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.
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“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.