An incentive for pensioners of Age Pension age to remain in the workforce.
- over Age Pension age
- working for short periods
You are now able to keep more of your income or work for short periods with little or no effect on your pension.
Eligibility & payment rates
All pensioners over age pension age other than recipients of Parenting Payment single are eligible for the Work Bonus.
A transitional rate of pension protects the entitlements of pensioners who received a payment reduction as a result of the 2009 Pension Reform changes.
The transitional rate of pension is calculated using the old pension income test rules. The Work Bonus is not included in this transitional rate calculation.
If you are on a transitional rate of pension, we will continue to compare your rate with the amount you would receive if you were not on the transitional rate, including the effect of the Work Bonus.
Once the new rate of pension gives you a rate equal to or higher than the transitional rate, it will be used to calculate your pension.
If you are thinking of taking up work, you should talk to us about how this might affect your transitional rate.
If your partner is a pensioner of age pension age and receives employment income, the Work Bonus will reduce their assessable employment income.
For each member of a couple, we will assess employment income and apply the Work Bonus. Any other income is assessed as usual and will affect each member of the couple equally under the income test.
If you are eligible for the Work Bonus but your partner is not, they may still benefit from the effect of your Work Bonus.
The Work Bonus applies to income from employment, including wages paid in Australia and outside Australia.
The Work Bonus applies to income from employment, including:
- wages paid in Australia and outside Australia
- leave, where you remain an employee of the same employer and
- director’s fees
We will apply the Work Bonus to your assessable employment income before your pension is paid each fortnight.
The Work Bonus is not applied to income from:
- leave payments if you have terminated your employment
- self employed income
- payments to you as a principal from sole traders or partnerships
- investments or
- superannuation income
If you do not work, the entire fortnightly Work Bonus amount of $250 is saved and added to your Work Bonus balance. Your Work Bonus balance can reach a maximum of $6,500.
Watch the Work Bonus video to see how the Work Bonus can assist retirees receiving Age Pension enjoy working and retirement, and the benefits that can bring.
If you earn less than $250 in a fortnight, part of the $250 Work Bonus will reduce your assessable employment income to zero, and the remaining amount will be added to your Work Bonus balance.
If you earn exactly $250 in a fortnight, the Work Bonus will reduce your assessable employment income to zero, and your Work Bonus balance will not change.
If you earn more than $250 in a fortnight, the Work Bonus will reduce your assessable employment income by $250. Then, any Work Bonus balance you have built up is used to reduce the remaining employment income.
You do not need to apply for the Work Bonus, but you do need to let us know about changes to your earnings. If you receive eligible employment income, we will automatically apply the Work Bonus to your income test.
Managing your payment
You should continue to advise us of your gross earnings. We will automatically deduct the correct amount under the Work Bonus before applying the relevant income test.
You can get help to manage your money if your bank account is overdrawn.