 15% (unlike a full retirement-phase pension, where earnings are tax-free).
So the typical TTR holder is 60 to 66 — drawing a bit of super to top up part-time wages or to salary-sacrifice harder. The Age Pension age is 67. (Services Australia: Who can get Age Pension) That gap — sometimes seven years wide — is exactly why "Can I get the Age Pension on a TTR?" is almost always the wrong question. The right question is: what happens to my TTR balance the day I do hit 67?
A TTR doesn't get you to the Age Pension early — it's just a way to access super at 60. The Age Pension still starts at 67 regardless. And by 67, your TTR should already have automatically become a full retirement-phase pension (this happens at 65 at the latest), so "still on a TTR at 67" is itself a red flag worth fixing.
"Both tests": how the Age Pension assesses a super pension
Once you reach Age Pension age, your super — whether it's still labelled TTR or a full account-based pension — is assessed under the Age Pension's two means tests. Centrelink applies whichever produces the lower pension. The fact that you've worded it as a "pension" buys you no exemption.
1. The income test (via deeming)
Centrelink does not count the actual income you draw from a super pension once you're of Age Pension age. Instead it deems the account balance — it pretends the balance earns a set rate, no matter what it really earns. As of 20 March 2026 the Age Pension deeming rates are: (Services Australia: Deeming)
| Deeming setting (from 20 Mar 2026) | Single | Couple (combined, ≥1 on pension) |
|---|---|---|
| Lower rate — 1.25% applies up to… | $64,200 | $106,200 |
| Upper rate — 3.25% applies above… | $64,200 | $106,200 |
The deemed income from all your financial assets (super pensions, bank accounts, shares, managed funds) is added together. Then the income test runs:
- Income free area: $218/fortnight (single) or $380/fortnight (couple combined). (Services Australia: Income test)
- Taper: your pension drops by 50 cents for every $1 of assessable income above the free area.
2. The assets test
The super pension's full account balance is also a countable asset. Under the assets test your pension reduces by $3 per fortnight for every $1,000 of assets above your threshold. For homeowners the lower thresholds are $321,500 (single) and $481,500 (couple). (Services Australia: Assets test)
Centrelink calculates your entitlement under both tests and pays the lower result. For most people with a meaningful super balance, the assets test is the binding one.
Meet Geoff, 67, single, homeowner — and still technically "on a TTR." Geoff turned 67 in May 2026 and is applying for the Age Pension for the first time. He works two days a week ($600/fortnight gross) and never converted the TTR pension he started at 62. His TTR account balance is $310,000. He also has $40,000 in a savings account. He owns his home.
Step 1 — Financial assets to be deemed. $310,000 (super pension) + $40,000 (savings) = $350,000.
Step 2 — Deem the income (single rates, 20 Mar 2026).
- First $64,200 × 1.25% = $802.50/yr
- Remaining $285,800 × 3.25% = $9,288.50/yr
- Total deemed income = $10,091/yr ≈ $388.12/fortnight
Step 3 — Add the assessable employment income. Geoff earns $600/fortnight from work. The Work Bonus disregards the first $300/fortnight of employment income, so only $300 of his wage counts. Note: the Work Bonus does nothing for the deemed super income — it applies to work income only.
- Assessable employment income = $600 − $300 (Work Bonus) = $300/fortnight
- Total assessable income = $388.12 (deemed) + $300 (wages) = $688.12/fortnight
Step 4 — Run the income test. Income above the $218 free area = $688.12 − $218 = $470.12. Reduction at 50c/$1 = $235.06/fortnight. So the income test would pay $1,200.90 (max single rate) − $235.06 = $965.84/fortnight.
Step 5 — Run the assets test. Countable assets = $350,000 (financial) + Geoff's car and contents, say $15,000 = $365,000. Above the $321,500 single-homeowner threshold by $43,500. Reduction = ($43,500 ÷ $1,000) × $3 = $130.50/fortnight. So the assets test would pay $1,200.90 − $130.50 = $1,070.40/fortnight.
Step 6 — Centrelink pays the LOWER of the two. $965.84 (income test) is lower than $1,070.40 (assets test), so Geoff receives a part Age Pension of about $965.84/fortnight. His income from work is the deciding factor — and notice the deemed super income was assessed in full, with no help from the Work Bonus.
Figures are 20 Mar 2026 rates; max single rate $1,200.90/fortnight including the Pension Supplement. Whether Geoff's TTR is "TTR" or a full pension makes zero difference to this maths — the balance is deemed either way.
Why the TTR label stops mattering at Age Pension age
Here's the subtlety that catches people. There is no "TTR exemption" in the Centrelink means tests. Both a TTR pension and a full account-based pension are account-based income streams, and since 1 January 2015 account-based pensions held by people of Age Pension age are assessed by deeming the account balance — not by counting the actual drawdown. So a TTR and a full pension with the same balance produce identical Centrelink outcomes.
