Working beyond 67 may not appeal to everyone, but a federal scheme could allow older Australians to boost their income without affecting their Age Pension.
The Work Bonus – a program that remains underused despite its potential financial benefits – enables eligible pensioners to earn additional income while retaining more of their pension entitlements.
Last financial year, approximately 2.7 million Australians received the Age Pension. However, only a small proportion accessed the Work Bonus.
During that period, around 156,000 customers of Age Pension age receiving the Age Pension, Carer Payment or Disability Support Pension made use of the scheme.
This means a significant number of eligible Australians may be missing out on support intended to ease financial pressure, particularly as living costs continue to rise.
The Work Bonus allows pensioners who take on paid work – either through an employer or eligible self-employment – to keep more of their pension on top of the standard income test free area, which is $218 per fortnight for singles and $380 per fortnight combined for couples.
Under the scheme, $300 is added to a pensioner’s Work Bonus Bank balance each fortnight. If the pensioner earns more than $300 from work in a single fortnight, the excess is offset against their Work Bonus balance. Their pension rate remains unchanged until that balance is reduced to $0.
If the full $300 is not used in a fortnight, the unused portion accrues, up to a maximum balance of $11,800.
The Work Bonus also accommodates people who work intermittently or earn higher amounts over short periods, such as seasonal or contract-based roles.
In these cases, short bursts of income may not affect a pensioner’s payment.
Those who are over Age Pension age and claiming a pension for the first time begin with a Work Bonus balance of $4,000. This allows new recipients to commence work immediately and earn more than $4,000 before any change to their pension rate occurs.
To be eligible for the Work Bonus, individuals must be of Age Pension age and receiving one of the following payments:
- Age Pension
- Carer Payment
- Disability Support Pension
Each payment has specific conditions attached. Those receiving Carer Payment or Disability Support Pension must still satisfy the usual work requirements for those payments.
People receiving the transitional rate of pension are not eligible for the Work Bonus.
Eligible recipients can view their current Work Bonus balance through their Centrelink online account via myGov.
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