From 2025, changes to Australia’s Age Pension rules are drawing attention to what many call a “hidden trap” for couples. The situation arises when one partner reaches the qualifying age and the other does not. While it may seem straightforward that the eligible partner can claim their pension, the couple’s combined income and assets are still assessed together. This creates unexpected financial pressure for households where only one partner qualifies.
How the Pension Test Works for Couples
Centrelink applies both the income test and the assets test to determine eligibility for the Age Pension. For couples, these tests are calculated on the combined household finances, not just the eligible partner’s share. This means that even if one partner has reached pension age, their entitlement can be reduced or delayed because the younger partner’s earnings or assets are included in the assessment.
The Hidden Trap Explained
The issue becomes particularly tough for couples where the younger partner is still working. Their income may push the couple over the threshold, reducing or even eliminating the pension payment for the older partner. In effect, the eligible partner cannot access the full pension benefits they expected, leaving the couple caught in a financial gap until both qualify.
Real Impact on Retiring Australians
For many couples, this trap creates years of uncertainty. Retirees often plan their budgets around expected pension income, only to find that their entitlement is much lower because of the combined assessment.
Some are forced to draw down on savings earlier than planned, while others delay retirement altogether. Advocacy groups argue that the rules fail to reflect modern households, where age differences between partners are increasingly common.
What Couples Can Do
Experts advise couples approaching retirement to carefully plan ahead. Superannuation withdrawals, investments, and timing of retirement can all affect Centrelink assessments. Seeking professional financial advice may help couples manage their assets in a way that minimises the impact of the trap. Staying updated with Centrelink’s latest thresholds and rules is also essential to avoid surprises.
Looking Ahead
The 2025 changes highlight ongoing debate about whether the Age Pension system treats couples fairly. While the government stresses that the combined approach ensures equity, critics argue it penalises households where only one partner qualifies. Whether reforms will be considered in the future remains uncertain, but for now, couples are urged to prepare carefully to avoid falling into this pension trap.