Senior Australians can earn more from employment to address cost-of-living pressures without impacting their pension payments.
This is great news for people who receive the Age Pension, Disability Support Pension or Carers Payment and are at least Age Pension age. It results from the expansion of the Work Bonus, which came into effect on 1 January this year.
What’s the Work Bonus?
The Work Bonus provides pensioners of Age Pension age with an incentive to remain employed, at least part-time, by exempting a portion of their employment income from means testing. It’s relevant for pensioners who have their benefits determined by the income (not the assets) test.
The Work Bonus allows pensioners to earn $300 per fortnight from working without reducing their benefits. What’s more, any unused part of the $300 accrues in what’s called an ‘Income Bank’, where it can be used to offset future employment income.
What’s changed?
Two key changes took effect on 1 January that enhance the Work Bonus.
- Permanent increase in maximum Income Bank.
The maximum amount that can be accrued in the Income Bank permanently increased to $11,800. This limit was temporarily raised from $7,800 to $11,800 on 1 December 2022, but the increase has now been locked in. - $4,000 starting income Work Bonus balance.
New eligible pension recipients will receive a one-off starting Work Bonus balance of $4,000. Modified rules may apply to people who have previously received a pension.
We can help you work out if you might be eligible for the Work Bonus and the impact it could have if you’re thinking of starting or increasing part-time work.
Something to think about The expansion of the Work Bonus may appeal to a range of eligible pensioners, including those who:
Whatever the reason, the Work Bonus could help facilitate a more purposeful, fulfilling and financially rewarding retirement. |