What Is An Account Based Pension?

	Account-based pension (Rest Pension)	Government Age Pension
Where does the money come from?	Your super savings	The government
When can you start getting payments?	After you turn 60	After you turn 67
Am I eligible?	If you have at least $10,000 in super	If your assets and income are below the Age Pension assets and income test limits
Can you choose the amount and frequency of your payments?	Yes – choose how often you want to receive your pension payments and how much you want them to be, as long as they meet the minimum payment amount¹	No – payments are made fortnightly and the amount you receive depends on your income and assets
Are the payments tax-free?	Yes	No – they form part of your taxable income (unless it’s your only source of income in retirement)²
How long will the payments last?	Until your super runs out, which depends on your investment returns and how much you withdraw from your account	Your whole life, as long as you remain eligible to receive payments

Judy retires

Judy is thrilled to retire shortly before her 67th birthday. After working hard all her life as a sales assistant, she’s ready to enjoy retirement on her own terms.

Her retirement planning pays off

For the past 10 years, Judy has been making extra contributions to her Rest Super account to get ready for retirement.

Combined with the contributions her employer makes for her, this has helped her balance grow faster.

When she retires, Judy’s super balance is $240,000.

She decides to open a Rest Pension account

Because Judy is over 60 and retired, she can use her super to open a Rest Pension account. This will provide her with a regular income in retirement. Her pension payments and investment earnings will both be tax-free.
She’s also eligible to receive a Rest Retirement Bonus because she has had her Rest Super account for more than 12 months. This gives her a little bit extra to start her Rest Pension.

Judy speaks to a Super Specialist

Before opening her Rest Pension account, Judy books a call with a Super Specialist to make sure she understands how the account works. After the call, Judy completes the Rest Pension application form and sends it to Rest. She chooses to receive fortnightly payments of $500 after checking to make sure this amount meets the minimum payment rate set by the government.

She applies for the government Age Pension

When Judy chats to the Super Specialist, they tell her about the free Retirement Essentials¹ calculator that she can use to check her eligibility for the government Age Pension.

The calculator shows that she should be eligible to receive payments, so Judy submits her application as soon as she’s allowed to (13 weeks before her 67th birthday).

Her application is approved and she’s eligible to start receiving the maximum Age Pension payments. This means she’ll get $1,200.90 each fortnight (the maximum payment of $1,100.30, plus the pension and energy supplements).

Judy receives fortnightly payments

Every fortnight, Judy receives $500 from her Rest Pension account and $1,200.90 from the government. Both of these payments go straight into her bank account.

Combined, these payments add up to $44,223.40 each year.

Judy’s Rest Pension keeps growing

Even though Judy is getting fortnightly payments from her Rest Pension account, the rest of her balance remains invested. This means it has the potential to keep growing, which helps her retirement savings last longer.

She takes out extra money when she needs it

Every now and again, Judy needs some extra money on top of her regular payments. She uses the money to visit her friends in Queensland and to buy Christmas presents for her family.

Judy uses the Rest App to request an extra lump sum withdrawal from her Rest Pension account. Just like her regular pension payments, the lump sum withdrawal is tax-free.

Judy enjoys her retirement without worrying about money

Between her regular pension payments, Age Pension payments and extra withdrawals, Judy has enough retirement income to meet her financial needs and enjoy the next chapter of her life.

Things to consider before opening an account-based pension

Account-based pensions can provide a regular, flexible and tax-effective income in retirement, but the money in your account may not last your lifetime.
Your investment earnings may go up or down in line with market performance.
An account-based pension forms part of the income and assets tests that are used to check your eligibility for the government Age Pension and other Centrelink income support payments.
There’s a limit on how much super can be transferred into the retirement phase of super (which includes account-based pensions and annuities). This is called the transfer balance cap. In the 2026-27 financial year, the limit is $2.1 million.

Need some help?

Our Super Specialists can answer your questions and connect you with a Rest Adviser if needed.

Book a call

1. Retirement Essentials Pty Ltd, ABN 35 615 383 232, AFSL 468859 (Retirement Essentials) is a third-party service provider. Rest has no control over and is not responsible for the services, views or actions of Retirement Essentials. Rest does not receive any payments or commissions from Retirement Essentials as a result of you using their services. You should use your own judgement before taking up any service offered by Retirement Essentials and ensure that you understand the terms and conditions which will apply to them. Rest does not accept liability for any loss or damage incurred by any person as a result of using Retirement Essentials’ services.