The Work Bonus lets you earn more income from working if you’re an eligible pensioner without reducing your pension.
What the Work Bonus is
The Work Bonus is an initiative to help older Australians access the benefits of working while getting a pension.
Watch our video about the Work Bonus.
Who can get it
You can get the Work Bonus if both of these apply to you:
You can’t get the Work Bonus if you get the transitional rate of pension.
How to get it
You don’t need to apply for the Work Bonus.
If you get income from work, we’ll apply the Work Bonus to your income test automatically.
If you get income from self-employment, you’ll need to tell us the percentage of income earned from your active participation.
Don’t forget, you must tell us about changes to your income.
Which income it's applied to
You need to tell us how much you earn. We use this information to apply the Work Bonus and income test.
We apply the Work Bonus to employment income you get from:
- working in and outside Australia
- paid leave while still employed
- director’s fees.
We don’t apply it to income you get from:
- leave after you’ve ended your employment
- payments from sole traders or partnerships
From 1 July 2019, there’ll be changes to which income we apply the Work Bonus to.
Your partner and the Work Bonus
The Work Bonus only reduces your partner’s assessable income if both of these apply:
- they’re a pensioner of Age Pension age
- they earn money from work.
You can’t use your Work Bonus for your partner’s wages. However, applying the Work Bonus to your wages will affect your combined income, which means your partner may still benefit.
How it works
If you don’t work
If you don’t work, we’ll add $250 to your Work Bonus balance each fortnight. We’ll stop adding the Work Bonus once your balance reaches $6,500.
If you work
If you earn less than $250 a fortnight:
- we’ll use some of your $250 work bonus to reduce your employment income to zero
- we’ll add the rest of the $250 to your Work Bonus balance.
For example, if you earn $150 in a fortnight we’ll:
- reduce your income by $150
- increase your Work Bonus balance by $100.
If you earn $250 a fortnight:
- we’ll use all of your $250 Work Bonus to reduce your employment income to zero
- your Work Bonus balance won’t change.
If you earn more than $250 a fortnight:
- we’ll use all of your fortnightly Work Bonus to reduce your employment income by $250
- we’ll reduce the remaining employment income by any Work Bonus balance you have.
From 1 July 2019, we’ll apply the Work Bonus to self-employment income from active participation.
Active participation means you’re doing work that involves effort. This is the opposite of income from passive involvement.
Examples of work involving active participation include:
- lawn mowing
Active participation does not include managing an investment portfolio or rental properties owned by:
- a family trust
- a family company.
Alex runs a business and earns income from self-employment. From 1 July 2019 we can apply the Work Bonus to this income.
Alex’s business income is $32,500 per year. This is $1,250 per fortnight. Alex hasn’t worked as an employee since getting Age Pension over 12 months ago. Because of this, Alex has a Work Bonus balance of $6,500.
We’ll apply the Work Bonus accrued to Alex’s self-employment income until the balance reaches $0. Once the balance reaches $0, we’ll apply the Work Bonus to Alex’s income up to the Work Bonus limit. From July, that will be $300 per fortnight.
|Fortnight||Business income||Work Bonus balance||Fortnightly Work Bonus||Work Bonus balance carried forward||Income included in the income test|
|1 July 2019 to 14 July 2019||$1,250||$6,500||$300||$5,550||$0.00|
|15 July 19 to 28 July 2019||$1,250||$5,550||$300||$4,600||$0.00|
|29 July 2019 to 11 August 2019||$1,250||$4,600||$300||$3,650||$0.00|
|12 August 2019 to 25 August 2019||$1,250||$3,650||$300||$2,700||$0.00|
|26 August 19 to 08 September 19||$1,250||$2,700||$300||$1,750||$0.00|
|9 September 2019 to 22 September 2019||$1,250||$1,750||$300||$800||$0.00|
|23 September 2019 to 06 October 2019||$1,250||$800||$300||$0||$150.00|
|07 October 2019 to 20 October 2019||$1,250||$0||$300||$0||$950.00|
For the first 6 fortnights after 1 July 2019, Alex’s Age Pension rate will increase. This is because we won’t include business income in Alex’s income test until their Work Bonus balance is $0. Then Alex will have 1 fortnight when we’ll only include $150 in the income test. From 7 October 2019, once Alex’s balance is $0, we’ll include all income over $300 in Alex’s income test.