Yes if your partner works, their income will count toward your combined income for the Age Pension income test, which can reduce your pension payment. As of March 2026, couples can earn up to $360 per fortnight combined before their pension reduces, with the pension decreasing by 50 cents for every dollar above that threshold. However, the Work Bonus exempts the first $300 of employment income per person per fortnight from the income test meaning a partner earning under $300/fortnight has no pension impact at all. Your partner’s assets also count in the combined assets test, but if your partner is under Age Pension age (67), their superannuation balance is completely exempt from the assets test one of the most valuable and underutilised features of the couples pension system.
This guide explains exactly how both tests work for couples, how the Work Bonus reduces the impact of a working partner, the specific rules when only one partner has reached pension age, and the planning strategies that can protect your entitlements while your partner continues to work.
How the Age Pension Is Assessed for Couples
When one or both members of a couple apply for the Age Pension, Services Australia assesses your combined income and assets — regardless of whether the income or assets legally belong to one or both partners. This applies equally to married couples, registered relationships, and de facto couples who have lived together for 12 months or more.
The pension rate you receive is determined by whichever test the income test or the assets test produces the lower payment. A couple can be comfortably within the income test thresholds but still have their pension reduced or eliminated by the assets test, or vice versa. Understanding both tests is essential.
The Income Test: How a Working Partner Affects Your Pension
The income test for couples assesses your combined assessable income from all sources: employment income (after the Work Bonus), investment income, rental income, business income, and deemed income from financial assets. Super in accumulation phase is not yet assessed for partners under pension age only once they reach 67 does their super become subject to deeming.
Income Test Thresholds and Taper Rate (March 2026)
| Combined Fortnightly Income | Combined Annual Income | Pension Effect |
|---|---|---|
| Up to $360/fortnight | Up to ~$9,360/year | Full pension no reduction |
| $360–$3,661.20/fortnight | ~$9,360–$95,191/year | Pension reduces by 50c per dollar above $360/fortnight |
| Above $3,661.20/fortnight | Above ~$95,191/year | No pension payable under income test |
Source: Services Australia income test for Age Pension, March 2026. Thresholds are indexed periodically.
Worked Example: Partner Earning $1,500/Fortnight
Let’s say you’re 68 and receiving the Age Pension. Your partner is 64 and working part-time, earning $1,500 gross per fortnight. Here’s how the income test affects your pension:
| Step | Amount |
|---|---|
| Partner’s employment income (gross) | $1,500/fortnight |
| Less: Work Bonus exemption (employment income only) | −$300/fortnight |
| Assessable employment income | $1,200/fortnight |
| Other combined income (deemed super, investments) | $400/fortnight (example) |
| Total combined assessable income | $1,600/fortnight |
| Less: couples free area | −$360/fortnight |
| Income above free area | $1,240/fortnight |
| Pension reduction (50c per dollar above threshold) | −$620/fortnight combined |
| Full couple pension (March 2026) | $1,777.00/fortnight combined (~$888.50 each) |
| Reduced pension under income test | $1,157/fortnight combined (~$578.50 each) |
In this example, the partner’s work income (after the Work Bonus) reduces the couple’s combined Age Pension by $620/fortnight about $16,120/year in lost pension income. Whether continuing to work is worthwhile depends on the partner’s actual wage income exceeding the pension reduction. At $1,500/fortnight gross (~$39,000/year), a partner at a 32.5% marginal rate takes home roughly $900/fortnight net and the pension reduces by $310/fortnight per person. The combined household is better off by about $590/fortnight, which is a net gain but not the full $1,500 earned.
