Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 453

Age pension is increasing: what you need to know

Australia’s age pension rose in March reflecting rising inflation and the growing cost of living pressures. This represents a pay rise of just over 2% and is the biggest increase in the payment in almost a decade.

Single pensioners will be $20.10 better off per fortnight, and couples up to $30.20 per fortnight (where both members of the couple are eligible).

Indexation also means that some people who were previously ineligible for a pension may become eligible as the cut-off amounts of assets and income are also increased.

But older Australians receiving aged care need to know that an increase in the pension also means an increase in their Basic Daily Fee. This means they’ll only see $4 of the $20 pension increase.

In this article, we’ll walk through the changes step by step and what they mean for you.


The maximum rate of age pension payment for singles increased by $20.10 per fortnight from $967.50 to $987.60. The maximum rate for couples increased by $15.10 each from $729.30 per fortnight for each eligible member to $744.40.

A couple where both members are eligible to receive the maximum payment can receive $1,488.80 per fortnight or $38,708.80 per year combined.

Source: Services Australia

The assets and income level before pensions are disqualified under the means tests have also increased.


For homeowners who are single, the asset test cut-off increased from $593,000 to $599,750. For couples it increased from $891,500 to $901,500.

For couples who are separated by illness, as is the case when one or both move into aged care, the cut-off increased from $1,050,000 to $1,063,500.

*It’s important to remember that the value of your home is not included in these assets.


For singles, the amount of income you can earn before the age pension ceases has increased from $2,115 per fortnight to $2,155.20. For couples, the cut-off has increased from $3,237.20 per fortnight to $3,297.60.

*It’s important to remember that income earned under the work bonus (up to $7,800 per year) is not included. Income from investments is based on deemed income, rather than the actual income earned.

In announcing the changes Minister Anne Ruston said, “This is putting money in the pockets of all Australians who rely on our social security system and, in particular, older Australians.

But older Australians receiving aged care, whether that’s a Home Care Package or residential aged care, need to know that an increase in the pension also means an increase in their Basic Daily Fee.

The Basic Daily Fee you pay towards your cost of aged care is set based on a percentage of the Age Pension. In a Home Care Package, the maximum Basic Daily Fee is set at 17.5% of the basic Age Pension (and applies to people on a Level 4 Package) it was $11.02 per day and has increased to $11.26 per day from 20 March.

In a Home Care Package, the Basic Daily Fee is based on the level of your package:

  • Level 1 was $9.88 per day increasing to $10.08
  • Level 2 was $10.44 per day increasing to $10.66
  • Level 3 was $10.74 per day increasing to $10.97
  • Level 4 was $11.02 per day increasing to $11.26

So, if the fortnightly pension increases by $20.10, up to $3.36 will be needed to meet the increased cost of a home care package.

In residential aged care, the Basic Daily Fee is set at 85% of the basic Age Pension, it was $53.56 per day, increasing to $54.69.

This means that the Basic Daily Fee increase is $15.82 a fortnight, so of the extra $20.10 in Age pension, people living in aged care will only have $4.28 per fortnight to cover increases in their cost of living.

While the Basic Daily Fee does cover some of the cost of living in aged care such as meals, utilities and insurances, many aged care residents need to pay extra or additional service fees to cover alcohol, food, entertainment, and personal services. Personal expenses such as clothing, medications, health care, other insurances, transport, and communication costs remain the responsibility of the resident.

A $4 per fortnight increase in the Age Pension for people living in aged care is definitely a pay cut, not a pay rise.


Rachel Lane is the Principal of Aged Care Gurus where she oversees a national network of adviser dedicated to providing quality advice on retirement living and aged care. She is also the co-author of a number of books with Noel Whittaker including the best-seller 'Aged Care, Who Cares?' and their most recent book 'Downsizing Made Simple'. To find an adviser or buy a book visit



12 tips for ‘aged care season’

Biggest change in the Aged Care Interest Rate since the GFC

Recent age pension changes impact non pensioners too


Most viewed in recent weeks

2024/25 super thresholds – key changes and implications

The ATO has released all the superannuation rates and thresholds that will apply from 1 July 2024. Here's what’s changing and what’s not, and some key considerations and opportunities in the lead up to 30 June and beyond.

The greatest investor you’ve never heard of

Jim Simons has achieved breathtaking returns of 62% p.a. over 33 years, a track record like no other, yet he remains little known to the public. Here’s how he’s done it, and the lessons that can be applied to our own investing.

Five months on from cancer diagnosis

Life has radically shifted with my brain cancer, and I don’t know if it will ever be the same again. After decades of writing and a dozen years with Firstlinks, I still want to contribute, but exactly how and when I do that is unclear.

Is Australia ready for its population growth over the next decade?

Australia will have 3.7 million more people in a decade's time, though the growth won't be evenly distributed. Over 85s will see the fastest growth, while the number of younger people will barely rise. 

Welcome to Firstlinks Edition 552 with weekend update

Being rich is having a high-paying job and accumulating fancy houses and cars, while being wealthy is owning assets that provide passive income, as well as freedom and flexibility. Knowing the difference can reframe your life.

  • 21 March 2024

Why LICs may be close to bottoming

Investor disgust, consolidation, de-listings, price discounts, activist investors entering - it’s what typically happens at business cycle troughs, and it’s happening to LICs now. That may present a potential opportunity.

Latest Updates


20 US stocks to buy and hold forever

Recently, I compiled a list of ASX stocks that you could buy and hold forever. Here’s a follow-up list of US stocks that you could own indefinitely, including well-known names like Microsoft, as well as lesser-known gems.

The public servants demanding $3m super tax exemption

The $3 million super tax will capture retired, and soon to retire, public servants and politicians who are members of defined benefit superannuation schemes. Lobbying efforts for exemptions to the tax are intensifying.


Baby Boomer housing needs

Baby boomers will account for a third of population growth between 2024 and 2029, making this generation the biggest age-related growth sector over this period. They will shape the housing market with their unique preferences.

SMSF strategies

Meg on SMSFs: When the first member of a couple dies

The surviving spouse has a lot to think about when a member of an SMSF dies. While it pays to understand the options quickly, often they’re best served by moving a little more slowly before making final decisions.


Small caps are compelling but not for the reasons you might think...

Your author prematurely advocated investing in small caps almost 12 months ago. Since then, the investment landscape has changed, and there are even more reasons to believe small caps are likely to outperform going forward.


The mixed fortunes of tax reform in Australia, part 2

Since Federation, reforms to our tax system have proven difficult. Yet they're too important to leave in the too-hard basket, and here's a look at the key ingredients that make a tax reform exercise work, or not.

Investment strategies

8 ways that AI will impact how we invest

AI is affecting ever expanding fields of human activity, and the way we invest is no exception. Here's how investors, advisors and investment managers can better prepare to manage the opportunities and risks that come with AI.



© 2024 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.