Centrelink Q&A: How to work without losing pension

Changes in 2019 will help pensioners like Rod continue to work.

How to work without losing pension

Rod is almost 70 and self-employed, and wants to know if he can continue to operate his business without causing a reduction in his Age Pension.

Q. Rod
I am 70 next year and I’m in the process of retiring, but not completely. My wife and I have about $390,000 in assets. We have run our own business from home for a few years now, but I have been scaling it down and we are receiving a part Age Pension. We are making about $10,000 per annum after expenses and hopefully this will continue for another five years. Can this income be counted in the Work Bonus scheme? Or am I better to just get a job and earn $6500 as allowed? It seems to me the Government wants pensioners to stay poor. We own our house and need about $50,000 a year to live a pretty basic existence. I am still fit enough to make a bit of extra money, but if I do my pension will be reduced.

A. The Government’s More Choices for a Longer Life package delivered in the 2018 Federal Budget has several measures that can help, including assistance for those who are self-employed for the first time.

The Pension Work Bonus will be expanded from 1 July 2019 with $300 per fortnight to be excluded from the income test instead of $250. And, for the first time, it will be extended to include earnings from self-employment. A pensioner will be able to earn $7800 per year through self-employment without an impact on his or her Age Pension.

This is in addition to the income free area, which is currently $300 a fortnight (combined) for a pensioner couple.

Pensioners will also continue to accrue unused amounts of the fortnightly Work Bonus, which can exempt future earnings from the pension income test. The maximum accrual amount will increase to $7800.

A homeowner couple can have combined assets of $387,500 before their pension eligibility is reduced.

For further information, you may also wish to speak to a Centrelink Financial Information Service officer.

If you have a Centrelink question, send it to newsletters@yourlifechoices.com.au and we’ll do our best to answer it, or find someone who can.

Are you eligible for an Age Pension? Do you know your rights? RetirePlanner™ tool has all the information you need.


    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.


    To make a comment, please register or login
    24th Sep 2018
    The treatment of Pensioners by our federal government is a disgrace.
    Pensioners are treated like second-rate citizens, and deliberately so. Just look at Centrelink's treatment of them, and the lousy pension rates provided. Yes, they do want pensioners to remain poor.
    But there is hope if we can get a political party which espouses the best interests of pensioners and retirees. We need a strong voice in parliament.
    Old Geezer
    24th Sep 2018
    Pensioners are treated very well by the government compared to self funded retirees. If you cant live on the pension then you are living way beyond your means.
    24th Sep 2018
    I agree with Thommo. The Lieberals want everybody to be poor except for their big business mates and the rich.
    24th Sep 2018
    OG, we all know you're a Lieberal Party shill. Give it a rest.
    Old Geezer
    24th Sep 2018
    Yes right so why do I not vote?
    24th Sep 2018
    I totally agree with Rod when he says the 'Government wants pensioners to stay poor'.

    And don't get too excited about being able to earn that bit extra - any amount earned, plus your pension, is then taxed! So if (working on being a single) you were to get a job just earning the $250 per fortnight, you would lose $87 per fortnight in tax. Makes you clearing $81 a week. I can do that in one afternoon minding a local sick kid or doing some dog walking. No fighting traffic, using petrol - and no fortnightly reporting to CL.
    Know which way I prefer to go...
    24th Sep 2018
    Actually there are many tax incentives eg SAPTO which makes working more attractive to people of pensione age. The inequity is the fact that the tax incentives and work bonus only apply to the person of age pension age and not the partner who may be younger. Yet the pensioner is only eligible for half a couples pension. I realise that the person working, as part of a couple, can earn more without "losing" but there is no incentive for the partner to work. System is totally ridiculous and needs to be simplified - universal age pension at pension age with normal tax rates applicable to any other income. No "couples" pension or "single" pension. No incentives for working. No tax incentives. Just purely having the incentive of being financially better off by working ( or saving for retirement )
    24th Sep 2018
    old geezer was a politician!!!!
    Old Geezer
    25th Sep 2018
    Not in this life he wasn't.
    24th Sep 2018
    Now is the time for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.


