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 [email protected] and we’ll do our best to answer it, or find someone who can.

Written by Janelle Ward


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