Glenny is a little bit confused about how the income test applies to couples.
My husband and I are renting and we don’t have many assets. However, we are a bit confused about how the income test works. Are we both allowed to earn $308 per fortnight before our full pension rate is reduced, or are we only able to earn that much combined? I work on a casual basis, sometimes earning nothing and sometimes as much as $600 a fortnight. My husband is in the same boat. Is the reduced rate applied straightaway if we go over this threshold?
A. First, it is important to note that because you are both earning income from employment, you will both be eligible for the Work Bonus.
The Work Bonus provides a concession for employment income for all workers who earn money after turning Age Pension age. This means the first $300 of an individual's earnings will not count as income under the income test.
This doubles for couples where both are working – both parties may have the first $300 per fortnight of their own employment income not counted.
If your employment is seasonal or sporadic, you can ‘bank’ your Work Bonus allowance, to a maximum of $7800, which can then be applied when required.
After the Work Bonus is applied to both your and your husband’s income, however, the income test thresholds that you quote are indeed the combined figure.
Exceeding the fortnightly income limit for a couple ($308) will see your pension reduced by 50 cents for every $1 over the limit.
Because your income fluctuates, you will need to report your income fortnightly and the reduced pension will be applied for the fortnights that you exceed the income test limit.
Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need.
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