    Please help yourself and others today and every day, pass this demand on to all government, opposition and independent MPs and senators who could help us to get a fair deal on pensions
    24th Sep 2018
    I totally agree. My demented Mum, in aged care, has no pension because a block of land, with a 50 year old house on it has escalated in value to a ridiculous amount.
    8th Oct 2018
    Agree with Graycomputing. However how do we progress this ?
    "NO ASSET TEST FOR A PENSION EVER AGAIN! - Help scrap it now"
    Is voting for Seniors United Party a step in the right direction ?
    24th Sep 2018
    I fully agree with Rod, thommo, sunnyOz & Thoughful. But here's the
    " OUCH " Salt Rub. It's not entirely Centrelink's fault; they are just the Government stooges forced to implement departmental rules
    " we the people " must obey.

    It's the Politicians & Treasury Buffoons who screw the (hard-working, tax-paying masses), then pat themselves on the back & pay themselves outrageously exorbitant salary + fringe benefit packages for . . . . wait for it . . . { Saving the Government Money } by persecuting/penalising the little guy n gal who are just trying to make ends meet & to enjoy a modest, but decent meal on the evening table each night.

    Old Geezer! Your comments on the difference between OAP recipients & self-funded retirees is ludicrous. Sounds very much like you're one of the latter, & doing quite ok for yourself " thank you very much ".
    Go ahead, I dare/challenge you to strictly limit yourself for a full financial year to spend " only " the fortnightly OAP amount & discover " what it's really like " during Winter's freeze or Summer's furnace . . . . just because you can't afford to pay your utility bills.

    Federal Governments ( way past & incumbent ) are indeed an obscenely disgraceful circus. A " generous universal income pension & six monthly - very generously CPI applied increases " should be the rule, not the exception. Also, there shouldn't be any penalties whatsoever imposed on a pensioner ( single or couple )when they are paid, as a sideline for any " services rendered " just because they can put their mind, life-experience & muscle to it, to keep themselves healthy, active & contributing to community.
    Old Geezer
    24th Sep 2018
    I actually spend a lot less than the old age pension every year and have been doing so for many years now. My biggest bill per month is my internet bill and it has just been reduced even further thanks to a friendly chat with Telstra. I now pay less than half on the NBN than I did on my old service. Utility bills are low summer and winter with water costing more than electricity even though I use tank water for the garden. We spend less than $100 a week on food and groceries and live very well in proper food. All I can say is that pensioners must waster an awful lot of money if they can't live on it.
    30th Sep 2018
    OG, maybe you could spend a little time passing on your knowledge of how to live cheaply to others, that would be more useful than you just keep telling us that you live well cheaply.
    24th Sep 2018
    O.G yes i agree self funded retirees are treated very unfairly by the the Federal Government we have in power at this time.
    Old Geezer
    24th Sep 2018
    Labor is about to unleash even worse punishment for self funded retirees.
    25th Sep 2018
    Big surprise for me today to find my Rent Assistance has been Reduced, effective from 20 September. I met with staff at Centrelink today to find out why and also to find out if I had been over paid for RENT ASSISTANCE. The staff don't have the latest information on how Rent Assistance is calculated, yet they were sure I don't have to refund any Rent Assistance already paid! It seems the new payment algorithm used by Centrelink rounds DOWN to the nearest dollar. I am sure OG will spit in his beer if it happens to him?
    Old Geezer
    30th Sep 2018
    No I wont spit in my beer as I don't get rent assistance. In fact I get no assistance what so ever from the taxpayers.
    30th Sep 2018
    Rent assistance is supposed to be going up not down.
    30th Sep 2018
    Don't see how this guy can get a job at 70, not much advice here given by comments either.
    30th Sep 2018
    Old Geezer, you definitely get some sort of Tax payer assistance, your not looking hard enough.
    2nd Dec 2018
    Anyone who thinks Labor will be good for old age pensioners will get a shock. When billy stabs us in the back..

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