2nd Jun 2016
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How the Work Bonus can make working part time worthwhile
older school teacher thinking about the work bonus

David has been fortunate enough to be offered a part-time role teaching and would like to know how the Work Bonus applies to any payment he receives.

Q. David

I am 70 and retired from my high school teaching career at the end on 2014.  Since then I have done the occasional day’s casual teaching, and with the Work Bonus, this has not affected my part pension. 

Now I have been offered a more permanent part-time job back at my school, which will most likely be paid at the rate of $160 gross per day, and it looks like it will be for approximately two days a week – or 80 days per year. Is there an easy way of estimating how my pension might be affected? 

My wife is not yet receiving an Age Pension and we understand that when this happens, things will change again, but we will cross that bridge when we come to it.

A. The Work Bonus allows for the first $250 per fortnight or $6500 of annual income to be excluded from the Age Pension income test. As you are a member of a couple, you and your wife can have a combined income of $288 per fortnight before your Age Pension is affected. When you add the $250 from the Work Bonus, this means you can have a combined income of $538 per fortnight and you will still receive a full Age Pension.

For every dollar of income – and remember that income includes money earned from investments – you earn over this threshold, your Age Pension payment will reduce by 50 cents. For example:

Four days per fortnight @ $160 per day = $640

Minus Work Bonus allowance of $250 = $390

Amount over the income threshold = $102

Age Pension payment reduced by = $51

This is of course assuming you have no other income from superannuation, investments etc., and depending on your tax liability, the actual net income you actually earn may be less than that quoted above.

Also, your Age Pension payment is assessed under the income and the asset tests, and you are paid the lesser amount that results from both being applied.

This information is only general in nature and you should consult with a Centrelink financial services officer to confirm how your Age Pension will be affected.

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    COMMENTS

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    Roscoe
    7th Jun 2016
    10:38am
    I am on an Invalid pension and my wife is on an age pension, could you Please tell me how many Dollars or Hours, combined, we may earn or work before any reductions occur to our payments.
    Thank You.
    TREBOR
    7th Jun 2016
    5:31pm
    It's dollars, Roscoe, since jobs have different pay rates. I've just finished work and my single offset plus work bonus came to $408 a fortnight. Pretty good if you are on a minimum - I was on around $26 an hour plus penalties for weekends, so I could earn $204 a week without losing any pension - which was around 7 odd hours a week.

    I'm currently short-listed for another job doing the same - could be 20+ hours a week. To me, that matters not since I am happy to work and even 50c in the dollar on pension is better than nothing - however - I contrast this with recipients of mega super, who can have unlimited income and pay no tax after concessions all along the way to retirement and then suffer no loss for excess earnings or even pay tax on excess earnings - and you can include the politician leeches in that as well.

    My view is that everyone should receive the single pension rate and be taxed on all income according to the scales above that level, with working pensioners losing no income from pension. No problem to me.
    Cat
    7th Jun 2016
    11:03pm
    Roscoe you say that you are on the invalid pension so I am assuming that is DSP. I'm not sure if TREBOR was quoting figures that apply for DSP or the age pension. I am only questioning this because I am on the DSP and a few years back I was only able to to do a couple of short shifts a week because of my condition, and earning $20.00 per hour for even only for 3 hours a week brought me over the $160.00 per fortnight work bonus threshold, then all of that money I earned, which was not much, became subject to the .50c in the dollar deduction, and I did not get to keep the $160.00 before they started deduction from my pension. This meant that I was forced to work for .50c in the dollar for every hour I worked because once I had done only one 3 hr shift for the week, it was over the threshold.

    I rang up Centrelink twice to complain about this because I was misled to believe by them that my pension would only become subject to the deductions after earning the threshold and that this meant that I would get to keep the work bonus amount and only money after that would subject my pension to the .50c deduction. They said that is not the case and that they did the right thing by deducting by deducting .50c in the dollar based on the entire amount of earnings once I had gone over the work bonus amount which it would not even be possible to remain under as it was geared to be over the shortest amount of hours that you could legally be offered in a week.

    They then made the ridiculous claim that I was better off doing that than not working. That was rubbish because I was so limited in what I could work and lost half of all of that, suffered severe aggravation of my condition, incurred non-deductable expenses of going to work, and loss of other opportunities, for virtually no gainful financial reward for doing this work.

    I even pointed out to them that the DSP work bonus threshold had to be a sham because there was literally no way to even work under this work bonus because there is nothing less than a 3 hour shift in one week, and that was all it took to be over the threshold even on minimum wage so this meant that in reality there literally was no work bonus and that it was a sham as there was no actual way of benefiting from it. That is why I rang them a second time because it didn't seem right the way they advertise that you get to earn this before they start deducting, but they just told me the same thing as before. Even though the bonus might be a bit higher now, so is the hourly rate so I can't see how it could be any different now.

