8th Jan 2015
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What is the Work Bonus?
Author: Craig Hall
What is the Work Bonus?

In recent times governments have introduced policies to encourage people to remain in the workforce as they approach and reach Age Pension age. One particular initiative that callers to NICRI often enquire about is the Work Bonus which replaced the Pension Bonus Scheme.

The Work Bonus is available to Age Pension recipients and exempts the first $250 of employment income per fortnight (up to $6500 per annum) under the income test, reducing the impact on the Age Pension payment. As the year progresses, any unused Work Bonus balance accumulates and is used to offset income earned later in the year. This can be particularly good for those who continue with casual employment or perform seasonal work.

Let’s look at some examples.

Jack is aged 67 and is still employed. He has reduced his hours to part-time and is eligible for a part Age Pension. He earns approximately $1150 per fortnight but taking into account the work bonus his income is assessed at $900 per fortnight. This means that under the income test Jack receives approximately $125 more Age Pension per fortnight than if the whole $1150 was assessed.

Madge, a retired teacher, is also on an Age Pension and during the end of year school exams, she is employed by the Education Department to assist. During this six-week period she receives $1000 per fortnight. Taking into account the Work Bonus, Madge’s assessable work income is reduced to $750. As Madge hadn’t worked in the financial year up to this point, her unused work bonus amounts that have accumulated was enough to offset the remaining income. Therefore there was no reduction of Age Pension.

The Work Bonus is automatically taken into account as part of the calculation of the Age Pension assessment. This means that you only need to declare your assets and income as per the usual requirements.

For more information visit the Department of Human Services website at HumanServices.gov.au.

The National Information Centre on Retirement Investments (NICRI) Inc. is an Australian Government funded, independent consumer agency providing information to the general public on investment products. If you require further information on retirement investments and investing in retirement please contact NICRI toll free on 1800 020110, email nicri@nicri.org.au. Information leaflets are also available at www.nicri.org.au.





    COMMENTS

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    Squirrel
    16th Jan 2015
    3:36pm
    If I understand this right if one is in receipt of a part age pension and wants to work casual one day a fortnight as long as his income doesn't go over the 6500 a year he will not lose his pension? What if he earns 600 in a fortnight and then nothing for a month will he be assessed and lose his pension for that fortnight?
    richo
    17th Jan 2015
    9:16am
    work bonus. how will this afect married couples if one is working part time
    Not Senile Yet!
    19th Jan 2015
    7:38pm
    Basically this is a penalty system and has no right to be called a Bonus at all!!!
    Just because you are receiving a Pension.....does not entitle the Government to penalise you because you decide to stay active and work part-time....should you still be able to!!!!
    This is our Government actively discriminating against people of a certain age under the guise of....but they are receiving a pension!!!!
    Next thing my employer will be able to say to me.....as you earn $500 part-time elsewhere......we are reducing your pay to be fair to the other employees!!!!
    What total nonsense this is!!!
    At Retirement age you are entitled to a pension......whether you work or not beyond that should be your own choice and the Government should not be allowed to Penalise you for doing so!!!
    In fact those who do.....would actually be paying tax.....which in turn would subsidise their Pension payments.....whereas they who do not or cannot......stop paying anymore tax!!!!
    What are these idiots thinking.....stop them working .....stop them paying more tax....unbelievable Penalty Mentality that belongs in the dark ages!!!!
    in2sunset
    24th Mar 2016
    6:42pm
    What is the Work Bonus? - a joke!! offers not a single incentive to keep working. Bring back the Pensioner Bonus Scheme, and that will entice me to work longer. A have a friend who was a bankrupt in his early 60's - had nothing. Not even a car, and rented a room. He continued working till aged 70, as a builder. Yes, hard work, and some times he felt like giving up (after all, at that age, the mind is willing even if the body isn't, especially for a very active and heavy job). Averaged around $120,000 wage a year, didn't take holidays, even filled in for others going on holidays. He paid of his debts, rented a nice little flat, bought a 10 year old car, and slowly put what ever he could away. When he finally chucked it in at age 70, he got a lovely pay out of $48,000 from the PBS. Add that to his meagre savings, and he is happy. Not wealthy, but happy, and budgets well. Didn't matter what he had earnt. As he said, it was the real incentive to keep working and get himself out of a financial mess.
    Now - what incentive is there? Nil. The so-called $250 a fortnight is a joke. What benefit is that? If that Pensioner Bonus Scheme was still around, I would gladly, happily work well after I am 65, even if my body is telling me to slow down. Having mandatory age limits to work to is ludicrous. All jobs are different, and so a re people.


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