How much can you earn?
Allowing retirees to earn more, whilst retaining their Age Pension eligibility, is a move that’s gaining momentum. A doubling of the current work bonus, from $7800 per annum to $15,600 without financial penalty has a lot of support.
The proposed policy from Opposition Leader Peter Dutton has been met positively by new Labor Treasurer, Dr Jim Chalmers. Dr Chalmers agreed that a policy allowing older Australians to work more, without a loss of benefits, would be included in the upcoming Employment Summit in September.
What might this mean for you?
As you are probably aware, the pension eligibility income thresholds changed again on 1 July this year.
The new disqualifying income limits are:
- Single $2165.20 per fortnight
- Couple (combined) $3313.60 per fortnight
- Illness – separated (couple combined) $4286.40
But before any income is considered, the work bonus is applied, (read here for the full rules), so essentially there is an ‘eligibility free’ allowance of $7800 per year for all who are already on the Age Pension, before any payments are reduced.
Industry observers have equated the $300 per fortnight allowance to about one day’s work on a minimum wage. Which is often not enough to provide work that keeps you stimulated and engaged. Doubling this amount would, of course allow you to double your interaction with an employer and earn much more without threatening any Age Pension entitlements.
According to recent National Seniors Association (NSA) research, there is pent up demand to work more for a significant one fifth of Australian retirees. NSA are in fact lobbying to exempt employment income from the Age Pension income test. You can support their online petition here.
The Chief Executive of the ACCC, Andrew McKellar estimates that up to 400,000 senior workers could be enticed back to work if an increased work bones were to be implemented.
At a time of widespread skills shortages, many employers are now finally overcoming previous ageist attitudes and beginning to genuinely appreciate the value of mature workers. Retirement Essentials has covered the benefits of working longer previously. It’s not for everyone, but many older Australians do appreciate the structure, social engagement, sense of purpose and skills training a job can deliver.
And, of course, that welcome income boost.
Who knows, you may even now be able to afford an extra lettuce or two?
What do you think?
Are you in favour of those on an Age Pension being allowed to earn more?
If so, is a doubling of the work bonus the best way to do this?
Or is it time to tackle the whole eligibility challenge head on and just introduce the Universal Age Pension and be done with it?