By Hank Jongen
General Manager, Services Australia
RETIREMENT can often feel like a lifetime coming.
But once you actually get there, it can be both exciting and a little bit daunting.
It’s a major life adjustment, and particularly so if you’ve spent decades in the workforce.
It’s never too early to start planning for retirement or considering if you’ll work past pension age.
If you’d like to keep a foot in the door with your current job or pick up new work in the future but you’re not sure what this means for your Centrelink pension, then the good news is you may benefit from Work Bonus.
Work Bonus is an incentive for pensioners to work past retirement age.
It allows you to earn more from working each fortnight before your pension payment rate starts to reduce.
So how does it work?
Work Bonus allows you to earn up to $300 a fortnight from employment without it affecting your pension rate.
If you earn less than $300 in a fortnight, any leftover Work Bonus will accrue in your Work Bonus balance.
For instance, if you earn $0 in a fortnight, we’ll add the full $300 to your Work Bonus balance.
We’ll stop adding to your Work Bonus balance once it reaches a maximum of $7,800.
You can use your Work Bonus balance to offset higher future earnings.
For instance, if you earn more than $300 in a fortnight, we’ll use the first $300 of your Work Bonus to reduce your income, and then use any Work Bonus balance you have to reduce the remaining income.
After you’ve completely used up your Work Bonus balance, you’ll start to be credited again with up to $300 of Work Bonus each fortnight.
Work Bonus applies to income received from working for an employer or from self-employment.
If you’re self-employed, you need to be actively participating in your own employment, meaning you’re doing work that involves effort, such as bookkeeping, cleaning duties, lawn mowing, or even driving an Uber.
If you’re thinking of taking up some work, you don’t need to apply for Work Bonus.
We’ll apply the Work Bonus to your income test automatically if you meet all the eligibility requirements.
However, if you’re self-employed, it’s best to speak with us first so we can determine how you will need to report your income.
For more information about Work Bonus, visit servicesaustralia.gov.au/workbonus.