In short

Accumulation phase super and post-2015 account-based pensions are both assessed by Centrelink as financial assets subject to deeming — there is no Age Pension advantage to either phase. The genuine difference is tax: accumulation earnings are taxed at 15% inside the fund, while pension phase earnings are tax-free, up to the Transfer Balance Cap of $2.1 million for FY2026-27.

For retirees who have not yet started drawing a pension from their superannuation — or who have some super remaining in accumulation phase alongside an account-based pension — a common question is whether accumulation phase super is treated differently from pension phase super for Age Pension purposes. The short answer is no, for most modern account-based pensions: both accumulation phase super and post-2015 account-based pensions are assessed as financial assets with deeming applied. The more important difference between the two phases is tax, not Centrelink.

How accumulation phase super is assessed

Super held in accumulation phase — money inside a super fund that has not yet been converted to an income stream — is assessed under the Age Pension means test as a financial asset at the current account balance. Deeming applies to that balance exactly as it would to a bank account or managed fund. The deemed income is counted for the income test; the balance is counted for the assets test. There is no exemption, no special treatment, and no reduction for the fact that the money is locked in a superannuation structure.

This is a common misconception among people approaching retirement: that super in accumulation phase somehow sits outside the Centrelink means test. It does not. Once a person has reached pension age (67 for most people born on or after 1 January 1957), their super balance — wherever it sits within the fund — is counted.

How post-2015 account-based pensions are assessed

Account-based pensions commenced on or after 1 January 2015 are also assessed under deeming — the same framework as accumulation phase. The balance of the pension account is treated as a financial asset, and deemed income is applied to it. In this sense, for a person whose super is all in a post-2015 account-based pension, shifting from accumulation to pension phase does not change the Centrelink assessment at all. The balance is the same; the deeming is the same; the asset test count is the same.

The important exception: grandfathered pre-2015 ABPs

The one situation where the phase choice does affect Centrelink treatment is for account-based pensions commenced before 1 January 2015 — the "grandfathered" cohort. These pensions use the deduction method for the income test: annual pension payments are assessed net of a "deductible amount" calculated from the original purchase price and the ABS life expectancy at commencement. The result is typically a much lower assessed income than deeming would produce on the same balance. For pensioners with substantial grandfathered ABPs, the deduction method can make a material difference to pension entitlement compared with deeming — which is exactly what would apply if the same money were in accumulation phase or a post-2015 pension.

If you have a grandfathered ABP, keeping it in pension phase and maintaining the grandfathering status matters. The moment a grandfathered ABP ceases — through closure, fund transfer, commutation — the grandfathering is lost permanently.

Where phase choice does matter: tax

For retirees over 60, the substantive difference between accumulation and pension phase is the earnings tax within the super fund. Accumulation phase earnings are taxed at 15% inside the fund; pension phase earnings are taxed at 0%. For a $500,000 super balance generating a 6% annual return, the difference is $4,500 per year in after-tax fund earnings. Over a 20-year retirement, compounded, this difference is significant. And this calculation sits on top of the Centrelink assessment, which is unchanged between phases.

The tax-free earnings in pension phase are a genuine advantage, and for most retirees over 60 who have satisfied a condition of release, there is no tax reason to remain in accumulation. The Centrelink assessment is the same; the tax outcome is better in pension phase.

The Transfer Balance Cap

The 0% earnings tax benefit in pension phase is subject to the Transfer Balance Cap (TBC) — currently $2.1 million for FY2026-27, up from $2.0 million in FY2025-26 following 1 July 2026 indexation (FirstTech Super Rates & Thresholds). Super in excess of the TBC must remain in accumulation phase, where it continues to earn tax at 15%. For retirees with substantial balances above $2.1 million, the portion above the TBC stays in accumulation — assessed under deeming for Centrelink like the pension phase portion, but taxed at 15% rather than 0%.

When accumulation phase is retained deliberately

There are specific reasons a retiree might keep some super in accumulation phase even when pension phase is available. The most common is insurance — some life, TPD, and income protection insurance policies within super can only be held in accumulation phase, not in a pension. A retiree who needs to maintain that cover retains the relevant accumulation account. The super in that account is assessed under deeming for Centrelink — the same as pension phase — but taxed at 15% on earnings. Whether the cost (15% earnings tax) is worth paying for the benefit (insurance cover) is a personal calculation.

A brief accumulation period during the transition to pension phase is also common — the fund transfers the balance to a pension account, and there is a processing period. This is a practical, not strategic, accumulation period.

For most retirees over 60 with no specific reason for accumulation phase retention, transitioning to a pension phase account-based pension is generally the better outcome: same Centrelink assessment, lower earnings tax, and the ability to draw tax-free pension payments.

Sources

Key takeaways

  • Super in accumulation phase is assessed by Centrelink as a financial asset subject to deeming — exactly like a bank account or managed fund, with no special exemption.
  • Post-2015 account-based pensions are assessed under the same deeming rules, so moving from accumulation to a post-2015 pension does not change the Centrelink assessment at all.
  • Grandfathered account-based pensions commenced before 1 January 2015 use the deduction method instead of deeming, typically producing a lower assessed income — but the grandfathering is lost permanently once the pension ceases.
  • The real difference between accumulation and pension phase is tax: 15% earnings tax in accumulation versus 0% in pension phase, up to the Transfer Balance Cap ($2.1 million for FY2026-27).
  • Retirees sometimes keep super in accumulation deliberately — most commonly to retain insurance cover that can only be held in an accumulation account.

Frequently asked questions

Does Centrelink treat my super differently if it's in accumulation phase versus pension phase?

For most modern accounts, no. Both accumulation phase super and post-2015 account-based pensions are assessed as financial assets and deemed using the same rates. The balance and the deemed income are counted the same way regardless of phase.

What is the exception where phase does affect my Centrelink assessment?

Account-based pensions commenced before 1 January 2015 — the grandfathered cohort — use the deduction method for the income test instead of deeming, which typically produces a lower assessed income. This grandfathering is lost permanently if the pension is closed, transferred, or commuted.

If Centrelink treats accumulation and pension phase the same, why move to pension phase at all?

Tax. Pension phase earnings are taxed at 0% inside the fund, while accumulation phase earnings are taxed at 15%. For most retirees over 60 who've met a condition of release, there's no tax reason to stay in accumulation — but the Centrelink assessment itself is unchanged either way.

Why would someone deliberately keep super in accumulation phase?

The most common reason is insurance — some life, TPD and income protection policies inside super can only be held in an accumulation account, not a pension account. Retirees who need to keep that cover retain the accumulation balance and accept the 15% earnings tax as the cost.

A note on advice. This article is general information only and doesn't account for your personal circumstances. Everyone's situation is different — before acting, it's worth talking it through with a licensed adviser who knows your full picture.