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.