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?
It is about time those on the Age Pension should be able to work as much as they want. There is a huge untapped market which is available and needed when migration, thanks to Covid, has been limited.
Look at countries like New Zealand who are aware of the benefits. Why wait till September to allow this?
I don’t understand this focus on work and pension given employers aren’t keen on employing anyone over 40.
The focus should be on lifting pension thresholds or better still universal full age pension (like NZ), together with raising pensions substantially so older people can enjoy retirement without financial stress or worrying about finding a job.
Totally agreed with Mira, the focus should be on lifting pension thresholds or better still universal full-age pension (like NZ), together with raising pensions substantially, it is neither reasonable nor humane to let the elderly who have been working all their lives, declining and sluggish now face the cumbersome and complicated pension system again to apply. If they can cope perfectly, they should keep working.
Everyone is equal before age, and it is imperative to implement universal basic pensions.
Definitely, doubling the work bonus makes sense in today’s context. In actual fact, there is no logic why it shouldn’t be increased even more, but I guess then that it would make a mockery of the income threshold !!
I think Mira is quoting past practice. Many employers like older people for different reasons, more reliable, diligent, responsible etc.
Doubling the work bonus would be a good move and a welcome start.
Whilst some employers value experience in older employees we frequently experience age discrimination. With so many vacancies in the job market that can’t be filled, we might perhaps see a more positive attitude towards older workers who could benefit from this opportunity.
Totally agree with doubling the work bonus but more so changing the pension to something like the NZ system most people in the 60 +age group have not had the opportunity to accumulate enough super to comfortably retire and I think something along these lines would be a win win for all.
Yes, agreed with Geoffrey, 60 +age groups have not had the opportunity to accumulate enough super to comfortably retire, everyone is equal before age, and it is imperative to implement universal basic pensions.
Earn more yess , but to review the limit at tax , because some can only get the chance to work at certain times in regional areas, then only reporting to centre link once a yeayt
As someone who has worked on and off in casual and contract jobs since becoming eligible for the age pension, I have been able to take advantage of the work bonus. In particular, the fact that it accumulates fortnightly by $300 up to a maximum of $8,100. Having that (relatively) large accumulated ‘bonus’ means that a person can do a full time job for a shortish period of time (a few weeks) without losing any pension benefit.
This may not suit those who need to regularly supplement to their pension or super income.
$300 per fortnight though means that it’s not really feasible for a person to have a regular part time or casual job, even for a day or two a week.
If the work bonus amount was increased, there would be incentive for people to seek out more regular work.
I enjoy the interaction with other people when I go to work and it’s probably good for my general well being. Having a bit of extra income it always nice and not being restricted by concern about cuts to my pension is a very attractive option. I’d probably seek out more casual work.