In this article, you’ll learn about the Pension Work Bonus: What is the Age Pension Work Bonus, who is eligible, and what benefits it offers. The Federal Australian Government’s Department of Social Services provides essential benefits to Australian workers, designed to support them with a substantial amount of financial aid. The Work Bonus is a program that allows pensioners over the Age Pension age to continue receiving their pension while earning from work. To find out more about the Pension Work Bonus, its eligibility criteria, and other details, keep reading this article.
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Pension Work Bonus
The work bonus reduces the portion of a worker’s income considered in the income test, helping to adjust their payment rate and maximum work bonus balance. This serves as an incentive for pensioners to remain in the workforce. Eligible workers can have a portion of their income from employment counted towards the Centrelink income test.
Recent changes to the Work Bonus rules allow eligible pensioners to earn up to AUD 300 per fortnight without affecting their pension entitlement. A temporary off-cut credit of AUD 4,000 in the work bonus balance, introduced in September 2022, was set to end on January 1, 2024. However, in September 2023, the Federal Government announced that this increase would be made permanent. As a result, eligible pensioners can now earn up to AUD 11,800 per year before losing their pension entitlement.
What is the Age Pension Work Bonus?
The Work Bonus is a program that provides income support by allowing the first AUD 300 of fortnightly income from work to be excluded from the pension income test. Unused portions of the Work Bonus accumulate in the Work Bonus income bank, which offsets against individual work income, with a maximum balance set for this bank.
The Work Bonus income bank is a permanent benefit granted to eligible individuals starting from the date they receive their one-time Work Bonus income credit. These benefits are automatically applied to the Work Bonus for both employed and self-employed recipients. The bonuses cover income from working in or outside Australia, including directors’ fees, paid leave, and active self-employment.
Who is Eligible?
The Pension Work Bonus is available to all pensioners who are over the age pension age. This includes recipients of the age pension, disability support pension, and Carer payment. It also extends to Federal Department of Veterans Affairs Service Pensioners and Income Support recipients.
Centrelink applies income and assets tests to determine the rate of payment. Beneficiaries receive the Pension Work Bonus if their income and assets are below certain thresholds, based on their financial situation. This bonus benefits pensioners who are paid below their income test limits.
What are the Benefits?
The Pension Work Bonus is designed for eligible pensioners, allowing them to earn from work without affecting their pension rate. Under this program, the first 300 AUD of fortnightly earnings from work are excluded from the pension income test.
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Here’s how the Pension Work Bonus works:
- Maximum Work Bonus Amount: Up to $11,800, with new pensioners starting with a $4,000 balance.
- Types of Income Covered: Includes salary, leave payments, employment-related benefits, wages, commissions, bonus payments, and other casual loadings.
- Exclusions: The bonus does not apply to income from financial investments or properties. It covers work-related income from domestic tasks, gardening, and similar activities at the pensioner’s residence.
Eligible pensioners do not need to apply for the bonus. They simply need to inform Services Australia of their work-related income.