From July 2019, an increase to the Pension Work Bonus will allow age pensioners to earn up to an extra $50 per fortnight – or an additional $1300 per annum – without reducing their existing Age Pension entitlement.
Currently, the work bonus means a pensioner can earn up to $250 per fortnight, but this will increase to $300 per fortnight. In effect, the first $300 of income earned each fortnight from work will not count towards the pension income test.
This is in addition to the income-free area (currently $168 a fortnight for singles and $300 combined for couples). Effectively, a single person with no other income will now be able to earn up to $468 a fortnight from work and still receive the maximum Age Pension.
A ‘personal exertion’ test will be applied to ensure the earnings are from work, and not from financial or real estate investments.
This increased bonus also applies to older Australians who are self-employed. They, too, will be able to earn up to $300 per fortnight, or $7800 a year, without a reduction in their pension entitlements.
The Government projects that 88,000 pensioners will benefit from this change at a cost of $227 million to the Budget over the forward estimates (ie: the next four years).
Will the change entice you back into work? Or into extra work?