The processing and perception of amplitude modulation (AM) in the auditory system reflect a frequency-selective process, often described as a modulation filterbank. Previous studies on perceptual AM masking reported similar results for older listeners with hearing impairment (HI listeners) and young listeners with normal hearing (NH listeners), suggesting no effects of age or hearing loss on AM frequency selectivity. However, recent evidence has shown that age, independently of hearing loss, adversely affects AM frequency selectivity. Hence, this study aimed to disentangle the effects of hearing loss and age. A simultaneous AM masking paradigm was employed, using a sinusoidal carrier at 2.8 kHz, narrowband noise modulation maskers, and target modulation frequencies of 4, 16, 64, and 128 Hz. The results obtained from young (n = 3, 24-30 years of age) and older (n = 10, 63-77 years of age) HI listeners were compared to previously obtained data from young and older NH listeners. Notably, the HI listeners generally exhibited lower (unmasked) AM detection thresholds and greater AM frequency selectivity than their NH counterparts in both age groups. Overall, the results suggest that age negatively affects AM frequency selectivity for both NH and HI listeners, whereas hearing loss improves AM detection and AM selectivity, likely due to the loss of peripheral compression.