Working after pension age
The Australian Government is assisting older Australians to work, if they are able and wish to do so, by allowing them to keep more of their pension when they have income from work.
.
Seniors may have substantial work income from and still receive a pension (Age Pension, Disability Support Pension, or Carer Payment). For those over Age Pension age, the application of the pension income test and the Work Bonus provide an incentive to work.
A pensioner can receive an amount of private income before their pension rate starts to reduce. This is the income free area which, from 1 July 2023, is $204 for single-rate pensioners and $360 for couples (combined). For each dollar of income above the income free area, the single pension is reduced by 50 cents.
What the standard rules are
These are the income rules for most pensioners. Read about the Work Bonus below, and how it can help you earn more income from working without reducing your pension.
Single person
Income per fortnight | Amount your pension will reduce by |
---|---|
Up to $204 | $0 |
Over $204 | 50 cents for each dollar over $204 |
Couple living together or apart due to ill health
Combined income per fortnight | Amount your combined pension will reduce by |
---|---|
Up to $360 | $0 |
Over $360 | 50 cents for each dollar over $360 |
Work Bonus
Under the Work Bonus, the first $300 of fortnightly income from work is not assessed as income under the pension income test. Any unused amount of the fortnightly $300 Work Bonus will accumulate in a Work Bonus income bank, up to a maximum amount.
The amount accumulated in the income bank can be used to offset future income from work that would otherwise be assessable under the pension income test. The income bank amount is not time limited; if unused it carries forward, even across years.
Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances. The maximum income bank balance also increases to $11,800 over this period. Subject to the passage of legislation, from 1 January 2024 this temporary measure will be made permanent, resulting in all new pensioners over Age Pension age receiving a one-off $4,000 credit to their Work Bonus income bank. The maximum income bank balance will also be permanently increased to $11,800.
Hot Issues
- ATO encourages trustees to use voluntary disclosure service
- Beware of terminal illness payout time frame
- Capital losses can help reduce NALI
- Investment and economic outlook, August 2024
- What the Reserve Bank’s rates stance means for property borrowers
- How investing regularly can propel your returns
- Super sector in ASIC’s sights
- Most Popular Operating Systems 1999 - 2022
- Our investment and economic outlook, July 2024
- Striking a balance in the new financial year
- The five reasons why the $A is likely to rise further - if recession is avoided
- What super fund members should know when comparing returns
- Insurance inside super has tax advantages
- It’s never too early to start talking about aged care with clients
- Capacity doubts now more common
- Most Gold Medals in Summer Olympic Games (1896-2024)
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
October - December 2023 archive
- Working after pension age
- Does the NALI/E punishment fit the crime?
- EPOA crucial for SMSFs, says professional adviser
- Economic and market outlook for 2024: Global summary
- Five investing tips for beginners
- Setting up the next generations of retirees
- A 2023 Advent Calendar for our clients
- Most Expensive Wars In History
- ATO takes hard line on in-house asset rules
- How to budget using the 50/30/20 method
- SMSFA says proposed super legislation will hit farmers, small businesses the most
- Investment and economic outlook, October 2023
- The benefits and risks of collectable super assets
- Teaching children about the value of money
- Most powerful countries throughout time.
- Retirement is not just about dollars
- Unfair Terms in a Standard Form Contract
- Too many businesses roll the dice on tax debt: Jordan
- Revised NALE rules ‘miss chance to clarify SMSF bugbear
- 6 simple rules will ensure a deed can be executed in all states
- Our investment and economic outlook, September 2023
- The benefits and risks of collectable super assets
- High deposit rates, but the case for equities is strong
- Most powerful LEADERS of All Time