Pension Bonus Scheme
Purpose of Payment/Benefit
The Pension Bonus Scheme (the scheme) was introduced on 1 July 1998. It provides an incentive for older Australians to defer claiming Age Pension and instead remain in the workforce. The scheme pays a tax-free lump sum to members when they eventually claim and receive Age Pension.Eligibility
The bonus can only be paid to people who have not received Age Pension or any other income support payment (other than Carer Payment) since reaching age pension age.People must register to participate in the scheme, to ensure that they are fully informed and can decide whether or not it is to their advantage to participate. Some people may be better off receiving a part-rate pension and concessions while they continue to work. People who register within 13 weeks of becoming qualified for Age Pension automatically have their registration backdated to when they first qualify for Age Pension. People who register outside the 13 weeks generally have their registration start from the date they apply unless special circumstances exist.
To receive a bonus, a person must work a minimum of 12 months from the date of registration and complete at least 960 hours of paid work in this and any subsequent years. This is an average of 20 hours' each week for 48 weeks each year. For couples, only one person must pass the work test. 2/3 of the 960 hours of work must be completed in Australia.
A bonus can be accrued for a maximum of 5 years and cannot be accrued after the age of 75 (but work by a person after age 75 can accrue towards the bonus of a younger partner who has not accrued the maximum of 5 years).
The bonus is paid when a person first claims and receives Age Pension. The claim for bonus and Age Pension must be lodged together. Unless special circumstances exist or the person's membership is non-accruing, the bonus must be claimed within 13 weeks of failing to meet the worktest.