A self-funded retiree pays for their own retirement from superannuation, savings and investments rather than relying on the Age Pension. Being self-funded does not mean you miss out on all government support. Many self-funded retirees can access the Commonwealth Seniors Health Card, state seniors card discounts and concessional superannuation tax settings, and some sit closer to a part Age Pension than they realise.

This guide covers what being a self-funded retiree means, the entitlements still available, the tax settings that matter and when it makes sense to get advice.

What does self-funded retiree mean?

There is no formal legal definition of a self-funded retiree. In practice, a self-funded retiree is someone of retirement age who does not receive the Age Pension or another income support payment, usually because their income or assets are above the means test limits set by Services Australia.

Self-funded retirees typically draw their income from some combination of:

• superannuation, most commonly an account-based pension
• investments held outside super, such as shares, managed funds and term deposits
• investment property rent
• part-time or consulting work

Australians reach Age Pension age at 67. Whether you are self-funded at that point is not fixed for life. Asset values change, thresholds are indexed and spending draws balances down, so a retiree’s position against the means tests can shift over time.

Entitlements self-funded retirees can still access

The Commonwealth Seniors Health Card

The Commonwealth Seniors Health Card (CSHC) is often the most valuable concession available to self-funded retirees. It gives you cheaper medicines under the Pharmaceutical Benefits Scheme, access to bulk billed doctor visits where your doctor offers them, and a lower Medicare Safety Net threshold for out-of-hospital costs. Many states, territories and private businesses offer extra discounts to cardholders.

To qualify you must be Age Pension age, meet residence rules, not be receiving an income support payment and pass an income test.

There is no assets test, which is why many wealthy retirees qualify. Applications are made through Services Australia, online via your myGov account.

The income test limits, current at the date of this review and indexed each 20 September, are:

• $101,105 a year for singles
• $161,768 a year for couples combined
• $202,210 a year for couples separated by illness, respite care or prison

The test counts your adjusted taxable income plus deemed income from account-based income streams.

Deeming assumes your account-based pension earns a set rate regardless of what it actually earns. For a couple where neither receives a pension, the first $55,300 each is deemed to earn 1.25% and the balance 3.25%; for singles the 1.25% rate applies to the first $66,800.

Because the test is income based, how your investments are held affects the assessment. A couple with several million dollars in account-based pensions can still qualify if their adjusted taxable income and deemed income stay under the limit.

State and territory seniors cards

Each state and territory runs its own seniors card scheme, separate from the CSHC. These cards provide discounted public transport, cheaper vehicle registration in some states, and discounts from thousands of participating businesses. Eligibility is generally based on age and hours worked rather than income or assets, so most self-funded retirees can qualify; each state scheme sets and assesses its own rules. Apply through your state or territory government.

A part Age Pension may be closer than you think

Self-funded status is not always permanent. Under the assets test, a part pension only cuts out once assets exceed the following limits, which apply from 1 July 2026:

• Single homeowner: $733,500
• Single non-homeowner: $1,000,500
• Couple homeowner, combined: $1,102,500
• Couple non-homeowner, combined: $1,369,500

The family home is exempt from the assets test. A part pension can also bring access to the Pensioner Concession Card.

The limits are reviewed by the Department of Social Services three times a year, and retirees draw assets down over time, so eligibility is reassessed against moving numbers; a position that misses out today will not necessarily miss out in future.

Eligibility is always assessed by Services Australia against the income and assets tests, and the outcome depends on individual circumstances.

How super is taxed for self-funded retirees

Superannuation is where self-funded retirees usually hold most of their wealth, and its tax settings are the reason.

Withdrawals after 60 are generally tax-free. Once you are 60 or over, lump sums and pension payments from a taxed super fund are tax-free and do not count toward your taxable income. Payments from untaxed funds, such as some public sector schemes, can still be taxed.

Earnings in the retirement phase are tax-free. When you move super into a retirement phase account-based pension, investment earnings on those assets are taxed at 0%. Earnings on money left in accumulation are taxed at up to 15%.

The transfer balance cap limits how much gets the 0% rate. The general transfer balance cap is $2.1 million from 1 July 2026. Amounts above your cap stay in accumulation, where earnings are taxed at up to 15%, which is still concessional compared with marginal rates.

