Thanks to Age Pension Work Bonus, Australians who wish to continue working while receiving their pension do not suffer. This incredible initiative permits the additional income without the pension income test. This significantly helps pensioners who require income flexibility in retirement.
What Is the Age Pension Work Bonus?
The Work Bonus is a special concession which allows Age Pension recipients to earn up to $300 per fortnight from employment without it being counted in the pension income test. This allows you to have additional income while collecting your full pension.
The scheme is credited quarterly and there is a ‘Work Bonus’ bank in which you can store unused $300 per fortnight. You can keep a balance of up to $11,800 with no need to cashout the account, providing you with lots of control on when and what to work.
Key Benefits for Australian Seniors
Undoubtedly the biggest benefit is having a financially secure retirement with Work Bonus providing ‘top up’ income funding, and not needing to fully draw on the pension savings. Given the current cost of living in Australia, this is a gamechanger.
Flexibility: Casual work, consulting work, and even seasonal work is available under the Work Bonus, which can fit different working patterns that suit your circumstances and health requirements.
Economic Contribution: Staying in the field and not retiring from the workforce means you are supporting yourself, and you are also providing the Australian economy with invaluable knowledge and experience.
How the Credit System Works
Your Work Bonus bank is similar to a savings account where you can put unused employment income concessions. If you do not use your full $300 allowance in a fortnight, the unused portion gets allocated to your bank, but not more than $11,800, which is the upper limit.
This is a great system for workers with irregular work patterns. For instance if in one month you happen to earn $1,200 from casual work, in that instance you are not bound to the income deduction which will normally apply to your pension.
Who’s Eligible?
The Work Bonus is accessible to you if you are recipient of the Age Pension and are also engaged in some form of paid employment, which can include working as a paid employee, receiving wages, or earning commission on services. Investment income, income from superannuation and active business or working activities is excluded.
You receive the bonus irrespective of your age so long you are receiving the Age Pension. This is especially enticing to younger retirees who are likely to have a greater level of energy and a willingness to stay active in the labor market.
Maximising Your Work Bonus
It is advantageous for pensioners to keep count of their earnings in order to maximize the value of their Work Bonus. For example, there are value thresholds you try to hit before performing a larger job and you have enough Work Bonus credits banked. Work bonus credits get automatically banked if you do not touch a certain amount of them.
It is also important to note that the Work Bonus is not considered when calculating any other pension entitlements, including the Pension Supplement and Rent Assistance, which makes it even more enticing for working pensioners.
Looking Ahead
The Work Bonus is a testament to the willingness of the Australian Government to accept that the world of retirement today is not necessarily about leaving the world of work entirely. Many retirees appreciate the opportunity to be active and productive in exchange for the comfort of the pension.
Given that there are more and more seniors in Australia and there are also many sectors that are still in need of workers, the need for individual financial stability and the economy as a whole makes policies such as the Work Bonus increasingly useful.
For pensioners that are thinking of going back to work or increasing the hours that they currently work, the Work Bonus an ideal way to do so as it increases income with minimal complex financial repercussions.
FAQ
Q: Is all work income eligible for the Work Bonus?
A: No, the Work Bonus only pertains to employment income in the form of wages, salaries, and service fees. Investment income, rental income, and business profit do not meet the criteria for the concession.
Q: Can I use my Work Bonus credits whenever I feel like it?
A: Yes, the Work Bonus credits you’ve banked therefore your $11,800 Work Bonus credits , can be used at any time that you earn employment income in excess of the fortnightly $300, thus enhance your flexibility in pursuits that are less than regular work.
Q: Is there an effect of my work on my other Centrelink payments?
A: The Work Bonus income does not change the assets test of the income. No other benefits, like the Pension Supplement and Rent Assistance, are reduced because of Work Bonus income.
Q: Would I have to make an application for the Work Bonus?
A: No, the Work Bonus is automatically set for Age Pension recipients eligible for it and who declare an employment income. All you have to do is report your earnings to Centrelink through the usual reporting process that is.
