A reader who will become eligible for the Age Pension this year wants to know if he would qualify for any payments despite the fact that he needs to keep working.
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Q. Terry
I reach Age Pension age this year but intend to keep working fully for a couple of years yet. I have to because I have very little super savings.
I’m casually employed and am paid weekly, so is there any point in making a claim (knowing) that it’s likely to be denied for payment as there might be weeks when earnings are zero?
Equally, I’d qualify for the Commonwealth Seniors Health Card in some weeks but not others.
A. Without knowing how much Terry earns, the good news is it’s still possible to apply and be eligible for the Age Pension and Commonwealth Seniors Health Card if you are of Age Pension age and still working.
Depending on your income, you may be covered by the Work Bonus, a scheme that reduces the amount of your eligible income included in the income test.
The Work Bonus automatically exempts the first $300 per fortnight you earn from work – either wages or self-employment. It doesn’t apply to passive sources of income such as investment income or rental income.
Every fortnight you aren’t working, or have been paid less than $300 from work, you are contributing to your Work Bonus balance. This balance can grow until it reaches the maximum of $11,800. So if your Work Bonus balance is $0, it will take 40 fortnights with no employment income until your bonus reaches the new permanent maximum of $11,800.
If you are working, any Work Bonus eligible income over $300 in a fortnight will reduce any Work Bonus balance you may have before the income starts to reduce your pension. The excess income won’t affect your pension rate until your Work Bonus balance is used up.
The Work Bonus operates in addition to the pension income-free area, which is currently $204 a fortnight for single pensioners and $360 a fortnight for couples combined.
The good thing about the Work Bonus is that you don’t need to apply for it. Centrelink will apply the Work Bonus to your eligible income if you meet all the eligibility requirements. All you need to do is declare your income.
You can declare your income through your Centrelink account at myGov. You can also see your Work Bonus balance at the same location.
As for the Commonwealth Seniors Health Card, Centrelink only applies the income test to check if you are eligible.
To be eligible you must earn less than the annual current limits, which are:
- $95,400 a year if you’re single
- $152,640 a year for couples
- $190,800 a year for couples separated by illness, respite care or prison.
Do you work and claim the pension? Was it easy to apply for the Work Bonus scheme? We’d love to hear about your experience in the comments section below?
Also read: Am I eligible for the downsizer scheme?
I still work & claim the pension. As stated above I can get $504 p/f without affecting my pension, which now means I can only work 2 days a f/n. My gross is slightly over so it does reduce a little. I was working more but had to reduce my days as I lost 50c in the dollar over. We should be able to work more & still get the pension – I am 69 & am still healthy. I work in aged care. I need to work to help financially.
I constantly hear about ‘pensioners being able to earn $11,800 a year’. This was stated on a recent TV show giving advice for pensioners. This is NOT true. The maximum your work bonus bank can have is $11,800. BUT – you can still only earn $7,800 per year. I work the same 10 hours each week, and when I started, I got the full work bonus of $11,800. But that has been exhausted, so now I can only earn $300 per fortnight. I’m 72, I would happily work an extra day, but not going to as there is no incentive. I have a good boss, pays me well, but again, if I get a pay rise, it will disadvantage me.
There is a big difference between ‘maximum amount of work bonus bank’ and ‘amount you can earn’. We should be able to work as many hours as we – and the boss – want.