Because super income after 60 is generally not taxable income, many self-funded retirees have a low adjusted taxable income. That is exactly what keeps them under the CSHC income limits.

Other tax considerations

Investments outside super are taxed normally. Interest, dividends, rent and capital gains on assets held in your own name are assessed at marginal rates. Franking credits attached to Australian share dividends can reduce the tax payable; how they apply in a given year is a question for a registered tax agent or Alteris Accounting.

The seniors and pensioners tax offset (SAPTO) can reduce tax to nil. SAPTO is available to retirees of Age Pension age, including those who do not receive a pension because of the means tests. For 2025-26 the maximum offset is $2,230 for singles, with entitlement cutting out at a rebate income of $52,759; each member of a couple can receive up to $1,602, cutting out at $43,810 each. Combined with the tax-free treatment of super income, SAPTO means many self-funded retirees pay little or no tax on modest outside-super income.

Capital gains tax does not stop at retirement. Selling investments to fund retirement or restructure into super can trigger CGT. The timing of disposals across financial years can change the outcome, which is one reason retirees take advice before selling. Tax questions specific to your situation should go to a registered tax agent or Alteris Accounting.

When self-funded retirees typically seek advice

Self-funded retirees most commonly seek advice at these points:

• Approaching retirement. Deciding how much to move into an account-based pension, how to invest it and how long it needs to last. Our guide to easing into retirement covers the transition years.
• Reviewing CSHC eligibility. Understanding how adjusted taxable income and deemed income are assessed against the card’s income test.
• Approaching the assets test thresholds. Working out whether a part Age Pension and Pensioner Concession Card may become available.
• Selling a business, property or the family home. Managing CGT, contribution caps and downsizer contributions in the right order.
• Gifting to family. Gifts above the gifting free areas are still assessed by Centrelink for 5 years, which matters if a pension application is ahead. See how gifts affect fees and the Age Pension.
• Estate planning. Super death benefits can be taxed differently depending on who receives them, so beneficiary arrangements matter.
• A partner’s death or a move to aged care. Both events change income, assets, entitlements and tax at a stressful time.

A licensed financial adviser can assess how these settings fit your objectives, financial situation and needs. Alteris Financial Group provides wealth management advice on superannuation, retirement income and investment structures, with accounting support available through Alteris Accounting.

Frequently asked questions

Can a self-funded retiree get the Age Pension later?

Yes. Eligibility is assessed by Services Australia against the income and assets tests. Thresholds are indexed while retirees draw down assets, so a retiree who starts out self-funded can become eligible for a part pension later; the outcome depends on individual circumstances.

Do self-funded retirees pay income tax?

Often very little. Super income after 60 from a taxed fund is generally tax-free, and SAPTO plus the tax-free threshold, shelter modest income from other sources. Tax applies to investment income and capital gains outside super at normal rates.

Can self-funded retirees gift money to family?

Yes, any amount. For means-tested payments, Centrelink applies gifting free areas of $10,000 in one financial year and $30,000 over 5 financial years; amounts above these are counted as assets and deemed for 5 years. The CSHC has no assets test, but gifting history matters if you later apply for the Age Pension.

Can self-funded retirees keep working?

Yes, and many do. Employment income forms part of adjusted taxable income, so substantial work income counts toward the CSHC income test. Work also has no effect on the tax-free status of super withdrawals after 60 from a taxed fund.

Do self-funded retirees pay Medicare levy?

Medicare levy applies to taxable income above the low income thresholds. Retirees entitled to at least $1 of SAPTO are eligible for an increased Medicare levy low income threshold, and those whose taxable income sits below their threshold pay no levy.

Is there an assets test for the Commonwealth Seniors Health Card?

No. CSHC has an income test only. Assets matter indirectly because account-based pension balances are deemed to earn income that counts toward the test.

Alteris Financial Group Pty Ltd (ABN 59 133 479 115) holder of AFSL No. 402370. The information contained in this article is general in nature and does not take into account your personal circumstances. We recommend you consult a financial adviser whose advice will take into account your particular objectives, financial situation and individual needs.

Rates and thresholds cited are current at the date of publication and are subject to change. Check the responsible authority for current figures.

Last updated: August 2026