Call to bring in universal pension

A leading lobby group wants to put more money in your pocket by reforming the Work Bonus scheme.

National Seniors Australia (NSA) is pushing for more money for the Work Bonus scheme after Opposition Leader Peter Dutton came out in support of increasing the amount age pensioners can earn under the scheme. 

Mr Dutton said a LNP government would double the amount of income age pensioners and veteran service pensioners could earn without reducing their payments. 

“Employers can’t find staff – thousands of jobs across hospitality, agriculture, tourism and retail remain open,” Mr Dutton said.

“This policy ensures that pensioners and veterans, who want to work, are not financially penalised. It puts more money into their pocket.

“There are around 80,000 age pensioners and veterans who are choosing to work who will likely benefit from this change,” Mr Dutton said.

Work Bonus explained

The Work Bonus reduces the amount of your eligible income included in the income test.

Under current rules, the Work Bonus automatically exempts the first $300 per fortnight you can earn from work. 

Any unused portion of the excluded fortnightly $300 will accumulate in an ‘income bank’ up to a maximum amount of $7800. 

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.

The consequence of both the fact that individuals can earn up to $174 per fortnight without affecting their pension plus the $300 Work Bonus is that age pensioners can regularly earn up to $12,324 per annum without it affecting their pension, and potentially more in a particular year if they have an Income bank to draw on.

Broken system

NSA welcomes Mr Dutton’s proposal as a step in the right direction but wants the policy to go further. 

NSA says the pension system is “broken” because it unfairly penalises people who want to work by throwing up complicated administrative roadblocks. 

“What we know is that those pensioners who work often keep working long after retirement. Why? Because they need to,” said NSA’s Brett Debritz.  

“Unfortunately, by making the increase a one-off bonus, this has added more complexity to the system, leaving older workers confused and worried about breaching the limits and incurring a debt to Centrelink.”

NSA is calling for a universal pension to simplify the system. It says this would scrap the need for the income test and wealthy people would be removed from the system by the assets test.

Scrap the income test

NSA says scrapping the income test and replacing it with a universal pension will encourage more older people to stay in the workforce, but only those without significant savings, because the assets test will still lift the amount of pension they receive.  

“Gone will be the need for deeming rates, gone will be the need to report earnings to Centrelink. All you will have to do is report your savings and investments as you do already, and the system will be simpler,” Mr Debritz said.  

What do you think of a universal pension? Why not share your opinion in the comments section below?

Also read: What are the new Work Bonus rules and how do they apply

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 am currently receiving a full Age Pension, but also work 6 hours per week in paid employment, partly for the social interaction, but also to force me to get out of bed Monday mornings! We are in the fortunate position of owning our own home, so no rent or mortgage payments (and it has only taken us 43 years to get to that stage!)
    I like the idea of removing the income test, and making the Age Pension universal, but included in your taxable income. If the Pension is regarded as purely a safety net for those who didn’t (or couldn’t) accumulate enough to live on, there is no incentive to save for retirement. If everyone gets it regardless, then those on high incomes give half of it back in tax, which funds more pensions.
    Not sure what we do with all the Centrelink staff who would no longer be needed to monitor incomes and assess deeming rates. Maybe re-train them as aged-care workers and baristas?

  2. The present aged pension is the most cumbersome, complex, problematical and misery making system that could ever be devised by Government. A system which is very difficult to understand, which defeats pensioners who attempt to fill in an online application to receive it , then takes over 6 months very often to get approved after endless requests for further information; a system which is not transparent and keeps on asking you to update this that and the other; a system where the payment can vary from fortnight to fortnight depending on what you might have earned in any particular period; a system in which the administrative burden placed on Centrelink staff is enormous, in which the frustration felt by so many of aged pension recipients is acute and made worse by the worry many feel that one day they will be presented with a backdated bill they cannot afford and for reasons they cannot understand. I have always found the Centrelink staff helpful when I have contacted them. The problem does not lie with them. It is the system itself. It is a national disgrace and in desperate need of a complete rethink. The amount of money that would be saved by simplifying the system would probably release enough money to pay all pensioners a reasonable pension without all of the administrative nonsense which accompanies the present system.

  3. John Byrne has beautifully set out a clear summary of the difficulties that many of that work, have to contend with. The complex nature of calculations which have to be made every fortnight, is definitely in need of a major overhaul. Whilst it is likely that much of this might be carried out by computer systems, there must be manpower involved somewhere. If a re-work allowed staff to be released from this function, there is no doubt that they could be usefully used in assisting other people with their queries, on a more-timely basis than at present. With the present system, anybody whose income exceeds the fortnightly limits, can incur a double penalty – not only is the income assessed on a gross basis for pension purposes, resulting in a pension reduction, but those of us in that position will invariably will have incurred another loss of that income because it will have been subject to PAYG. By the way, I am not against paying tax on my earnings, but the fact that CentreLink income is assessed on gross earnings, instead of after-tax earnings, seems to be quite unjust. It seems to me that it would not take much to incorporate a notional tax on those earnings which could then reduce our gross earnings by that amount.

  4. Make the age pension universal. Maybe keep the assets test but remove the income test.
    The pension is already taxable so nothing to change there other than possibly raise the tax free threshold for everyone.
    In other words simplify it all and make it fairer.

  5. At age 69, I returned to work a small casual 10 hours a week job which I enjoy. I’m now 72. But the paltry amount I am allowed to earn per fortnight, before affecting my pension, is unfair. I had to laugh when I saw on the news last night, where they want to pay 17 year olds, in their first job, the same rate as a mature age 40yo, who’s been doing the job for 20 years. A young one said ‘we have the same cost of living struggles as others’. Hello! – pensioners have the same cost of living costs, and we can’t get a reasonable income! My house insurance wanted an increase of 46% – car insurance wanted 102%! Obviously shopped elsewhere, but still, increases were over 25%.
    My boss is very happy with my work, wants to keep me – but if he gives me a $20 a week pay rise, my pension is reduced $10. Plus if my gets too high, I have to pay tax on it.
    The whole system is so confusing, and complicated. On the other hand, you see the absolute rorting of the NDIS, which seniors are bared from. Only this morning, ABC news was saying there are over 50,000 seniors waiting to be assessed for the Aged Care package. The whole system is skewered.

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