In December 2022, the government changed the maximum amount that you can build up in your Work Bonus balance from $7800 to $11,800.
It was introduced as a temporary measure, but on 1 January it became permanent. That means anyone eligible is able to earn an additional $4000 from work without it affecting their rate of pension.
So, who can get the Work Bonus, and how does it work?
If you receive the Age Pension, or you’re getting a Carer Payment or Disability Support Pension and you’re over Age Pension age, you can take advantage of the Work Bonus for employment income.
Work Bonus automatically exempts the first $300 per fortnight you earn from work – either wages or self-employment. It doesn’t apply to other sources of income like investment 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.
What does the 1 January change mean for pensioners over Age Pension age?
If you’re already on a pension, you won’t see any changes. Everyone already on a pension received the benefit of the $4000 one-off top-up from December 2022, either by an increase in their Work Bonus balance, or an increase in their rate of pension as their employment income used up the bonus balance top-up.
If you’re applying for a pension now, you will start with a Work Bonus balance of $4000 straight away. You used to start with a balance of $0 and would start accruing from there. If you start with a Work Bonus balance of $4000 that means you could start work straight away if you wanted to and you’d have to use up your bonus balance before your employment income affected your rate.
The nice thing about the Work Bonus and Work Bonus balance is that it’s all worked out automatically. You don’t need to do anything to take advantage of it, except report your income, as you are required to do. You can look at your existing Work Bonus balance by going online. Sign into your Centrelink online account, select Menu, then Payments and Claims. Select Manage payments, then My payments. You can then view your Work Bonus balance.
Do you claim the Work Bonus? Why not share your experience in the comments section below?
Also read: Explained: Centrelink advance payment