The Work Bonus: How It Protects Your Pension
The Work Bonus is a significant concession that reduces the income test impact of employment income for Age Pension recipients and their partners. Key features as of March 2026:
- The first $300 of employment or self-employment income per person per fortnight is not counted in the income test
- Unused Work Bonus amounts accumulate in a Work Bonus bank, up to a maximum of $11,800 per person
- The accumulated bank can be used to offset employment income in future fortnights so a partner who works seasonally (e.g., tax time, busy retail periods) can build up a buffer during quiet months and draw it down during working months
- The Work Bonus applies to employment and self-employment income only not investment income, rental income, or super drawdowns
- Only one partner needs to be receiving the Age Pension for both partners to potentially benefit from the Work Bonus on their respective employment incomes
In practice, a partner earning consistently under $300/fortnight ($7,800/year) has zero income test impact on the pension. A partner doing occasional or seasonal work can bank their unused exemption and deploy it when needed making the Work Bonus a genuinely powerful tool for couples who want one partner to do casual or part-time work without consistently reducing the pension.
| Partner’s Employment Income (Fortnightly) | Work Bonus Applied | Assessable Amount | Pension Impact |
|---|---|---|---|
| $200 | $200 (full offset) | $0 | None |
| $300 | $300 (full offset) | $0 | None |
| $600 | $300 | $300 | Pension reduces by $150/fortnight combined |
| $1,000 | $300 | $700 | Pension reduces by $350/fortnight combined |
| $1,500 | $300 | $1,200 | Pension reduces by $600/fortnight combined |
The Assets Test: How Combined Assets Affect Your Pension
The assets test assesses the combined net market value of assets owned by both partners regardless of whose name they’re in. The principal home is exempt; everything else is generally assessable, including investment properties, vehicles, bank accounts, shares, super balances (once both partners have reached pension age), and business interests.
Assets Test Thresholds for Couples (March 2026)
| Couple Type | Full Pension Threshold | Part Pension Cut-Off |
|---|---|---|
| Homeowners (couple combined) | Up to $470,000 | Up to ~$1,012,500 |
| Non-homeowners (couple combined) | Up to $712,000 | Up to ~$1,254,500 |
Source: Services Australia assets test for Age Pension, March 2026. The pension reduces by $3 per fortnight for every $1,000 of assets above the full pension threshold.
The assets test taper rate of $3/fortnight per $1,000 means that for every $10,000 of combined assets above the full pension threshold, the couple’s combined pension reduces by $30/fortnight or $780/year. A homeowning couple with $700,000 in combined assessable assets ($230,000 above the $470,000 threshold) would see their combined pension reduced by approximately $690/fortnight ($230 × $3) reducing the full couple pension of $1,777/fortnight to roughly $1,087/fortnight.
The Younger Partner Super Exemption: A Critical Planning Advantage
This is one of the most valuable and most underutilised features of the couples Age Pension system. If your partner has not yet reached Age Pension age (67), their superannuation balance is completely exempt from the Age Pension assets test regardless of how large it is.
Consider this scenario: you’re 68 and receiving the Age Pension. Your partner is 63 and has $600,000 in superannuation. Under the current rules, that $600,000 is not counted in your assets test assessment at all it’s as if it doesn’t exist from Centrelink’s perspective. Your pension eligibility is assessed only on the assets in your own name and any jointly-held assets outside super.
This creates a powerful planning strategy: for couples with an age gap, directing as much wealth as possible into the younger partner’s superannuation in the years leading up to the older partner’s pension eligibility significantly reduces assessable assets and improves pension entitlement. Spouse contributions (up to $3,000/year to claim the spouse contribution tax offset, or larger non-concessional contributions if both partners are eligible), salary sacrifice, and lump-sum after-tax contributions to the younger partner’s super can all be used to maximise this exemption window.
The exemption ends when the younger partner reaches 67 at that point, their super becomes assessable under deeming rules. Planning the transition is important: the years between the older partner reaching 67 and the younger partner reaching 67 are the optimal window to maximise the exemption benefit. For a fuller treatment of how to use this strategy, see our guide on legal strategies for super and the Age Pension.
