What Is An Account Based Pension?

An account-based pension (ABP) is like your superannuation account, but instead of contributing money into it and locking it away until you retire, you take money out as a regular income and can access it when you like. You open an account-based pension with the super money you’ve saved over your working life. At Rest, this is known as a Rest Pension account. Once you’ve set it up, you will receive regular payments into your bank account to spend as you need it.

You can access your super and start an account-based pension after you turn 60, whether you are retired or still working. If you are still working and under 65 you may start a Rest Pension - Transition to Retirement (TTR) account. If you are retired or 65 and over, you can start a Rest Pension - Retirement account.

People sometimes get confused between an account-based pension and the Government Age Pension, so here's a comparison to show how they're different:

Account-based Pension (Rest Pension)	Government Age Pension
Income from your super savings	Income from the Government
You can open a pension when you're 60 whether you're retired or still working	You must be 67 and eligiblity will be determined by your residency, income, assets, and relationship status
Flexibility to choose the amount and frequency of payments*	If eligible, a fixed timing and the amount you receive is determined by your income, asssets, and relationship status
Payments are tax-free over the age of 60	Payments form a part of your taxable income unless it is your only source of income in retirement
How long will it last? It depends on how much you withdraw and the investment earnings you receive	Paid by government subject to eligibility tests

Can I get the Age Pension if I am also drawing an income from an account-based pension?

Yes, once you’ve reached 67, you might be eligible for the Government Age Pension, even if you have super savings (including an ABP). Explore how much super you can have and still be eligible for the Government Age Pension here.

What are the benefits of an account-based pension?

You won’t pay tax on any earnings if you have retired and your Pension account is in the retirement phase e.g. you’re retired or 65 years or over.
You have flexibility to take lump sum payments from your Rest Pension account if you need to (subject to maximum if not yet retired or 65), these are also tax free after the age of 60
You can vary the payment frequencies (fortnightly, monthly, quarterly, half-yearly or annually) and amounts (subject to annual minimum and maximum restrictions*)
Your pension account stays invested and working for you like your pre-retirement super account did while you were still working.

Are there downsides to an account-based pension?

Your investment earnings may go up or down in line with market performance.
The money in your account-based pension may not last for your lifetime.
The account-based pension forms part of the Government's income and assets tests, so it may affect how much and whether you can receive Centrelink income support payments like the Government Age Pension.
There are limits on the total amount of super that can be transferred into the retirement phase - this is called the transfer balance cap and as at 1 July 2025 is $2 million. If you exceed this cap you’ll pay an “excess transfer balance” tax.
Money left over from your account-based pension when you pass away may attract extra taxes.

Account-based pensions can be a good choice if you want a regular, flexible, and tax-effective income, but they don’t guarantee an income for life and are subject to the considerations outlined above.

Unexpected events

Returning to work after you’ve retired and accessed your super

Most retirees can return to work after accessing their super but there are things to consider.

What are the latest Age Pension rates and limits?

In this article, we’ll walk you through the current pension rates and Age Pension limits.

How much super can you have and still get the Age Pension?

Thinking of applying for the Age Pension? Find out how your super balance and overall assets could affect your eligibility for Age Pension payments.

What is an account-based pension? Your income during retirement.

What are the benefits of an account-based pension?

Are there downsides to an account-based pension?

How do I open an account-based pension?

Want to learn more?

Returning to work after you’ve retired and accessed your super

What are the latest Age Pension rates and limits?

How much super can you have and still get the Age Pension?