How a Younger Spouse's Super Can Increase a Couple's Age Pension Entitlement

Important information and general advice disclaimer 

The information contained in this material is general in nature and has been prepared for educational and informational purposes only. It does not take into account your personal objectives, financial situation or needs and should not be regarded as personal financial advice. 

Before making any financial or investment decision, you should consider whether the information is appropriate to your circumstances and, where appropriate, seek professional financial advice. Where a financial product is referred to, you should consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), where applicable, before making a decision. 

While reasonable care has been taken in preparing this material, information may change over time. Any taxation, superannuation, Centrelink or other legislative information is based on our understanding of the relevant rules at the time of publication and may be subject to change. 

Tony Regan is an Authorised Representative (No. 243492) of Professional Investment Services pty ltd, Australian Financial Services License No. 234951.

An often-overlooked Centrelink strategy for retired couples with an age gap

KEY IDEA

Superannuation held in accumulation phase by a spouse who is below Age Pension age is generally not counted under the Age Pension income and assets tests. This may improve the older partner's entitlement while the exemption applies.

Why this matters

For many Australian retirees, maximising Age Pension entitlements can improve household cash flow and help retirement savings last longer. One valuable, but sometimes misunderstood, planning opportunity arises when one member of a couple has reached Age Pension age and the other has not.

Centrelink generally assesses a couple on their combined financial position. However, superannuation held in accumulation phase by a person who is below Age Pension age is generally exempt from both the Age Pension assets test and income test. Once that person reaches Age Pension age, their superannuation generally becomes assessable.

Understanding the basic rules

• The older partner may be eligible for the Age Pension once they meet the age, residency and means-test requirements.

• The younger partner's super may remain in accumulation phase and is generally exempt from the Age Pension means tests while that partner is below Age Pension age.

• The older partner's account-based pension is generally assessable under the Age Pension means test.

The income test and assets test are both applied, and the test producing the lower Age Pension entitlement determines the payment.

A simple worked example

Consider the following hypothetical retired couple:

John's account-based pension would generally be included in the means tests. Sarah's accumulation balance would generally remain exempt while she is below Age Pension age. As a result, the couple's assessable financial position may be lower than if both super balances were assessable.

Can the strategy be taken further?

Depending on the couple's circumstances, it may be possible to move additional money into the younger spouse's accumulation account. This could involve withdrawing money from the older spouse's superannuation or using other available assets, then making an eligible contribution for the younger spouse.

The intended outcome is to:

• reduce assets that are currently assessable to the older partner;

• increase the amount held in the younger spouse's exempt accumulation account; and

• potentially increase the older partner's Age Pension entitlement until the younger spouse reaches Age Pension age.

Potential benefits

Higher Age Pension entitlement: A lower assessable asset position may increase a part Age Pension, depending on the couple's full circumstances and the applicable means-test settings.

Better household cash flow: Additional Age Pension income may reduce the amount the couple needs to draw from their investments.

Longer-lasting retirement savings: Lower portfolio withdrawals may help preserve retirement capital over time.

Broader planning opportunities: A spouse contribution or recontribution strategy may also support tax, estate-planning or balance-equalisation objectives, where appropriate.

Important trade-offs and risks

Tax on investment earnings

Investment earnings in accumulation phase are generally taxed within the super fund, whereas earnings supporting a retirement-phase income stream may be tax-free within the fund. The additional Age Pension benefit should therefore be compared with the extra tax and any implementation costs.

Contribution rules and caps

Any contribution must fit within the applicable contribution caps and eligibility rules. The couple must also consider their total super balances, available bring-forward arrangements and whether the contribution can be accepted by the fund.

Access to the younger spouse’s money

Money contributed to the younger spouse's superannuation may be preserved until that spouse satisfies a condition of release. The couple should retain sufficient accessible cash and investments to meet living costs and unexpected expenses.

The exemption is temporary

The younger spouse's accumulation balance will generally become assessable when they reach Age Pension age. The strategy should therefore be modelled over the available period and reviewed before that date.

Centrelink, tax and estate-planning consequences

Withdrawals, contributions, pension commutations and changes in ownership may have consequences beyond the Age Pension. Advice should consider the couple’s complete position, including cash flow, tax, beneficiary nominations, estate planning and future aged-care needs.

Who might benefit?

• Retired couples with an age gap where only one spouse has reached Age Pension age.

• Couples receiving, or potentially eligible for, a part Age Pension.

• Households whose assessable assets are above, or close to, the relevant Age Pension thresholds.

• Couples with enough accessible capital to avoid relying on the younger spouse’s preserved super balance.

• People who want their Centrelink, superannuation, tax and estate-planning strategies considered together.

Final thoughts

Age Pension outcomes are not determined only by how much a couple owns. The way assets are structured can also make a meaningful difference. For a couple where one spouse is below Age Pension age, keeping that spouse’s super in accumulation phase may legitimately reduce assessable assets and potentially improve the older partner’s Age Pension entitlement.

The strategy is not automatically suitable for every couple. Its value depends on the age gap, contribution capacity, tax consequences, accessibility of funds, current means-test position and the couple’s broader retirement goals.

Reference

Services Australia, “Superannuation - Age Pension”, accessed September 2026. https://www.servicesaustralia.gov.au/superannuation?context=22526