How overseas income and assets count in the Age Pension means tests

Foreign pensions count as income in the Age Pension income test at their gross current rate, before deductions for foreign tax, bank charges or other amounts taken from the payment⁶. This also applies to overseas war pensions, public service pensions, private annuities and other private overseas income streams.

Australia's social security agreements with other countries can change how a foreign pension is assessed⁶. Under an agreement, a payment can instead be deducted directly from the Australian pension, be exempt from the income test, or be only partly assessed.

For a person in Australia, New Zealand superannuation is always deducted directly from the Australian payment under the New Zealand agreement⁶.

Some overseas payments are exempt from the income test, and others are not assessed for a set period. Certain restitution payments, including some compensation for victims of National Socialist persecution, are exempt from the income test⁶. A survivor's or widow's pension, or an increase in a pensioner's own foreign payment after a partner's death, is not assessed for 14 weeks³.

Arrears of a foreign social security pension paid as a lump sum are assessed over the period the payment relates to rather than only when it is received⁶. Any Age Pension paid above the reassessed rate for that period can be a recoverable debt. Other overseas lump sums, such as a refund of contributions, count as income for 12 months from the date received.

Once converted to Australian dollars, foreign pension income is added to the pensioner's other assessable income.

Under the standard income test rules from 1 July 2026, the income free area for a single pensioner is $226 a fortnight, and each dollar of assessable income above it reduces the pension by 50 cents⁴. A couple can have combined income of up to $396 a fortnight, with each partner's pension reducing by 25 cents for each dollar above it.

Real estate outside Australia counts in the Age Pension assets test at its current market value, unless it is the pensioner's principal home⁷. This includes property that is rented out, left vacant, occupied by someone else for free or used as another home.

The principal home is the home where the pensioner, or the couple, lives for most of the year¹². A pensioner who owns more than one home can have only one principal home for the assets test. Any other property is assessed as an asset, even while the pensioner is living in it.

Only the pensioner's share of a property counts, less the amount owed on a loan for the property⁷.

Rent from a property outside Australia counts in the income test as the gross rent minus allowable costs associated with earning that rent³.

From 1 July 2026, a single homeowner can have assets of up to $333,000 and receive the full pension, compared with $600,000 for a single non-homeowner¹¹. For a couple, the full-pension limits are $499,000 for homeowners and $766,000 for non-homeowners, combined. Under the standard rules, each $1,000 of assets above the limit reduces a single pension, or a couple's combined pension, by $3 a fortnight¹³.

From 20 September 2026, a part pension stops when a single homeowner's assets are more than $745,750. For a single non-homeowner, the cut-off is $1,012,750¹¹. For singles and couples, the non-homeowner full-pension limit and part-pension cut-off point are each $267,000 higher than the homeowner amounts.

The full-pension assets limit for a single homeowner increased from $125,750 on 1 July 1997 to $333,000 on 1 July 2026. This included a one-off increase from $209,000 to $250,000 on 1 January 2017¹⁴.

An Age Pension recipient who does not report a change in overseas income or assets within 14 days may be paid too much and may have to repay the overpayment¹. Deliberately not reporting a change can lead to a fraud charge.

When a debt is raised, Services Australia sends a letter showing the amount overpaid, why it is owed and a due date, which is usually 28 days after the letter²⁰. For a person still getting a Centrelink payment, repayments are generally deducted from that payment.

A former recipient who has not repaid the debt or set up a repayment arrangement by the due date can be charged interest from the 29th day after the date of the debt notice²¹. The interest charge is the 90-day Bank Accepted Bill rate plus 7%, compounded daily. People who are still receiving a social security payment are exempt from this interest charge.

The 10% recovery fee on debts from undeclared income from personal exertion does not apply to the Age Pension. The fee applies to working-age benefits, the Disability Support Pension, Parenting Payment and some closed payments²².

Services Australia checks land title records against the real estate reported by pensioners and adjusts the value of assessable residential real estate each year⁷. If those checks show property is worth more than reported, payments can reduce or stop and money may have to be repaid.

A debt can be waived in part or in full under the special circumstances waiver, including in some cases of hardship²⁰.