For many couples, retirement plans are built around travel, family and time together. When one partner’s health declines, those plans can change quickly. The other partner often becomes a carer, sometimes gradually, sometimes overnight, and the financial side of that shift is easy to overlook while everything else is happening.
The government provides two main payments for carers: Carer Payment and Carer Allowance. They are often confused, they work very differently, and how they interact with the Age Pension is one of the most misunderstood parts of the system. Some retired carers miss out on support they are entitled to. Others spend time and paperwork claiming a payment that cannot actually increase their income.
This guide explains how Carer Payment and Carer Allowance work, how they fit with the Age Pension, and what changes if your partner needs respite or moves into aged care.
Carer Payment and Carer Allowance at a glance
| Carer Payment | Carer Allowance | |
|---|---|---|
| What it is | An income support payment, paid instead of other pensions | A supplementary payment, paid on top of other income |
| Maximum rate | Same as the Age Pension: $1,237.70 a fortnight single, $933.00 each for a couple, from 20 September 2026 | $162.60 a fortnight per person cared for |
| Level of care required | Constant care for someone with a severe disability, illness or who is frail aged | Daily care and attention for someone with a disability, illness or who is frail aged |
| Income and assets test | Yes, the same tests as the Age Pension | No assets test, combined family income must be under $250,000 a year |
| Can be paid with the Age Pension? | No, you receive one or the other | Yes |
| Work limits | Up to 100 hours of work, study or volunteering in a four-week period | No work limit |
| Taxable? | Generally yes once the carer or care receiver reaches Age Pension age | No |
| Carer Supplement | $600 a year | $600 a year for each person cared for |
Rates are indexed regularly. The figures above are current as at October 2026.
The key point for retired carers
The most important thing to understand is how these payments interact with the Age Pension.
Carer Payment and the Age Pension are paid at the same rate and assessed under the same income and assets tests. You can only receive one of them. If you are already on the Age Pension, moving to Carer Payment will not increase your fortnightly income. The extra support for a retired carer usually comes from Carer Allowance, which can be paid on top of the Age Pension.
That means the right approach depends largely on the carer’s age.
- If you have reached Age Pension age, currently 67, you would generally stay on, or claim, the Age Pension and add Carer Allowance if you qualify.
- If you are younger than Age Pension age and caring for an older partner, Carer Payment may provide income support years before you would otherwise be eligible for any pension, potentially alongside Carer Allowance.
This second situation is common in couples with an age gap, where one partner’s health declines while the other is still in their late 50s or early 60s and may have had to reduce or stop work to provide care.
Carer Payment
Who is eligible
Carer Payment is for people who provide constant care in a private home to someone with a severe disability or medical condition, or who is frail aged. To be eligible:
- the care must be needed on a daily basis and be likely to continue for a significant period, or the person cared for must have a terminal condition,
- the level of care needed is assessed using a questionnaire completed by you and a report from your partner’s treating health professional,
- you must meet residence requirements, and
- you must meet the income and assets tests.
When the person you care for is your partner, your combined income and assets are assessed under the couple rules, in the same way as for the Age Pension.
How much it pays
Carer Payment is paid at the same maximum rate as the Age Pension. From 20 September 2026, that is $1,237.70 a fortnight for a single person and $933.00 a fortnight each for a member of a couple, including the Pension Supplement and Energy Supplement. Recipients also receive a Pensioner Concession Card.
The rate is reduced under the income and assets tests in exactly the same way as the Age Pension. Our guide on how the Age Pension income and assets test works explains how those reductions are calculated.
Working while receiving Carer Payment
Since March 2025, Carer Payment recipients can work, study, volunteer or undertake training for up to 100 hours in a four-week period, including travel time. That replaced the previous weekly limit and gives carers more flexibility to work irregular hours. Income from work is still assessed under the income test.
Tax
Carer Payment is generally taxable once either the carer or the person they care for reaches Age Pension age. Where both are younger, it is generally tax free. Our guide on how much you can earn in retirement without paying tax covers the offsets that mean many older Australians pay little or no tax on pension income.
Carer Allowance
Who is eligible
Carer Allowance is for people who provide daily care and attention in a private home to someone with a disability, serious illness, or who is frail aged. The threshold for the level of care is lower than for Carer Payment, so many people who would not qualify for Carer Payment can still receive Carer Allowance.
Eligibility is assessed using a questionnaire and a report from the care receiver’s treating health professional, and the condition generally needs to be expected to last at least 12 months, or be terminal.
How much it pays
Carer Allowance is $162.60 a fortnight for each person you care for. It is not reduced by your assets, and the only means test is that your combined family income must be under $250,000 a year. It is tax free and does not count as income for the Age Pension income test.
Carer Supplement
Recipients of Carer Allowance, Carer Payment, or both, also receive an annual Carer Supplement of $600, paid automatically each July. Someone receiving both payments for the same person can receive the supplement for each.
A worked example
Graham, 71, and Helen, 63, are a homeowner couple. Graham has advanced Parkinson’s disease and needs help throughout the day. Helen has reduced her part-time work to care for him. They have $350,000 in super and savings between them.
Graham is already receiving a part Age Pension.
Helen is below Age Pension age, so she cannot receive the Age Pension. If Graham’s needs meet the threshold, she may qualify for Carer Payment, assessed on the couple’s combined income and assets, providing income support up to four years before she would reach Age Pension age.
Helen may also qualify for Carer Allowance of $162.60 a fortnight, because their family income is well under $250,000. She would receive the $600 Carer Supplement for each payment each July.
When Helen turns 67, she would generally move from Carer Payment to the Age Pension at the same rate, and keep Carer Allowance if she is still caring for Graham.