    Maybe because your wife is on the pension the situation might be different for you. Good luck with it.
    TREBOR
    8th Jun 2016
    8:19am
    Cat, not entirely sure if the exact same rules apply to DSP - if not they should - there is no Department of Second Class Pensioners here in Treborland.

    Work bonus is not the same as allowable income.... you are allowed that $160 (or whatever the going figure is), but then your work bonus should be added on top of that. If you have work bonus points of 250, you can earn that $160 + $250 = $410.

    Mine used to be $408 (unless it changed) - a max of 250 work credits per fortnight, until I ran out of work credits.

    You've been robbed as far as I can see, Cat, and Colonel C'Link is wrong.

    Take it higher to an appeal.
    TREBOR
    8th Jun 2016
    8:24am
    Single, couple combined, illness separated (couple combined) pensioners
    Single
    Fortnightly income up to $162 over $162
    Reduction in payment none – full payment 50 cents for each dollar over $162
    Couple combined, couple separated due to ill health
    Fortnightly income up to $288 over $288
    Reduction in payment none – full payment 50 cents for each dollar over $288(combined)

    https://www.humanservices.gov.au/customer/enablers/income-test-pensions

    They should never have touched the first $162 of your income and treated it to deduct 50c in the dollar. I'd say they owe you, up to $81 a fortnight, and you need to get that money back.
    Cat
    9th Jun 2016
    9:01pm
    TREBOR, thank you for that info. I still have every single payslip from the work I did, so I might be able to bring it up again. I thought that I could trust what they told me, especially since it was on 2 separate inquiries. I am really gobsmacked about this.
    Hairy
    7th Jun 2016
    11:20am
    Work bonus should be up to the minimum wage before any deductions. Im not stupid enough to work for 50cents in the $.i have worked 53 years and I've had enough going to enjoy some life before it's too late
    TREBOR
    7th Jun 2016
    5:34pm
    Don't expect political leeches to listen to that, Hairy - they're too well fed as it is to worry about you.
    FM
    7th Jun 2016
    12:30pm
    I believe a Change.org petition will be circulated tomorrow trying to put funding of retirement and pensions on the election agenda along the lines indicated below. Can you look out for it and sign it as so far no party has given any thought to seniors.

    Put your future on the election agenda. DON’T LET POLITICIANS STEAL ALL YOUR RETIREMENT.
    They have stolen most of it don’t let them steal the rest.
    Sign this petition to insist that the Political Parties: -

    1. Disclose their long term plan for funding retirement and aged care before the election.
    2. Do not raise the retirement age.
    3. Do not change the indexation of pensions.
    4. Reverse the changes to the assets test and taper rates.
    5. Restore the deductible amount of defined benefit pensions.
    6. Restore funding for aged care.
    7. Review the proposed cap on final contributions to allow people on low incomes to make greater catch up contributions as they approach retirement.

    Recessions are used as a pretext to cut back on the provision of services to the most vulnerable.
    When the economy recovers these services are not restored.
    Paulodapotter
    7th Jun 2016
    12:59pm
    Well said FM. If the LNP's adviisory body, the IPA, gets it's way they'll wittle the pension down to zero whether you need it or not.
    Aussie
    7th Jun 2016
    1:19pm
    Hi I am with you I will sign and support you mate.

    But as we know probably works or they do not even read the petition But I am with you yes, let's try we do not lose anything ....but they do .. (Our Votes)

    Maybe you may need to highlight how many of us centrelink recipient are there and let them know that we also vote and we still count for the election.

    We may be the pendulum that change the winning side ????
    GeorgeM
    8th Jun 2016
    12:32pm
    Thanks, FM, for the Info an great comments. Fully agree. Also, they should add the following:
    1. All MPs (current and past) should have their Pensions changed to be same as for everyone else - no special consideration for these boofheads who are not affected when they change rules for others.
    2. Change the complete approach to Pensions to be same as in SA (and some otherS) i.e. everyone should get a decent Pension (say a %age of Minimum Wage) from Age 65, irrespective of Assets and Income, then everyone should be taxed if income exceeds say $75,000.
    This is the time for all (current and future Pensioners, i.e. most of us) to act.
    GeorgeM
    8th Jun 2016
    12:34pm
    That should have been "...same as in USA (and some others)...
    Cruisaholic
    7th Jun 2016
    1:01pm
    The pension sucks !
    I am on a part aged pension and claim the maximum work bonus.
    My wife is still working, any extra hours she works she effectively loses 50 cents in the dollar on our combined income, who wants to work for $11.50 per hour. And the pension is calculated on pre tax income so it's a double whammy, She pays tax and also loses 50cents in the dollar on the tax.
    There is absolutely no incentive to work.
    I too could be working but why bother.
    If we had a higher income we would happily spend it, why save at our age. The extra spending would generate jobs and taxes.
    I will be voting for independents on Election Day.
    Aussie
    7th Jun 2016
    1:22pm
    Hi Mate,
    I work until 2014 and have the bonus and at the end on my tax return I been honest and got kick with about 3,000 dollars and I had to pay on a pay plan over several month from my pension ...No incentive to work at all
    ayers
    7th Jun 2016
    2:13pm
    Calculations for old-age pensioners for per fortnight seem cumbersome and security holed because it is so frequent repetition (26 times in a year).

