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A more generous Pension Work Bonus was announced in the May 2018 Federal Budget and has now passed into legislation. The change is aimed to help pensioners and other retirees remain employed, active and independent.
The Work Bonus currently allows people over pension age who receive income from employment to earn up to $250 a fortnight – or $6,500 a year – without it being assessed by Centrelink’s age pension income test.
It applies to employment income earned inside and outside Australia, paid leave while still employed, and directors’ fees. It does not apply to other sources including self-employment income, investments and superannuation income.1
Two changes will take effect on 1 July 2019:
Pensioners will also continue to accrue unused amounts of the fortnightly Work Bonus, which can exempt future earnings from the pension income test. The maximum accrual amount will increase to $7,800.
“More than 90,000 people receive an increase in their payments from July 1.” 2
Pensioners do not have to apply for the Pension Work Bonus, but they must tell Centrelink about changes to their income.
“If you get income from work, we’ll apply the Work Bonus to your income test,” the Department of Human Services says.4
A partner’s assessable income is also reduced if they are a pensioner of pension age and earn money from work. You can’t use your Work Bonus for your partner’s wages. However, applying the Work Bonus to your wages will affect your combined income which means your partner may still benefit.
The Budget papers included two case studies to help explain the changes:
Rohan is a single age pensioner working one day a week and earning $450 a fortnight. His pension is currently reduced because of his earnings. Under the changes, the first $300 of Rohan's earnings will not be assessed and only $150 will count for the pension income test. As this is less than the pension income test free area, his pension will increase by $16 per fortnight to the maximum rate.
Nisha is a single part rate age pensioner who runs a small business and earns an average of $1000 a fortnight. As her income from self-employment is now eligible for the Work Bonus, the first $300 she earns will be excluded from the pension income test, and Nisha will receive a higher part-rate age Pension. Her pension will increase by $150 per fortnight.
As a QSuper member, you have access to professional financial advisers3 who can tailor advice to suit your needs.
Find out more
1 Department of Human Services work bonus information page: www.humanservices.gov.au/individuals/services/centrelink/work-bonus Accessed 21 May 2018
2 Media Release 14/2/19 – The Hon Paul Fletcher MP, Minister for Families and Social Services.
3 Advice fees may apply. Refer to the Financial Services Guide for more information
4 Department of Human Services work bonus information page:www.humanservices.gov.au/individuals/services/centrelink/work-bonus Accessed 21 May 2018
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