UPDATED: Older Australians will be able to work more without impacting their Age Pension payments from tomorrow, potentially meaning more money in their pockets.
On 1 December, eligible age pensioners will have $4000 credited to their Work Bonus Income Bank balance, which will take the maximum work bonus balance from $7800 to $11,800.
Pensioners will have until 31 December 2023 – after the measure was initially put in place only until the end of this financial year – to make use of this balance to offset employment income.
Eligible pensioners include those on the Age Pension, as well as people over Age Pension age who are receiving the Disability Support Pension, Carer Payment or the Veterans Entitlement Act Pension.
How the Work Bonus works
Under the Work Bonus scheme, pensioners are able to earn up to $300 each fortnight without that pay impacting their Age Pension payments.
If they earn less than $300 in a fortnight, the difference can be banked in what’s known as the Work Bonus Income Bank, and used at a later date.
If they earn more than $300 in a fortnight, their Age Pension payment is reduced by 50 cents in the dollar.
Read: What is the Work Bonus?
National Seniors explains that the change to the limit means a single pensioner with no savings could earn up to $17,000 without impacting their pension and a couple as much as $32,000 (if both work part time up to the limit).
The move is aimed at boosting workforce participation among older Australians in the face of nationwide worker shortages.
Social services minister Amanda Rishworth says it’s important that pensioners have the choice to work, should they wish to do so.
Read: How Australia’s retirement system is failing older Australians
“We’ve listened and we’re now seeking to extend the measure for 12 months to ensure people have time to use it,” she says.
“The Albanese government is committed to improving the lives of all Australians – including older Australians – and, importantly, providing choice.”
The extension has been applauded by the Australian Retailers Association (ARA), with CEO Paul Zahra saying it solves two problems at once, namely, the worker shortage and rising living costs for pensioners.
Read: Are you eligible for the disaster recovery payment?
“This scheme is a win all round. It allows pensioners to supplement their income, work extra hours if they wish, and help businesses plug some of the gaps in their workforce,” he said.
“Retail is confronting a labour and skills crisis. There are more than 46,000 retail job vacancies with the ongoing effects of COVID-19 and skills shortages leading to the tightened labour market.”
The extension also received a ringing endorsement from National Seniors chief advocate Ian Henschke, who says the increased Work Bonus provides older Australians with more options when it comes to their retirement income.
“According to the ABS, there are almost half a million job vacancies across Australia. More than 74,000 are in health, aged care, disability and childcare,” he says.
“This move means people reaching pension age over the next year will have a good reason to stay in the workforce.
“We encourage pensioners to take up the offer, and for government to publicise it.
“It [the extension] shows you can improve people’s lives without blowing the budget.”
Note: YourLifeChoices has sought clarification on Mr Henschke’s comments from Services Australia and National Seniors.
Do you work and receive the Age Pension? Will the Work Bonus extension make a difference to your planned working hours? Or are you now more likely to seek employment? Let us know in the comments section below.
If they also extended the scheme to DSP recipients too it would be better. At the moment there is no incentive at all for older DSP people in particular to seek work. I tried for a while, working 2 days per week, but they added on my regular monthly Super drawdown as income onto what I was earning and taxed the whole lot at 50c in the dollar for every dollar over the $180 per fortnight we’re allowed to earn. How is that fair or encouragement for people to try and seek some work? I’d love to try and work for 1 to 2days days a week to supplement my living costs but there’s no real benefit to doing so. The DSP pensioner who abused Morrison over this issue during the election campaign certainly went about it the wrong way but in the end what he was saying is right
Hi fellow pensioners does anyone know anything about the recent news comments regarding $175 power bonus for Queensland pensioners? Many thanks if you can help I would appreciate it.
Vivien – yes. This should be on your latest power bill. I received my latest power bill 3 weeks ago – the $175 was clearly noted on that. Not knowing when your last bill was received, as one might be just due. But check.
