How does the Work Bonus apply to the Australian Aged Pension.
Australians getting the Aged Pension are allowed to earn a small amount each fortnight, without affecting the amount they receive as their pension.
The basic rule is that their pension is NOT affected if they receive under $178 per fortnight.
However, the work bonus can increase that by another $300.
The Work Bonus increases the amount an eligible pensioner can earn from work before it affects their pension rate. From 1 July 2019, the first $300 of fortnightly income from work is not assessed and is not counted under the pension income test.
The Work Bonus operates in addition to the pension income test free area.
Work Bonus for Single Pensioners
(effective 1 July 2020).
The pension income test free area is $178 a fortnight and for couples combined, it is $316 a fortnight.
Example: A single pensioner, over Age Pension age, with no other private income could earn up to $478 a fortnight from work and still receive the maximum rate of pension.
Work Bonus for Pensioner Couples.
(effective 1 July 2020).
The pension income test free area is $316 a fortnight for a couples combined income.
The Work Bonus applies to individual pensioners. It is not shared by a pensioner couple.
Example: Mary and Jim are a couple who both receive the Age Pension.
Mary has work income of $650 a fortnight.
Jim has self-employment income of $220 a fortnight.
They have no other income.
Only $350 a fortnight is assessed as income for Mary. ($650 less $300 work bonus).
Nothing is assessed as income for Jim. ($200 less $300 work bonus. Jim’s work bonus balances increases by the unused $100).
Under the pension income test, pension is reduced by 50c for every $1 of income over the income test free area.
Mary and Jim’s combined assessed income of $350 a fortnight is $34 higher than the income test free area ($316 a fortnight for a couple) and their combined pensions are reduced by $17 a fortnight ($8.50 a fortnight each).
If Mary was under the aged pension age, she would not be eligible for the Work Bonus.
This would then change their situation to:
$650 a fortnight is assessed as income for Mary. (No work bonus exemption).
Nothing is assessed as income for Jim. ($200 less $300 work bonus. Jim’s work bonus balances increases by the unused $100).
Mary and Jim’s combined assessed income of $650 a fortnight is $334 higher than the income test free area ($316 a fortnight for a couple) and Jim’s pension is reduced by $167 a fortnight.
These figures are calculated from the link below, but should be checked with Centrelink, based on your individual situation.
Saving the Work Bonus for the future.
Any unused part of the $300 fortnightly Work Bonus exemption amount can be accrued and used in future payment periods. The maximum that can be saved into the “Work Bonus income bank” is currently $7,800.
More details and examples at: dss.gov.au/…/work-bonus