The Australian Government is continuing to assist older Australians to work, if they are able and wish to do so.
Seniors may have substantial earnings and still receive an Age Pension. Age Pension rules provide incentives for employment, including part-time or casual employment through the combined application of the pension income test and the Work Bonus.
New Work Bonus
From 1 July 2011, the Work Bonus has been expanded to allow age pensioners, especially those with seasonal or intermittent jobs, to keep more of their pension if they choose to work. Eligible pensioners can earn up to $250 a fortnight without it being assessed as income under the pension income test.
Any unused amount of the fortnightly $250 Work Bonus accumulates in an ‘Employment Income Concession Bank’, up to a maximum amount of $6,500. Credit in the income bank can then be carried forward and be used to offset employment income that would otherwise be assessable under the pension income test. An eligible pensioner couple can each accumulate $6,500 - a combined total of $13,000.
For information about the new Work Bonus, please refer to the Work Bonus factsheet.
Pension Income Test
The pension income test is designed to encourage pensioners to supplement their pension with additional private income. A pensioner can receive an amount of private income before their pension rate starts to reduce. This is the income test free area which, at 1 July 2011, is $150 for single rate pensioners and $264 for couples (combined). For each dollar of income above the income test free area, the single pension is reduced by 50 cents.
For further information about the income test free area and the amount of private income a pensioner may receive before their pension rate reduces to zero, please refer to Centrelink.
More information for seniors in the workforce