The Work Bonus enables older workers to supplement their Age Pension while remaining in the workforce. Jerry would like to know if he will be eligible for this payment.
I am fast approaching retirement age and have always believed that once 65 arrived, I would simply stop working. However, my finances now dictate otherwise and I believe there is a new Federal Government scheme which may enable me to keep working while still getting a pension. Can you give me some more advice on this?
A. Jerry, we believe the scheme to which you refer is the Work Bonus. This was first introduced in September 2009 to replace the Pension Bonus Scheme.
As part of the recent federal budget, the Work Bonus Scheme has undergone some amendments to make it more financially advantageous to those who wish, or need, to continue working after reaching Age Pension age.
Changes to Work Bonus from 1 July 2011 mean that any eligible age pensioner can earn up to $250 per fortnight without it being assessed as income under the pension income test, therefore enabling them to keep more of their applicable pension.
To receive the Work Bonus you must be over Age Pension age and receive one of the following:
- Age Pension
- Carer Payment
- Bereavement Allowance
- Disability Support Pension
- Widow B Pension
- Wife Pension
The other, and perhaps most important, change is that any unused portion of the excluded fortnightly $250 will accumulate in an ‘income bank’ up to a maximum annual amount of $6,500. This will benefit seasonal workers or those whose income varies from fortnight to fortnight.
Bill claims the single Age Pension and is offered a pert-time job at his local DIY store for which his take-home pay will be $372 per fortnight. Under the Work Bonus, $250 of income will not be assessed, leaving his assessable income as $122 per fortnight. As this is below the full Age Pension income threshold of $164, Bill can keep the whole $372 income and is still paid the full Age Pension.
Pauline marks exam papers for her local university. Twice a year in June and December she earns $3,000 for four weeks’ work. As she has accumulated an unused Work Bonus of $3,250 prior to each of these periods of work, this income is not assessed and she still receives her full Age Pension.
To simplify the claiming process, Centrelink will automatically apply the Work Bonus when you report your fortnightly earnings. Only income derived from salary, wages, commissions and leave payments from your current employer will be disregarded under the Work Bonus. Income from payments to a principal from sole traders or partnerships, investments, leave payments paid out on termination and superannuation are not subject to the Work Bonus.
For more information on how the Work Bonus can benefit you once you reach Age Pension age, visit www.centrelink.gov.au