When Only One Partner Has Reached Age Pension Age
This is one of the most common and most confusing situations for Australian couples: one partner turns 67 and becomes eligible for the Age Pension, while the other is younger and still working. Here’s exactly how it works:
- The eligible partner can apply for the Age Pension at 67, even if the other partner hasn’t yet reached pension age
- Combined income assessment applies immediately the working partner’s employment income (minus the Work Bonus) is included in the combined income test for the pension recipient’s payment from day one
- The younger partner’s super is exempt from the assets test until they also reach 67
- The eligible partner is assessed at “couple” rates not “single” rates even if the younger partner isn’t receiving a pension. Couple rates are lower per person than single rates (the full single pension is $1,178.70/fortnight; the full couple rate is $888.50/fortnight per person). This is a significant financial difference that many couples aren’t expecting
- Once the younger partner reaches 67, they can apply in their own right. Both partners are then assessed together, both receive couple-rate payments, and both the income and assets tests apply to their combined position
In our experience advising 500+ Australian families, the switch from single-rate to couple-rate assessment which happens at the moment Services Australia determines both partners are in a couple relationship, even before the second partner reaches pension age is a consistent source of surprise for new pension recipients. The effective per-person pension reduction is approximately $290/fortnight (~$7,540/year) compared with what the same person would receive as a single. Understanding this well in advance allows couples to plan their income strategy around it.
How Super Drawdowns and Deeming Interact With a Working Partner’s Income
Many couples don’t realise that their superannuation balances even if they’re not drawing from them aggressively are generating “deemed income” that Centrelink assesses under the income test. Current deeming rates (2025–26) are 0.25% on the first $62,600 (single) / $103,800 (couple) of financial assets, and 2.25% above those thresholds.
This means a couple with $500,000 in combined super (both partners in pension phase, both over 67) is deemed to earn approximately $10,282 per year in income regardless of what they actually withdraw. This deemed income is added to any employment income from a working partner when calculating the combined income test result.
The interaction matters because couples sometimes assume the income test only applies to “active” income like wages. In reality, the assessment is the sum of: deemed income from financial assets, actual rental income, actual employment income (after Work Bonus), and any other assessable income sources. A couple with moderate assets and a part-time working partner can find themselves unexpectedly above the income test threshold not because of the work income alone, but because of the combination. Services Australia’s deeming page has the current rates and thresholds.
Strategies to Protect Your Pension When Your Partner Works
1. Use the Work Bonus Strategically
If your partner’s work is seasonal or project-based, encourage them to work in patterns that maximise the Work Bonus bank. Building up the $11,800 buffer during non-working periods and drawing it down during peak earning periods means shorter, higher-earning work bursts have minimal pension impact compared with the same total income spread across every fortnight.
2. Direct Contributions to the Younger Partner’s Super
If your partner is under 67, building their super balance during the years before they reach pension age reduces your combined assessable assets and the income deemed from those assets once they turn 67. Spouse contributions up to the non-concessional cap ($110,000/year or $330,000 over three years under the bring-forward rule) directed into the younger partner’s super while it’s exempt from assessment is one of the highest-return pension optimisation strategies available to age-gap couples.
3. Understand Which Test Is Binding
Run both the income test and the assets test calculation separately your pension is determined by whichever produces the lower payment. If you’re well within the assets test but close to the income test cut-off, the focus should be on income management. If your assets are the binding constraint, income changes won’t help much. Services Australia’s online payment estimator allows you to model different income and asset scenarios before making decisions.
4. Super Contribution Splitting
Superannuation contribution splitting allows a member to transfer up to 85% of their concessional (employer and salary sacrifice) contributions from the previous financial year to their spouse’s super account. This doesn’t increase the total super balance it redistributes it between partners. The benefit is evening out super balances between partners, which can improve Age Pension eligibility when both are eventually drawing from super (more even balances may produce lower combined deemed income than one very large and one very small balance). Contribution splitting must be requested from your super fund directly; the ATO’s contribution splitting guidance covers the rules and process.
5. Report Income Changes Promptly
If your partner’s work hours or income change whether increasing or decreasing you are required to report this to Services Australia within 14 days. Failing to report accurately can result in overpayments that must be repaid, or potential penalties. Online reporting through myGov makes this straightforward, and proactive reporting also means pension increases are processed quickly if income falls.
Frequently Asked Questions
Yes your partner’s employment income is included in the combined income assessment for your Age Pension, regardless of whether they’re also receiving the pension. Services Australia assesses couples’ combined income and assets from all sources. However, the Work Bonus exempts the first $300 of employment income per person per fortnight from the income test so a partner earning up to $300/fortnight has no pension impact at all. For partners earning above this threshold, the pension reduces by 50 cents for every dollar of combined income above $360/fortnight (March 2026). The Services Australia income test page has the current thresholds and examples.
