The Work Bonus allows pensioners who are working to keep more of their pension, on top of the normal income test free area. (Source: Services Australia/AAP)
Working beyond 67 might not sound like everyone’s idea of Christmas cheer, but what if there was a way to earn some extra money without it affecting your Age Pension?
Enter the Work Bonus — a lesser-known scheme that could put more cash in your stocking just in time for the festive season.
There were approximately 2.7 million Australians on the Age Pension last financial year, but only a very small percentage took advantage of the Work Bonus.
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During this time frame, around 156,000 customers who were Age Pension age and receiving the Age Pension, Carer Payment or Disability Support Pension took advantage of the Work Bonus.
That’s a lot of people potentially missing out on a benefit that can make a real difference, especially at this expensive time of year.
The Work Bonus could also be called the ‘Santa Claus’ because, for many older Australians on fixed incomes, it can feel like Christmas has come early with a little more jingle in their pocket.
The Work Bonus allows pensioners who are working (for an employer or eligible self-employment) to keep more of their pension.
That’s on top of the normal income test free area of $218 per fortnight for singles and $380 per fortnight combined for couples.
Each fortnight $300 is added to your Work Bonus Bank balance. If you earn more than $300 from work in a single fortnight, any extra income is offset against your Work Bonus Balance. Your pension payment doesn’t change until your Work Bonus balance is reduced to $0.
If you don’t earn enough to offset the full $300 Work Bonus, the unused amount rolls over, up to a maximum of $11,800.
The Work Bonus also supports pensioners who work in short, higher-income bursts during the year. So, you could work as a store Santa or an exam marker for four to six weeks’ work, and it may never affect your pension.
If you’re over Age Pension age and claiming a pension for the first time, you’ll start with a Work Bonus balance of $4,000.
Meaning you could start work straight away if you wanted and earn over $4,000 in your pocket before you see any change to your pension rate.
It doesn’t matter if you’ve made Santa’s nice list, but to be eligible for the Work Bonus, you must be of Age Pension age and on one of these payments:
Each payment has different rules. If you get Carer Payment or Disability Support Pension, you still need to meet the normal work rules for those payments.
If you’re getting the transitional rate of pension, you’re not eligible for the Work Bonus.
You can use your Centrelink online account through myGov to see your Work Bonus balance.
Besides the Work Bonus, there are plenty of other ways to keep your wallet merry and bright this Christmas.
Try a Secret Santa instead of buying everyone their own gift, host a potluck Christmas lunch where each guest brings a dish to share, or consider re-gifting.
But beware of the Christmas credit card hangover. Credit cards and personal loans can be attached to high interest rates and fees, which can cause your debt to snowball faster than Frosty on a hill.
Need a little guidance before your budget flies off like Rudolph on Christmas Eve? Don’t stress, you can talk to one of our Financial Information Service Officers for free and impartial information.
While this service doesn’t provide personal financial advice, it helps people to improve their financial capability and builds self-sufficiency by looking at financial options beyond the payments we offer.
We also have support to help you budget, deal with debt and manage your money on our website.
Hank Jongen is Services Australia General Manager
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