Many Seniors have seen their retirement savings take a hit over the last few months and interest rates are extremely low for those with money in bank deposits. While Seniors are quite rightly focused on their health and safety right now some are also looking for ways to supplement their income. In this article, we outline how the Work Bonus can help Seniors make the most of any additional paid work they do without affecting their Age Pension entitlements. So how does it work?
The Work Bonus applies to anyone who is receiving the Age Pension and works for an employer on a part time, casual or seasonal basis. It also applies to those who are self employed if they meet the active employment participation requirements. The good news is that you don’t have to apply for the Work Bonus, it is automatically applied when you tell Centrelink that you are receiving an income.
What is the ‘Pensioner Work Bonus’?
The Government offers Seniors on the Age Pension an incentive to continue working. The Work Bonus works like a credit account, called your “Work Bonus balance”. Under the current rules, every fortnight $300 is added to a pensioner’s work bonus balance. This means that you can earn $300 in employment income every fortnight (up to $7800 per year) without it counting towards your assessable income. As soon as you apply for the Age Pension the work bonus is automatically added to your account. For couples, the incentive doubles if both are working.
The even better news is that Work Bonus operates in addition to the pension income test free area. From 1 July 2019, for single pensioners, the pension income test free area is $174 a fortnight and for couples combined, it is $308 a fortnight. So depending on your other assets and income you could earn even more before you Age Pension entitlements are impacted
Will it work for you?
Whether or not the Pensioner Work Bonus will work for you will largely depend on how you feel about working in your retirement. If you are someone who likes to ‘keep busy’, or someone who needs the extra income, the work bonus means you can earn more before losing Age Pension entitlements.
On the other hand, if you’re a pensioner who doesn’t work, or you are uncomfortable seeking work in the current Covid 19 environment then this initiative won’t help you right now. But, it’s good to know in the event that your circumstances change..