How much income can you earn while on the Age Pension?

What's the allowable income for someone on the Age Pension?

How much income can you earn while on the Age Pension?

How much income can you earn while on the Age Pension?
You can still receive a certain amount of income and receive an Age Pension. This income can be derived from investments, property rental or as a salary from employment, as well as several other means.

Exceeding the fortnightly income limit will see your pension reduced by 50 cents for every $1 over the limit, until you reach the disqualification limit for a part Age Pension, at which point your Age Pension payment will cease.

For those who have reached the Age Pension age but continue to work, the Work Bonus may mean that you still qualify for a part, or even full Age Pension depending on your income. 

What is the Work Bonus scheme?
The Work Bonus is an initiative to help older Australians access the benefits of working while getting a pension. The Work Bonus provides a concession for employment income for all workers who earn money after reaching Age Pension age. This means the first $250 of an individual's earnings (or $300 from 1 July) will not count as income under the income test. This doubles for couples, where both are working – both parties may have the first $250 per fortnight (or $300 from 1 July) of their own employment income not counted.

This could mean up to an extra $125 of pension income a fortnight (approximately $3250 a year) for those on a single Age Pension and double this amount for a couple where both are working.

Self-employment will also be assessed as part of the Work Bonus.

Only income derived from salary paid in or outside Australia and director’s fees will be disregarded under the Work Bonus.

Income from payments to a principal from sole traders or partnerships, investments and superannuation are not subject to the Work Bonus.

Can you ‘bank’ your Work Bonus?
If your employment is seasonal or sporadic, you can ‘bank’ your Work Bonus allowance, to a maximum of $6500 $7800 from 1 July), which can then be applied when required. This also means that if you have not worked for the whole previous year, you can earn $6500 before your Age Pension is affected. You do not need to apply for the Work Bonus, Centrelink will automatically apply it when your report your income.

You need to report your earnings when you work and not after you have reached the limits. Centrelink will inform you of your reporting requirements.

The accrued amount will change each fortnight to a maximum of $300 a fortnight or $7800 by the end of the financial year.

How does the Work Bonus scheme work?
If you don’t work, Centrelink adds $250 to your Work Bonus balance each fortnight. Centrelink stops adding the Work Bonus once your balance reaches $6500.

If you work and earn less than $250 a fortnight, Centrelink uses some of your $250 work bonus to reduce your employment income to zero and adds the rest of your $250 to your Work Bonus balance.

If you earn exactly $250 a fortnight, Centrelink will use all of your $250 Work Bonus to reduce your employment income to zero and your Work Bonus balance won’t change.

If you earn more than $250 a fortnight, Centrelink will use all of your fortnightly Work Bonus to reduce your employment income by $250 and will reduce the remaining employment income by any Work Bonus balance that you have.

Case study
Alan is on a full Age Pension and hasn’t been working for five years. He has been offered some part-time work behind the bar at his local bowls club. He will earn $150 a fortnight for doing a few hours behind the bar on weekends.

The Work Bonus will be applied, reducing Alan’s employment income to zero, meaning that his pension payment will be unaffected.

Centrelink will continue to increase his Work Bonus balance by $100 per fortnight as he is not using all of his entitlement, so if he wants to increase his hours down the track, he can still do it without affecting his pension.

Changes on the way
The Pension Work Bonus will be expanded from 1 July 2019, with $300 per fortnight to be excluded from the income test instead of $250. And, for the first time, it will be extended to include earnings from self-employment. A pensioner will be able to earn $7800 per year through self-employment without an impact on his or her Age Pension. This is in addition to the income-free area, which is currently $300 a fortnight (combined) for a pensioner couple.

What do the changes mean for the self-employed?
From 1 July 2019, Centrelink will apply the Work Bonus to self-employment income from active participation.

Active participation means that you are doing work that involves effort. This is the opposite of income from passive involvement.

Examples of work involving active participation include:

  • bookkeeping
  • lawn mowing
  • plumbing.


Active participation does not include managing an investment portfolio or rental properties owned by a family trust or a family company.

Case study
William runs a business and earns income from self-employment. From 1 July 2019, Centrelink will apply the Work Bonus to this income.

William’s business income is $32,500 per year. This is $1250 per fortnight. William hasn’t worked as an employee since getting the Age Pension over 12 months ago. Because of this, William has a Work Bonus balance of $6500.

Centrelink applies the Work Bonus accrued to William’s self-employment income until the balance reaches $0. Once the balance reaches $0, Centrelink will apply the Work Bonus to William’s income up to the Work Bonus limit. From July, that will be $300 per fortnight.

For the first six fortnights after 1 July 2019, William’s Age Pension rate will increase. This is because Centrelink won’t include business income in William’s income test until the Work Bonus balance is $0. Then William will have one fortnight when Centrelink will only include $150 in the income test. From 7 October 2019, once William’s balance is $0, Centrelink will include all income over $300 in William’s income test.