Using the Work Bonus, your partner can earn up to $300/fortnight ($7,800/year) in employment income with no pension impact whatsoever. Beyond that, the combined income free area for couples is $360/fortnight so if your only combined assessable income is your partner’s employment income after the Work Bonus, they can earn up to $660/fortnight ($300 Work Bonus + $360 free area = $660) before your pension reduces at all. Above $660/fortnight combined assessable income, the pension reduces by 50 cents per dollar. If your partner has banked unused Work Bonus (up to $11,800), they can use that buffer for higher-earning periods. The exact thresholds are updated periodically by Services Australia.
It depends on whether your partner has reached Age Pension age (67). If your partner is under 67, their superannuation balance is completely exempt from the Age Pension assets test regardless of how large it is. This is one of the most powerful planning advantages for age-gap couples. Once your partner reaches 67, their super becomes assessable under deeming rules. Planning to maximise the younger partner’s super balance while it’s still exempt can significantly improve the older partner’s pension entitlement during the gap years between their respective pension eligibility dates.
As a couple which means you receive the couple rate of pension per person, not the single rate. The full couple pension (March 2026) is $888.50/fortnight per person; the full single pension is $1,178.70/fortnight. This $290/fortnight per person difference (~$7,540/year) applies from the moment Services Australia classifies you as a couple, even before your younger partner reaches pension age. Your younger partner’s employment income is also included in the combined income assessment from that point. This is a significant transition many couples don’t anticipate understanding it before the older partner applies allows you to plan the household income strategy in advance.
The Work Bonus is a concession that excludes the first $300 of employment or self-employment income per person per fortnight from the Age Pension income test. Unused amounts accumulate in a Work Bonus bank up to a maximum of $11,800 per person, which can be drawn down during higher-earning fortnights. The Work Bonus applies to employment income only it does not reduce the impact of investment income, rental income, or super drawdowns. For a couple where one partner works casually or seasonally, the Work Bonus can significantly reduce or eliminate the pension impact of that income. Current rules are available from Services Australia’s Work Bonus page.
Not necessarily it depends on whether the net household financial position is better with or without the work. A partner earning $1,500/fortnight reduces the couple’s combined pension by approximately $600/fortnight after the Work Bonus, but they’re also contributing $1,500/fortnight in employment income. The household is better off by $900/fortnight before tax a meaningful gain even after the pension reduction. The calculation changes if the partner earns enough to eliminate the pension entirely (above ~$3,661/fortnight combined assessable income), or if the marginal tax on work income plus the pension reduction makes continuing to work financially neutral. Running the combined household income analysis accounting for work income, pension reduction, tax, and super contributions is the right way to make this decision rather than assuming work always hurts. A financial adviser can model this for your specific numbers.
You must report any changes to your partner’s employment income within 14 days of the change occurring. This includes starting new work, changing hours, receiving a pay increase, or stopping work. Report through your myGov account linked to Centrelink, or by calling Services Australia directly. Prompt reporting ensures your pension is correctly calculated if income decreases, you want the pension adjustment to happen quickly; if income increases, you need to report it to avoid an overpayment that will need to be repaid. Persistent failure to report can result in a debt and potential fraud investigation. The Services Australia reporting page explains what, when, and how to report.
Plan Your Couple Pension Position Before Either Partner Reaches 67
The decisions you make in the 3–5 years before the older partner reaches Age Pension age have a disproportionate impact on your lifetime pension entitlement. Where super balances sit, whether the younger partner’s super has been maximised while exempt, how work income is structured relative to the Work Bonus these decisions made in advance produce far better outcomes than those made reactively after the pension has already been affected.
For more on the legal strategies available to couples to maximise Age Pension eligibility, see our guide on legal strategies for super and the Age Pension. And for the full application process and what to expect when applying, see our guide on how to apply for the Age Pension.
At Wealthlab, we help Australian couples model their combined Age Pension position running both the income test and assets test across different scenarios, identifying the optimal super structure for the younger partner’s exempt period, and ensuring the Work Bonus is being used strategically. Book a free consultation today to understand exactly how your partner’s work and assets affect your pension and what you can do about it.