Is it worth Gerry’s while working on the Age Pension?

Gerry has the opportunity to earn some extra income but wonders how his Age Pension and his wife’s Newstart Allowance will be affected and whether or not it’s really worth it.

working pensioner

Gerry has the opportunity to earn some extra income but wonders how his Age Pension and his wife’s Newstart Allowance will be affected and whether or not it’s really worth it.

Q. Gerry
I am on the Age Pension and my wife, because she is not of pension age, receives Newstart Allowance. If I earn $550 per week, how will that affect:

  1. my Age Pension and
  2. my wife’s Newstart Allowance?


A. Firstly, if the $550 per week is earned through a salary, Centrelink will exclude $250 per fortnight under the Work Bonus. This means that of the $1100 you earn each fortnight, only $850 will be assessed as income. And as a member of a couple, this is in addition to the $292 per fortnight you can earn before your Age Pension is affected.

If you have not worked for a year previously, the Work Bonus will have accumulated to the maximum of $6500, so you can earn $6500 in salary before your Age Pension is affected. 

After the Work Bonus is applied, your Age Pension is reduced by 50 cents for every dollar you are over the income threshold of $292 (couple combined) per fortnight. Once you have a fortnightly income of $2970.40 (couple combined), you will no longer receive an Age Pension. This amount is inclusive of all assessable income.

In regards to your wife’s Newstart Allowance, as a member of a couple where one is receiving a pension payment, you can have a combined income of $1896.34. Again, this amount is inclusive of all assessable income.

This is general information and doesn’t take into consideration the income and assets you already have. You should confirm with Centrelink how your payment will be affected.

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    COMMENTS

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    Tonky
    12th Jun 2017
    9:59am
    Cannot understand how Gerry gets a pension and his wife is on Newstart.My wife is younger than me and is not yet on pensionable age but gets nothing from Centrelink and we just have my age pension to live on?
    Nan Norma
    12th Jun 2017
    11:31am
    I'd be inquiring again about that. Doesn't sound right to me and staff do sometimes get it wrong.
    iamnotold
    12th Jun 2017
    11:45am
    She has to apply for Newstart and do all the job hunting/volunteer work that goes with it to be able to get it, not much is automatic with Centrelink.
    GiGi
    12th Jun 2017
    3:03pm
    So, Gerry, to make things clearer, if you earn $1100 pf [and do not have other income assets or tax liabilities to muddy the waters], you would receive the full couples pension less $279 pf (i.e. $850-$292 = $558 divided by 2 = $279). Not too shabby, really, what?
    Theo1943
    12th Jun 2017
    5:58pm
    My experience shows that Debbie has given an incomplete answer. The work bonus is indeed $250 per fortnight, but it accumulates. If Gerry has not worked for a year, the Work Bonus will have accumulated to the maximum of $6500. He can earn $6500 before it affects his pension. If he has no accumulated Work Bonus the he gets the $250 with no penalty as well as $288 on the income allowance. He can therefore earn $538. If his wife was a pensioner she could also earn $250 before anything is deducted from their pension.

    The balance of the Work Bonus is always shown on the income reporting form. e.g. my current bonus is $1250 as I last worked in March with no bonus remaining. I can earn that $1250, plus another $250 and the $288 this week and it will not affect my pension. My wife, who works two mornings per fortnight can also earn $250.

    Don't forget you may accrue a tax liability.
    Theo1943
    12th Jun 2017
    6:14pm
    Oh, and the assessed amount is the gross payment, not ex tax as Debbie said.


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