Will casual work affect the Age Pension?

Will it pay Richard to keep on working?

Will casual work affect the Age Pension?

Richard has been offered some casual work but is unsure how this will affect his recent claim for the Age Pension? Will it pay him to keep on working?

Q. Richard

I am 66 and recently left full time employment. My wife, Barbara also 66, and I have applied for the Age Pension, however, since then I have been offered a casual role and it could last a month or several months. As yet I have not agreed to do the casual work as I am having real difficulty in getting an understanding of what effect this will have on the pension payment and associated benefits for the two of us.

A. Under pension reforms implemented by the Federal Government in 2009, those claiming the Age Pension can now continue to work and have part of their income excluded from assessment.

The Work Bonus means that the first $250 of any fortnightly income derived from work is excluded from assessment under the Age Pension income test, therefore you can have a couples’ income of $526 per fortnight before your Age Pension is affected.

Any unused portion of the excluded fortnightly $250 will accumulate in an ‘income bank’ up to a maximum annual amount of $6,500. This will benefit seasonal workers or those whose income varies from fortnight to fortnight.

If your income exceeds the couples’ income limit of $526 per fortnight, then your Age Pension is reduced by 50 cents in the dollar, for each dollar over this amount, until your income reaches $1. For example, if your income is $626, $100 over the income limit, then your Age Pension will be reduced by $50.

You can find out more by reading Will I be eligible for the work bonus?





    COMMENTS

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    Grey Voter
    23rd Aug 2013
    12:57pm
    Tha bove is a bit confusing........quote " If your income exceeds the couples’ income limit of $526 per fortnight, then your Age Pension is reduced by 50 cents in the dollar......." unquote.

    Why then does Debbie McTaggart's article in the same newsletter includes a table which says that the maximum a couple can earn before deductions is $278 per fortnight ?

    Clarifications anyone ?
    Janpeter
    31st Aug 2013
    7:28pm
    If you are Age Pension age, and receiving the Age Pension and working as an employee, then the work bonus applies to you, meaning that the first $250 per fortnight of your wages will not be counted as income. Each f/n you are on the age pension and do not work, a mythical $250 accrues in your work bonus "bank", up to a maximum "bank" amount of $6,500, this bank is then used when you do work to reduce the impact of your earnings on your rate of age pension.

    For example, Bill has been on the Age Pension for 12 mths, no work throughout this period so he has accrued the maximum work bonus bank amount of $6,500. He is offered some casual work, when he commences work as an employee, to work out how much of his wages will count as income for that f/n, CEntrelink needs to know his gross wages for the first f/n, ,say $2,000 they then apply that f/n's work bonus, reduce this amount by $250 leaving an amount of $1,750 they then look at the amount in his work bonus 'bank' and take that amount of the remaining wages. Based on his work bonus bank amount, Bill will have to earn $6,750 all up before his wages will affect his rate of pension. If this does not make sense, please post a specific question and I will answer it.

    The additional $256 amount Debbie mentioned in her answer is the income free area a couple have for income from any source, that amount is different to and in addition to the,Work Bonus.
    Kupsha
    8th Aug 2014
    2:37pm
    Janpeter
    My wife and I are both age pensioners and get 635 each per fortnight.
    I am looking at taking up regular part time work ad will get approx 1000 per fortnight.
    I understand this will affect my 635 pension, but how does it affect my wife?
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    12:31pm
    If you are Self employed, I'm a Civil Celebrant, any expenses incurred, Annual registration, insurance/membership of national association, Annual (mandatory) training, fuel, certificates, advertising: are not be considered so they come out of the allowance making it almost impossible to make a profit.
    I have other skills that I would like to use to supplement my pension but being `Self employed' makes it hard to profit.
    And being in a situation where I pay little tax (on the meager pension I get) I can't claim anything back!
    I'm sure there are many out there with life time high valued skills that can't use them; to me and them being self employed the `allowance' is a inadequate to profit after expenses are covered!


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