What does change at 67, dramatically, is the tax and access side — and that's why staying on a TTR past the point you needed it is pure downside.
| Feature | TTR pension (pre-retirement) | Full account-based pension (retirement phase) |
|---|---|---|
| Fund earnings tax | Up to 15% | Tax-free (in retirement phase) |
| Max drawdown | Capped at 10%/yr | No maximum — draw what you like |
| Lump-sum access | No (non-commutable) | Yes |
| Centrelink income-test treatment at 67 | Deemed on balance | Deemed on balance |
| Counts as an asset at 67 | Yes — full balance | Yes — full balance |
The Centrelink rows are identical. The first three rows are not — and they all favour the full pension. That's the whole reason a TTR is meant to be a stepping stone, not a destination.
When to convert your TTR to a full account-based pension
A TTR automatically moves into retirement phase when you meet a "condition of release with a nil cashing restriction." In plain terms, that happens at the earliest of:
- Turning 65 — automatic, no need to retire. Your fund flips the TTR to retirement phase, earnings become tax-free and the 10% cap falls away. (ATO: Transition to retirement)
- Permanently retiring after preservation age (e.g. ceasing employment with no intention to work 10+ hours/week again), or
- Ceasing an employment arrangement on or after age 60.
The practical answer: you should not still be on a "TTR" at 67. If your super provider didn't automatically convert it at 65 (or you've changed funds and it didn't carry over correctly), check with your fund now — you may be paying up to 15% earnings tax you no longer need to pay, and you've lost the ability to take lump sums. None of this changes your Age Pension, but it changes how much of your own money you keep.
Before you lodge an Age Pension claim, ring your super fund and ask one question: "Is my pension in retirement phase, or is it still a transition-to-retirement income stream?" If it's still TTR, ask them to convert it. The Centrelink number won't budge — but your fund earnings go from taxed to tax-free, and you regain lump-sum flexibility.
The Work Bonus: only for wages, never for your TTR or deemed income
The Work Bonus is the single biggest source of confusion when people are still working part-time on a TTR. It is a genuine concession — but it only ever touches employment income. (Services Australia: Work Bonus)
- What it does: the first $300/fortnight of employment income is disregarded under the income test — on top of the $218 income free area.
- The income bank: any unused Work Bonus accrues into an income bank, up to a maximum of $11,800, which you can draw on later (handy for lumpy or seasonal work).
- What it does NOT cover: the deemed income from your TTR/super pension, bank interest, dividends, rent, or super drawdowns. Those are investment / deemed income — the Work Bonus can't shelter a cent of them.
In Geoff's example above, that's why the Work Bonus knocked $300 off his $600 wage but did nothing to his $388/fortnight of deemed super income. People often assume the Work Bonus will protect the money coming out of their TTR — it won't, because that money is treated as a return on a financial asset, not as wages.
- A TTR pension lets you draw super from preservation age (60) while still working — almost always before Age Pension age, which is 67.
- At Age Pension age, a TTR is treated exactly like a full account-based pension: the balance is deemed under the income test (1.25% / 3.25% from 20 Mar 2026) and counted under the assets test. No TTR exemption exists.
- Centrelink pays the lower of the income-test and assets-test results.
- You generally should not still be on a TTR at 67 — it auto-converts to retirement phase at 65, making fund earnings tax-free and lifting the 10% cap. If yours didn't convert, fix it.
- The Work Bonus ($300/fortnight, income bank to $11,800) shelters employment income only — never your deemed TTR/super income.
Frequently asked questions
Can a TTR pension get me the Age Pension earlier than 67?
No. A TTR pension only lets you access your super from preservation age (60); it has no effect on when the Age Pension starts. The Age Pension qualifying age is 67 regardless of whether you've started a TTR.
If I'm 67 and on a TTR, does Centrelink count what I draw out, or the balance?
It deems the account balance, not your actual drawdown. As of 20 March 2026, the first $64,200 (single) is deemed at 1.25% and the rest at 3.25%. The full balance is also a countable asset under the assets test.
Does the Work Bonus reduce the income counted from my TTR pension?
No. The Work Bonus only applies to employment income (wages from work you perform). Your TTR drawdown is treated as deemed investment income, so the Work Bonus gives it no relief. It disregards the first $300/fortnight of wages only.
Why should I convert my TTR to a full pension once I retire or turn 65?
It changes nothing for Centrelink, but it makes your fund earnings tax-free (instead of taxed up to 15%), removes the 10% maximum drawdown cap, and lets you take lump sums. A TTR auto-converts at 65; if it didn't, ask your fund to fix it.
I'm working two days a week at 67 — will my wages cut my pension?
Possibly, but the Work Bonus softens it. The first $300/fortnight of employment income is ignored, and you also get the $218/fortnight income free area before the 50c-in-the-dollar taper begins. Many part-time workers keep a substantial part pension.
Is the TTR balance assessed differently from my regular bank savings?
No — both are financial assets subject to the same deeming rates and both count under the assets test. The deemed income from all your financial assets is pooled together before the income test is applied.
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