So, how much can I earn and still keep the Age Pension?
Limits for the full Age Pension are indexed on 1 July each year and the limits for part Age Pensions are indexed in March, July and September of each year. Details of the current income limits can be found in the table below.

Pension Disqualifying Income Limits from 20 March 2019


For full pension/allowance (per fortnight)

For part pension(pf) 


up to $172

less than $2024.40

Couple (combined)

up to $304

less than $3096.40

Illness separated (couple combined)

up to $304

less than $4008.80

For more information on what constitutes income, visit


    To make a comment, please register or login
    7th Jun 2019
    If you work on a casual basis like I do this is the best way. I work six months a year on a one month on and one month off basis. During the six months that I work I earn around $100,000 and I receive no pension during those months. During the six months that I do not work I receive the full pension with no discount. This is because I am a casual employee. When I finish my first months work I am unemployed and entitled to the full pension. On the third month I start work again and get no pension etc etc. I report my income every two weeks.
    7th Jun 2019
    Now thats a great scam, how do I get on to that ??
    7th Jun 2019
    Many millions in bureaucratic costs to administer all of this. Instead just have a universal aged pension which is taxed in the usual way (including all income). Save govt maybe billion $$.
    7th Jun 2019
    No Scam. All legal. Casual employment agreement upload to Centrelink. Income reported every two weeks. The thing is you need to be casual not part time.
    7th Jun 2019
    PS. I pay more in tax than I receive in pension. So I pay for my own pension. Its a win win
    7th Jun 2019
    So basically no benefit overall to yourself ??
    8th Jun 2019
    Agree with you 100% Johnp, Our Govt's can't think or look past their noses, yet could save $billions per year with a universal age pension....but no...They've got to make sure there are some left on the bottom rung of the ladder...
    9th Jun 2019
    I can't see why you need assistance if you receive $100K per year (in half a year.)

    Sounds like a teachers salary and work hours perhaps without some of the conditions.

    Better than the income of most workers that pay for pensions and conditions.

    7th Jun 2019
    This is all about getting rid of the Age Pension for our children and grandchildren.

    The Age Pension should be 60. Most of our politicians retire young.

    Australians should not have to work till they drop so that politicians can have a luxury retirement.
    7th Jun 2019
    Agree with you 100%
    7th Jun 2019
    I just wonder what long haired git with earings and a ponytail at centrelink thought up this stupid and complicated system ?
    Its as if when they were sitting down having their morning latte, were thinking "I waoner what stupid idea I can come up with today",
    Well buddy, your sure did with this one :(
    7th Jun 2019
    Earrings I can handle, Ken, but dealing with people with rings thru their nostrils in a public office gives me the shudders.
    7th Jun 2019
    Basically the gits at centrelink thought to themselves as follows.
    How can we ensure lucrative high paying ongoing employment in the public service like a "sheltered workshop". Bright idea : keep an ongoing complicated bureaucratic system where pensioners etc have to go thru all the rigamarole of frequently submitting paperwork continually forever!!
    7th Jun 2019
    Question is --- if you earn extra income below $172 per fortnight for singles ,
    do you have to report it to Centrelink?
    What about the value of earned Flyby reward points? or,
    Gift card rewards from doing online surveys? or,
    What about the 4c per litre of fuel saving on shopping at Woolworths?......
    7th Jun 2019
    Also declare the profits from selling pencils in a cup at a street corner - you know it all adds up.
    7th Jun 2019
    ok but if it amounts to below the $172 do you have to report it?
    22nd Jun 2019
    What about selling things online that you have previously paid more for and now only get a quarter of the money back that you originally bought it for?
    80 plus
    7th Jun 2019
    The article is bit misleading, it should read income you receive, I am the recipient of a part UK pension which CENTERLINK insit are earnings.
    7th Jun 2019
    What happened to the Governments review of Deeming Rates? As they continue to defraud pensioners and part pensioners! 3.25% is robbing senior citizens!
    7th Jun 2019
    Yes Tricky, hit the nail on the head. No mention at all on deeming rates after NRB reduced interest rates. Labour or Liberal, I don't think they want to touch this subject. Josh Frydenberg warns about banks not passing on the cut but has not mention of getting realistic in regards to the couple $85000 plus 3.25% asset test. Anything less than the couple $85000 is 1.75%. So the Government needs to get into the real world of where you will lucky to get 2.4% investment rate without high risk in a bank.
    20th Nov 2019
    Right on the nose Tricky.
    8th Jun 2019
    The work bonus is a joke.. If a full pensioner can get work that pays him/her $10K per year, then there should be no penalty...They're still living on the breadline....This government and the Centrelink rules stink...
    8th Jun 2019
    Age pensioners had a chance to get rid of this govt last election but they didn't...serves them right..
    Good choices
    11th Jun 2019
    Can we have a discussion about Roar ting Centrelink. You see on A Current Affair, etc... how people are being caught out,,,,,if you definitely 100% know of roarters Centrelink do nothing about it.
    You can hide money in bank accounts that you do not give a Tax File No. to, I'm not sure how that works, can anyone clarify that.

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