work-bonus-increase-for-age-pensioners
Work bonus change for retirees
Last week’s Jobs and Skills Summit produced 36 concrete actions to reduce Australian workforce and skill shortages. The one of most interest to older Australians is the change in the rules on income and the Age Pension. The new measure means Age Pensioners can now earn an extra $4000 per annum before their pension entitlement is affected.
The current work bonus is $7800 (or $300 per fortnight). This will move to $11,800 during this financial year. This change will cost the Federal Government approximately $55 million.
In announcing the new bonus the Prime Minister Anthony Albanese noted that older Australians could now make a ‘greater contribution’.
With fewer than 10% of current Age Pensioners working, there is obviously scope for many to work a few more hours or to retrain. Many lobby groups including National Seniors Australia have been working hard for this increase. The previous limit of $7800 really only allowed Age Pensioners to earn a token amount, which was hardly ever likely to foster meaningful engagement in the workplace.
And then there is the argument that when there were very few jobs there was no need to encourage Age Pensioners to work more, so pension payments were penalised. But now that there is a critical skills shortage, older Australians should head straight back out of retirement to suit the needs of the nation.
It’s a lively discussion and we are interested in your views.
How will this affect your household?
Is it a welcome initiative?
Or are you a little cynical that your skills are suddenly in hot demand?
The full details on the timing and application of this new work bonus are yet to be revealed. Keep an eye on your inbox as we will update you as soon as any clarification on this ‘time-limited’ change emerge.
What a load of rubbish $30 a week rise is just a CPI rise not some extra bonus. As for $4000 pa work allowance that only equates to a couple of hours a week get real
I turn 74 this month, and have finally resigned. I’m looking forward to catching up with RE to figure out where I go next. I don’t want more than 2 days a week work now though, I’m tired.
There do seem to be quite a few part time jobs available to me, however, so there may be some options. I leave work on 16.9.22 and will be in contact. Yaaayy
My email address is now not my work one.
If the Govt and more generally the business sector want to encourage pensioners to consider and participate in addressing some of the workers shortage, they need to be more serious about the additional amount they can earn. $4000 extra won’t achieve that.
In the short term, a more realistic figure needs to be provided
I am on the age pension and I am also a sole trader.
Do I report the income that I earn on a monthly basis or a Yearly basis?
Do I report the gross income or do I report my profit loss income? (gross minus expenses)
How will allowing us to earn more cost the government anything?
If we were allowed to earn as much as we liked – and still pay income tax – then there wouldn’t be a shortage of workers, and the government would get the extra tax income – it seems to me that it would benefit the government as they would be able to free up the Centrelink poeople who currently look after us, to chase welfare cheats..
Why will it cost the government $55 million to allow pensioners to work more? More work equals more tax.
Every little bits helps, let’s hope it stays in place next and subsequent financial years
When will Centrelink start to apply the new higher earnings limit? If I start at once to work extra hours which take me over $7,800 p.a. but stay within the $11,800 p.a. limit, will Centrelink reduce my fortnightly pension amount by 50 cents for every dollar I earn over $300, or will it stay the same?
Hi Rose. We are still waiting on details of the start data for the additional work bonus. We will let readers know as soon as we find out more.
Regards
Great initiative, to be honest, we will be a lot better than before, we can not be ungrateful, we waited for ten years
will the extra income allowance come into play for pensioners who have a defined benefit pension?
Hi Ronald. These allowances affect employment income and how it is treated for the Age Pension income test.
The rules around how much you can work are absurdly stressful for older people. We largely ‘retired’ just a few months ago at the ages of 74 and 71. As migrants who came over 20 years ago, it has taken my husband and I years to get to a point where we feel we can retire without going bankrupt.
I have taken on some contract work, but feel highly stressed about the implications for our government pension. Will we be penalised? Will we be asked to pay back money. Meanwhile our own pension fund has plummeted due to economic conditions. But the government does not automatically adjust for that fall.
I fully retired at the end of June 2022 and is now claiming the full single pension my old work place would have me back tomorrow due to staff shortages . Now i could go back and do at least 5 hours per week to help out this would be well below the amount that i could earn and not affect my full pension do you still have to advise Centrelink that you are doing the above hours i would not be looking at this untill January 2023 which is there busy time.
My employer wants me to work longer hours, I wanted only 15- 20 hours a week, to have minimal penalties on my pension ( I am 74) I get called in at short notice as young staff take sickies at no notice. I don’t miss dead lines, and are always generous on opening and closing hours. Now working 42 a week and losing hugely to penalties.
This paltry increase to penalty allowance will still rob me of much of my pension, I am forced now to go back to my employer and reduce my hours. His business will suffer and I know he will be be mightily P.ssed of
What a joke – $11,800 equates to approximately 2 five hours shifts a week at the minimum wage rate ($21.38) – how many jobs are out there or employers who want an employee on their books for that little return? This is not encouragement.
this increase won’t really help much, an extra $20 a week; an extra $4000 a year allowed if you want to work a little! The people at the recent jobs summit should have taken a trip to the supermarket and look at the rises in cost of food. Not to mention the 22cents per litre that will be added to the a litre of fuel later this month. Not to mention electricity and gas prices increasing.
l’m 77 years old working as a registered nurse, I would like to retire but I see the pension as a survival option only. I guess I’ll just have to keep going at the moment.
Is the total new earnings of $11,800 pre tax or after tax?
Does the new $11,800 work bonus level only apply for this financial year or is it ongoing ?
Hi John. We are still waiting on the full details on how this will work however at this stage it looks like it will be a one off for this financial year
So interested pensioners need to find a job that that they will need to leave at the end of the financial year when the incentive ceases to apply .
How can a worthwhile employer rely on an individual for medium term support knowing that their commitment is restricted by political inadequacy?
This long awaited initiative is a fiasco in all respects .
CentreLink cut me off in December on the pretext that they thought our combined income could exceed the threshold. My wife resigned from her job in January and we’re been without income for over 6 months. CentreLink’s response? Monthly requests for more information coupled with fortnightly texts that they’re sorry for the delay. I’m ready to hand the whole thing over to retirement essentials when somebody responds to my email.