Can I replace my paid work with a part pension?

A YourLifeChoices member wants to know if she can cut her paid working hours and replace it with a part Age Pension. She also has some leave entitlements owing and wants to know if that would affect her payments.


Q. Pauline

I am thinking of reducing my full-time job to three days a week and applying for a part Age Pension two days a week. 

Because I have long service leave, will this impact my receiving the pension?

A. The immediate question here is about long service leave, but first we need to clear up the member’s eligibility for the Age Pension, or a part Age Pension in this case.

Pauline wants to automatically replace her income by dropping back from full-time work and replacing that with a part pension. But it’s not that simple.

Without knowing how much she earns, it’s impossible to say if she would be eligible for even a part pension.

Centrelink won’t just hand over money if you want to keep your income but work less. It expects you to jump two major hurdles for the Age Pension called the assets test and the income test.

In this case, the member’s concerns will obviously be associated with the income test, but the assets test may also come into play.

Assuming the member is single, under the Age Pension income test she will be able to earn up to $190 a fortnight, and if you earn anything over that you will be given a lower pension a part pension if you are eligible.

Work bonus

Currently, temporary changes to the Work Bonus scheme mean pensioners can earn up to $490 a fortnight, but those changes end on 31 December.

Even if she is eligible for payments under the income test, she will also have to declare many of her assets including vehicles and furniture under the assets test, which may lower her pension even further.

As for her concerns about her long service leave, according to the Department of Social Security, if she does successfully apply for a part pension while she is still in employment she will have to notify Centrelink of any payments for leave, as this is considered extra income.

The only exception to this rule is that long service leave pay is not included in the income test if it is paid when you stop work as part of your departure package.

For more accurate advice, we suggest Pauline contacts Centrelink’s Financial Information Service here.

Are you working and on a part pension? Was it hard to apply? Why not share your experience in the comments section below?

Also read: Do I have to tell Centrelink about my superannuation?

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Jan Fisher
Jan Fisher
Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.


  1. I have always wondered why my vehicle, my, non-income producing, private transport that costs thousands of dollars per year to Register, Insure, Maintain and Run, and also suffers from Depreciation, can adversely affect the amount of Part Pension that I receive.

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