The example is simplified. Actual entitlements depend on the medical assessment, the couple’s full financial position and current rates.
Respite, hospital and aged care
Temporary breaks from caring
Carers are allowed up to 63 days a calendar year when they are not providing care, known as temporary cessation of care, without losing their payment. These days can be used for respite, the care receiver’s hospital stays or the carer’s own holidays. Hospital stays may be treated more generously in some circumstances. It is worth tracking how many days have been used, especially later in the year.
Respite care, including residential respite and in-home support, can also be arranged through the aged care system. Our guide to aged care at home explains the support available to help you keep caring for your partner at home for longer.
If your partner moves into residential aged care
If your partner moves permanently into residential aged care, you are no longer providing care in a private home, so Carer Payment and Carer Allowance generally stop after the permitted period. If you are below Age Pension age and have relied on Carer Payment, you will need to consider what support is available next.
For couples already on the Age Pension, there is often an increase in income. Couples separated by illness may each be paid at the higher single rate of pension, although their combined assets are still considered under special rules. Many couples are unaware of this and do not claim it.
The move into aged care also brings significant financial decisions about accommodation payments and means-tested care fees. Our guides to how much aged care really costs, choosing between a RAD and a DAP and means-tested care fees cover those decisions in detail.
If your partner dies
Carer Payment and Carer Allowance continue for a short bereavement period, usually 14 weeks for Carer Payment, after which they stop. Surviving partners may also be entitled to a lump sum adjustment and changes to their own pension. Our guide on what happens to your Age Pension and super when your partner dies covers what to expect.
How to claim
Carer Payment and Carer Allowance are claimed through Services Australia, usually online through myGov. You will need:
- a carer questionnaire, completed by you, describing the care you provide,
- a medical report completed by your partner’s treating doctor or health professional, and
- financial information for the income and assets tests, if claiming Carer Payment.
You can claim both payments at the same time. If you are also approaching Age Pension age, it may make sense to look at the timing of your Age Pension claim alongside your carer claims. Our step-by-step guide on how to apply for the Age Pension covers that process.
Beyond payments, the government’s Carer Gateway service offers practical support for carers, including respite, counselling, peer support and coaching. Many carers find this as valuable as the financial support.
The wider financial picture
Caring for a partner changes far more than your Centrelink entitlements. It often means one partner leaving the workforce earlier than planned, higher medical and equipment costs, home modifications, and a different pattern of spending than the retirement plan assumed. Our guide to the real financial commitments of retirement looks at costs that are often underestimated.
It is also a time to review practical arrangements that become urgent when one partner’s health declines, such as enduring powers of attorney, wills, super death benefit nominations, and who has access to which accounts. These are far easier to put in place before they are needed.
For couples where one partner is still working, the decision to stop or reduce work to care involves trade-offs between income, super contributions and wellbeing. Our guide on retirement planning for couples and singles covers how a couple’s position changes over time.
Where professional advice adds value
When you are caring for a partner, financial planning often slips down the list. Yet this is exactly when the right structure can make the most difference: claiming everything you are entitled to, timing the move from Carer Payment to the Age Pension, planning for the possibility of aged care, and making sure your own financial security is protected if you outlive your partner.
A financial adviser can work out which payments you are eligible for, model how your entitlements change if your partner enters aged care, and structure your assets so the means tests and aged care fees work in your favour. Just as importantly, an adviser can take some of the administrative load off at a time when you have enough to manage.
If you are caring for a partner and want to understand your options, our retirement planning advisers in Adelaide can help.
Frequently asked questions
Can I get Carer Payment and the Age Pension at the same time?
No. Carer Payment and the Age Pension are both income support payments, paid at the same rate and assessed under the same income and assets tests, so you can only receive one. If you are of Age Pension age, you would generally receive the Age Pension and can add Carer Allowance if you qualify.
Can I get Carer Allowance while on the Age Pension?
Yes. Carer Allowance is a supplementary payment that can be paid on top of the Age Pension. It is $162.60 a fortnight for each person you care for, plus a $600 Carer Supplement each July. It is tax free and does not count as income for the Age Pension income test.
How much is Carer Payment in 2026?
From 20 September 2026, the maximum Carer Payment is $1,237.70 a fortnight for a single person and $933.00 a fortnight each for a member of a couple, including supplements. It is the same as the Age Pension and is reduced under the income and assets tests.
Is Carer Allowance means tested?
There is no assets test for Carer Allowance. The only means test is that your combined family income must be under $250,000 a year. Above that, Carer Allowance is not payable.
Can I work while receiving Carer Payment?
Yes. Carer Payment recipients can work, study, volunteer or train for up to 100 hours in a four-week period, including travel time. Income from work is still assessed under the income test and may reduce the payment.
What happens to carer payments if my partner goes into respite or hospital?
You can have up to 63 days each calendar year when you are not providing care without losing Carer Payment or Carer Allowance. These days can be used for respite, hospital stays or a break for yourself. If your partner moves into permanent residential aged care, the payments generally stop.
Is Carer Payment taxable?
Carer Payment is generally taxable once either the carer or the person being cared for reaches Age Pension age, and generally tax free if both are younger. Carer Allowance and the Carer Supplement are tax free.
General advice warning. This article contains general information only and does not take into account your objectives, financial situation or needs. Carer Payment, Carer Allowance and Age Pension rates, thresholds and eligibility rules are subject to change and are indexed regularly. Figures are current as at October 2026. Examples are illustrative only. You should consider whether the information is appropriate for you and seek personal financial advice, or contact Services Australia, before acting on any of it. Money Path Pty Ltd is a Corporate Authorised Representative (No. 001306822) of Australia National Investment Group, AFSL 522028.