    It should be recalculated yearly (52 weeks period and calculating at the 1st week of the coming year)) or ½ yearly (26 week period and calculating at the 27th week window) or quarterly (13 week period and calculating at the 14 week window).

    If Centerlink recalculates during the windows, less or more next pension amounts are paid, therefore it will be added or subtracted during the next period payments. Since most of pensioners can use online access to their accounts, this should be more convenient for Centerlink and pensioners as well.

    Also decreasing the reporting times may raise online security by reducing the accessing to Centerlink portals, and this lead to much less phishing, scams and keylogging, and bank accounts spying attempts where lurking especially old age pensioners computers, where their computer may not be well security protected.
    TREBOR
    7th Jun 2016
    5:38pm
    Yes - I've noticed that Colonel C'Link ALWAYS expects you to estimate your income BEFORE you are paid for it... and that leads to small errors either way - with the careful pensioner giving a little bit of cream to the Gus to be safe.

    The Good Colonel doesn't do an annual reconciliation and say "Oh - you overpaid us by $46 - so we owe you $23 back..."... but they sure as hell find any errors that favoured YOU.... they once slugged my ex for $60 they claimed they missed while I was working.
    TREBOR
    7th Jun 2016
    5:42pm
    .. AND .....(had to put that in at start of a sentence just to slight the university kid marker who said I couldn't do that even though the New England Journal of Medicine does).... when you work casual it often varies seasonally, so sometimes you earn a lot, and others you earn not so much. So an annual accounting and averaging would be more fair to me, anyway. I've had fortnights over Xmas when I earn $1300 - then over Winter $340.... I lose more for the good times than I gain from the lean times.
    Old Man
    7th Jun 2016
    4:15pm
    On the example given, the pension will be reduced by about $0.08¢ for each dollar earned. This is hardly a big deal.
    Jannie
    9th Jun 2016
    5:39pm
    Where did you get this info from??? It is 50 cents in the dollar.
    Roscoe
    8th Jun 2016
    11:45am
    Thanks Cat and Trebor for your replies.I should state that I am on a Disability pension and my Wife is on an Age pension. From what I understand, from you both, I am allowed,if single, $162 per f/n and in my case, a couple, I am allowed $288 per f/n in extra earnings before the gestapo step in, OR, if I am the only one of the couple to work am I restricted to $162 per f/n.
    Jeezaloo mate that's only three hours a week, whose going to employ someone for that?
    Cheers. Roscoe.
    Jannie
    9th Jun 2016
    5:46pm
    That is so true can only earn $250 per fortnight then they take 50 cents in the dollar then $ for $ so end up not getting any pension. At 70 still struggling to earn enough to get by. In my opinion the pollies are not aware or don't want to know what the real situation is for people living on a pension. Not like them getting ten times the amount we get for their pension. It is so unjust what is happening to the elderly. Society on the whole is breaking down, the crime rate has increased and there is no respect for the laws of our land.
    Jannie
    9th Jun 2016
    5:37pm
    Old man don't know where you get your info from .08 cents in dollar you state is not much to worry about, this is not true if you earn over $250 per fortnight you get penalised 50 cents in the dollar I am working 20 hours a fortnight and loose all of my pension. We have to work our guts out to earn an extra $100 per week it is not worth it. The system is against us and so complex.
    BonBon
    5th Dec 2016
    3:44pm
    Hi, I receive a DSS pension. I'd like to know how much income I can earn before pension affected. Thanks
    SheppartonMIss
    20th Feb 2017
    6:54pm
    The info for Work Bonus state: "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.'
    So does this mean I can earn money from being a Director and NOT be penalised via my (new) aged pension? Does it mean that if money paid to me is paid straight to Super is NOT counted and therefore me penalized for having it? Or, and most likely with my luck! Does it mean that I don't GET Work Bonus for such amounts so it is all income? I am totally confused.
    I don't have a lot of money or Super so being a woman who didn't get Super until late in life so every bit counts! HELP anyone, can you point me in the right direction as I am terrified of Centrelink and the immense power they exude to the little person - me.
    Cheers


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