Australia’s retirement landscape is shifting, and for millions of future retirees, the traditional age of 67 may no longer mark the beginning of life after work. Recent changes to Australia’s Age Pension rules are reshaping how, when, and even if some Australians can retire. These new rules carry serious implications for financial planning, retirement goals, and lifestyle choices.
Let’s break down what’s changing and what it means for your retirement game plan.
Table of Contents
What Are the New Age Pension Rules?
In 2025, the Australian government introduced a set of Age Pension reforms aimed at addressing increasing life expectancy, rising national costs, and the need to support an aging population sustainably. Here are the major updates:
| Key Change | Previous Rule | New Rule (2025 Onward) |
|---|---|---|
| Age Pension eligibility age | 67 | Will increase gradually to 70 by 2035 |
| Income test threshold | $190 per fortnight (single) | Increased to $210 per fortnight |
| Asset test limits | $301,750 (single homeowner) | Increased to $330,000 |
| Work bonus extension | $300 per fortnight | Increased to $600 per fortnight |
These changes are being phased in over time, with the full retirement age rising gradually over the next decade.
What’s Driving the Shift?
Several key factors are behind this policy shift:
- Longer Life Expectancy: Australians are living longer, healthier lives. The government aims to align pension access with longer working years.
- Budget Pressures: The cost of supporting retirees is growing. The Age Pension is the largest single component of government welfare spending.
- Labor Market Needs: Extending working years can help ease skilled labor shortages, particularly as the population ages.
How the New Rules Impact Retirement Planning
For younger Australians, especially those under 50, retiring at 67 may be a thing of the past. Here’s how these changes could affect your strategy:
1. Delayed Access to Government Support
You’ll need to wait longer to receive the Age Pension — potentially up to age 70. This means self-funding retirement for a few extra years, making superannuation contributions and personal savings even more important.
2. More Incentives to Keep Working
With the Work Bonus doubling to $600 per fortnight, older Australians who choose to work part-time can earn more without affecting their pension payments.
3. Better Support for Modest Retirees
The increased income and asset test thresholds may allow more low- to middle-income retirees to qualify for the full or partial pension.
Planning Ahead: What You Should Do Now
If you’re planning for retirement, here are a few practical steps to consider:
- Reassess your retirement age in light of these new changes. Consider how working longer might affect your financial and lifestyle goals.
- Boost your superannuation through voluntary contributions if you’re able to.
- Review your investment strategy to ensure it aligns with a longer retirement horizon.
- Speak to a licensed financial planner for personalized strategies — especially if you’re nearing retirement.
While these reforms are aimed at long-term sustainability, they could drastically alter retirement expectations for many Australians. Flexibility, preparation, and informed planning will be key to navigating this new retirement age reality.
Claim: The Australian government is raising the Age Pension eligibility age from 67 to 70 by 2035.
Fact Check
Status: Partially True / Under Consideration
There is no official law passed (as of June 2025) to raise the Age Pension age to 70. However, the idea has been proposed multiple times in federal discussions, most notably:
- In 2014, then-Treasurer Joe Hockey proposed gradually increasing the pension age to 70 by 2035.
- The proposal was later scrapped in 2018 by Prime Minister Scott Morrison, citing fairness concerns.
- In recent years, think tanks and economic reports (like from the Grattan Institute and Productivity Commission) have renewed calls to revisit the idea due to demographic pressures and budget sustainability.
So while it’s not official policy yet, the push for increasing the retirement age remains active in policy circles and could be reconsidered in future federal budgets.
FAQs:
Will everyone have to retire at 70 now?
No, you can still choose when to retire. However, Age Pension eligibility will rise to 70 by 2035, which means you may need to self-fund for longer if you retire earlier.
What if I can’t work until 70?
Some support programs may be available for those who are unable to work due to health or other valid reasons. Eligibility will be assessed on a case-by-case basis.
Can I still access my super before 70?
Yes. The preservation age for superannuation access remains between 55 and 60 (depending on your birth year), allowing you to tap into your super before receiving the Age Pension.
