Age Pension Work Bonus can be a benefit for some pensioners, but may not help others. So what’s the difference and why should you bother?
What is the Work Bonus?
In a nutshell, this is an incentive for pensioners to stay in the workforce and a portion of earned income from your gainful employment is excluded from the usual Income Test when calculating the Age Pension payment. So your very first step should be to understand how the Age Pension Income Test works.
Under the Work Bonus rules, you can earn extra $300 per fortnight over and above the fortnightly limit of $180 per person, and still enjoy your Age Pension eligibility calculated for you under Income and Assets Tests.
How does Work Bonus work?
The easiest way to understand it is imagining that each year you have in your Work Bonus bank a balance of $7,800 per person. Each fortnight you can use up to $300 of your balance without effecting the level of Age Pension. And I repeat, this is over and above the allowable $180pf per person earnings.
Who is eligible for the Work Bonus?
To be eligible for the Work Bonus you actually have to be of Age Pension age and in receipt of payments such as Age Pension, Carer Payment or Disability Support Pension. If you receive your Service Pension or Income Support supplement from the DVA (Department of Veterans Affairs), you are also eligible for the Work Bonus.
Application for Work Bonus.
Pensioners do not need to apply for the Work Bonus. If you are a pensioner with income from work, as described before and you comply with all the rules, you must advice Centrelink of your income earned. The Work Bonus will be applied to your income that has been reported, which you can do via telephone, in person at the Centrelink office of via MyGov portal, that unfortunately can be temperamental.
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Age Pension Work Bonus is a program introduced by the Australian government to encourage older Australians who are receiving the Age Pension to continue working without affecting their pension payments. It allows pensioners to earn additional income through employment while still receiving their pension benefits.
But is it worth the bother for older Australians to take advantage of this program? The answer largely depends on individual circumstances and preferences. Here are some factors to consider when deciding whether the Age Pension Work Bonus is worth your bother.
One of the main advantages of the Age Pension Work Bonus is that it allows pensioners to earn extra income without reducing their pension payments. Under the program, eligible pensioners can earn up to $300 per fortnight without it affecting their pension payments. This can provide financial relief for pensioners who want to supplement their income or continue working in their later years.
Additionally, the Age Pension Work Bonus can help older Australians stay connected to the workforce and maintain a sense of purpose and fulfillment through employment. Many older adults find that working provides them with a sense of identity and social connection, as well as a way to stay mentally and physically active.
However, it is important to consider the potential drawbacks of participating in the Age Pension Work Bonus program. For some pensioners, the additional income earned through work may not outweigh the effort and time required to maintain employment. Working can be physically and mentally demanding, and older adults may prefer to enjoy their retirement years without the stress of a job.
Furthermore, navigating the complexities of the Age Pension Work Bonus program and understanding its rules and regulations can be challenging for some older Australians. It may require additional paperwork and reporting requirements, which can be a hassle for those who are not familiar with the program.
Ultimately, whether the Age Pension Work Bonus is worth the bother for you will depend on your personal circumstances and preferences. If you enjoy working and want to supplement your pension income, the program can be a valuable opportunity. However, if you prefer to focus on leisure activities and relaxation during your retirement years, you may find that the extra effort required to participate in the program is not worth it.
In conclusion, the Age Pension Work Bonus can be a valuable program for older Australians who want to continue working and earn extra income without affecting their pension payments. However, it is important to weigh the pros and cons of the program and consider your individual preferences before deciding whether it is worth your bother.
Do you find Work Test beneficial? Can you use it to your advantage?
great information, thank you
Thanks for the video.
Thank you Katherine. Your videos are very knowledgeable and helpful. You haven’t mentioned income tax. I assume there may be income tax on the work bonus?
Thankyou – what happens if like me you do Airbnb and every week is different?
Wonderfully informative videos. Thanks very much for sharing this information. My wife is unemployed and not looking, and is 8 years younger than me. As I approach retirement age, It would be great if you could add this kind of scenario when giving examples of eligibility. Thanks heaps
Well it sounds good that someone can work and keep working forever to earn over 100k. But what if they couldn't work. And have no home they will have to live on few dollars from Centrelink and rest from investment property.
. In the last example I learnt that most money was earnt by the couple. And Centrelink input kept getting less and less as people create assets or keep working longer.
Imagine they stopped working and have to pay rent .now they can either pay rent or live day today life.
Investing in income producing property seems like a bad idea.
It would be better to have a house of your own. Which grows in value as well.
But the point is you r always hand to mouth never well off as a oldy.
Hi Katherine
Because Romania are not on the list of social services ovresee the penson could be payed once montly in US dollars
The payment can be made opening an account for a US bank located hire ,for exemple CityBank
That's the form Aus 178-19041 which mast be completed and sent to Centerlikk
Hi Katherine
B
Thanks, this is useful. I am assuming the work bonus of $7800 PA and the $180 per fortnight are gross amounts, so tax will still come out as its earned. I have been trying to work out what I can live on, ie. what cash I will end up with. How much would one pay in tax ea year if they were eligible for this, received the full pension and earned only the $480 per fortnight, as a single person. This being the only income, no investments. Thanks.
My God, had I watched this video before I would not have been idling at home.
Many thanks.
Thank you for these great videos. If a homeowner couple who are under the asset test of 406k and one is still working and the other about to reach age pension age and not working is there any advantage of transferring some super to the one still working, before starting a super retirement acc?