Income benefit:
Claim your credit before it expires
A popular recent article explained how changes to income thresholds now mean that a couple who hadn’t yet retired could now be eligible for an Age Pension owing to threshold changes. And that, along with this eligibility, comes the ability to use the ‘increased’ Work Bonus of $11,800 each. Both members of a couple can access the work bonus of $11,800 each but to do so they each need to be working as they can only apply their own income to the bonus, not their partner’s. Essentially each member of a couple has the same Work Bonus amount as a single person.
But, as often occurs, when it comes to this higher Work Bonus, the devil is in the detail.
What you need to know
It is tempting to assume that, as the previous $7800 Work Bonus has a ‘carry forward’ component for credits not used in any one year, that this would also apply to the higher amount of $11,800.
But this is not the case. The original Work Bonus of $7800 retains its ‘carry forward’ provision. But the extra $4000 which was announced last December, and added to the $7800, is only available until December 31 2023. As stated by Services Australia:
‘From 1 January 2024, the maximum Work Bonus balance able to be accrued will decrease from $11,800 to $7800. Any Work Bonus balance amount above the new maximum will no longer apply.’
Put simply, the extra $4000 is viewed as a ‘short term credit’ as opposed to an actual increase in the Work Bonus that might observe all the normal rules.
Use it before you lose it
What does this mean in your situation? It means that, if you have a Work Bonus balance of more than $7800 it is worth considering using it up before it expires at the end of the year.
This, of course, may be easier said than done depending upon your work plans and how easy it is for you to find paid work.
But it’s best to know well beforehand if something you assume will go forward is going to disappear.
As always, forewarned is forearmed.
What about you?
Did you already know this detail about the Work Bonus? Or has it come as a surprise?
Will it affect your work plans?
If this article has raised any concerns about your current entitlements, feel free to use our free Age Pension Eligibility Calculator. If you are still unsure about how best to use the current and future Work Bonus allowances, our Advisers are happy to help.
How do I claim for the work credit bonus
Hi Marie, thank you for kicking off the comments! There is nothing you specifically need to do, when you declare employment income to Centrelink they will automatically check if you have any Work Bonus credit and deduct it from your assessable income accordingly.
Does the work bonus of $11,800 reduce on a pro-rata basis if the individual only receives a part pension rather than full.
Hi Steve, two Steves can’t make a wrong! The Work Bonus reduces by whatever employment income you earn regardless of the amount of Age Pension you receive. If you have $3,500 accrued and earn $2,000 then the full $2,000 is covered by the Work Bonus and your remaining balance would be $1,500. If you only had $600 in Work Bonus credits but earnt $1,500 then $600 would be used and the remaining $900 of income would be assessed and potentially reduce the amount of Age Pension you earn.
hello
do we need to go on pension than fi nd work to accrue for the bonus or we can just continue working &put in a vlaim.
thank you
Hi Germaine, thank you for seeking clarity! As the work bonus offsets the income assessed for your Age Pension, you do need to be receiving the Age Pension for it to begin accruing. You cannot apply for the pension with a work bonus balance already accrued.
Is the work bonus added to the amount you can already earn say from investments or other income?
Hi Janet, thanks for reaching out! Yes the work bonus is in addition to the minimum income threshold you are allowed however the work bonus can only offset employment income, not income for investments or other sources.
Good Morning
If my work credits run out and my husband has not used any of his as he has not worked for 40 years, is there a way I can access his?
Hi Narelle, good work getting into the nitty gritty details to make sure you optimise your situation! The answer I’m afraid is a no, each person has their own work bonus to offset their own employment income and one person cannot use the other’s.