I fail to see how this extension of time enables an age pensioner to earn $17,000 before our pension is reduced by the punitive 50c in the dollar. I am 73 and work as a Disability Support Worker and usually earn between $1500 and $2000 per fortnight. My work bonus bank has all been used up many years ago and is currently $300, because every fortnight I am credited with another allocation of $300. My understanding is that on the 1st December 2022 the work bonus limit will be increased by $4000 and that on my first income reporting date in December my work bonus credit will therefore be $4300 and any income that I report in future income reporting periods will be deducted from this amount until the bonus is exhausted, which in my case will happen very quickly given the amount I earn and the extra $4000 will probably have been used by the end of February 2022. In my case I can’t see how extending the use by date to the end of the 2023 calendar year helps me or others in my situation at all, and if you think I can earn up to $17,000 not $11,800 please tell me how, because I can’t see it and the information you are providing is very misleading. It would be far more beneficial and effective to all age pensioners if we had NO income restrictions , NO reporting requirement and NO reduction of our pension by 50 cents in the dollar once we exceed the statutory limit as proscribed in the work bonus amount.. The current arrangements are extremely unfair and do not provide any sensible or realistic encouragement or incentivization to work. They also demonstrate age discrimination in action and we should all be raising our collective voices to help abolish these arrangements. Please just leave our pensions intact, don’t penalise us for wanting to work and just tax us on our total taxable income. Sounds fair and reasonable to me and it would help our families, our community and our economy enormously.
Thanks for your comment Simon. We have reached out to National Seniors for clarification on their comment. Will update once they respond.
You are absolutely right Simon, that is why very few pensioners work full time as they forfeit their pensions. Silly situation. Why not make the pension universal and tax pensioners who want to work for as many hours as they want at the marginal tax rate on their income. Simple but may put a few Centrelink employees out of work.
My previous comment regarding exhausting the increased Work bonus limit should read February 2023 not February 2022.
Just goes to show how stupid this Government is!!
If they extend the Work Bonus until December 2023 – that ONLY gives you 6 months of the next financial year bonus!!
I am not sure that they understand that “A Financial Year” goes from 1st July 2022 – 30th June 2023?
So – if I earn $11,000 this year through until the 30th June 2023 – I CAN ONLY EARN $5,500 until 31st December 2023. OR – can I work extra hard and earn the $11,000 in just 6 months – OR – will I be penalised AGAIN???
No wonder our Pensioner System is a mess!!
Yes Peter, make it as complicated as possible. Typical bureaucratic approach because very few politicians have ever worked outside of politics and have never had to worry about a pension.
Again!
Always about getting Age pensioners and DSP recipients back out into the workforce. Good for those who have the ability to do so but not helpful to age pensioners and DSP recipients who are incapable of working due to chronic ill health or severe disability.
As for the ‘twice yearly indexation’ of pensions, it is always paid in arrears as the CPI and other determining factors only relate to the previous 6-12 months increase in the cost of living, leaving pension recipients further lagging below the poverty line.
I also find it interesting that landlords keep tabs of pension recipient renters and the amounts they receive. As soon as there’s any increase in the pension they make a grab to increase their rents.
Supposedly if you pay more than 1/3rd of your pension or welfare benefit in rent you are eligible for rent assistance but, what if your rent chews up 50% of your payment and then you have utilities and medical bills etc.
Just recently I was informed that my local primary care unit is scrapping bulk billing and will be charging ‘full fee service’ which I can’t afford. I’m looking for another doctor who still bulk bills and this will be the third doctor I will have been looking for in the past 12 months. All deeming the cost of living and insufficient payments from the government as being the cause.
Should have kept the old Pensioner Bonus Scheme. That made it worthwhile. They cancelled it saying not many people took it up – that was because Centrelink staff hardly ever mentioned it. I worked as pay officer for a large employer, and I would speak to any worker approaching age 65 (and wanting to stay working) about it. Hardly anyone knew about it, but they were grateful of the info. My brother signed up for it, he said it was a life changer.
If this such a good idea, why is the work bonus still so low?
It’s pauper’s pay.
Why Australia has not moved to the New Zealand model is beyond me. We work hard and long hours for our superannuation and pension. Basically we should be allowed to earn as much as we are capable of doing so and be taxed at the normal rate without it affecting superannuation/pension..
As a 74 year old pensioner who together with my husband has worked until early retirement age while raising a family, initially on one wage and then for many years on two, I find it difficult to see why so many pensioners need to work after retirement age. We were on ordinary wages, not professional and managed to pay off our home, give the kids the best education and life possible on these wages and do not need to work now. The GFC took a great deal of our savings however we still managed to have holidays during and after retirement. My gripe is with those people who through their own choice decided that they would not work and would rely on those who did and paid taxes, to give them a lifestyle they should not be entitled to. If the government whether Liberal or Labor would divide the available pension funds more in favour of those who paid the taxes in the first place those of us who worked with the right attitude should be better off. I’m afraid I do not understand all this financial stuff like a lot of people and just wish that a simpler system could be devised instead of the high faluting garbage we are fed.