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Home / Retiree / Age Pension and seniors concessions / Age Pension Work Bonus: How it works and case studies

Age Pension Work Bonus: How it works and case studies

Karen Hunt

Key points about the work bonus:

  • Current rate: The first $300 a fortnight you earn is not assessable. Unused amounts build up in your Work Bonus balance, up to a maximum of $11,800.
  • Eligibility: Anyone who receives Age Pension, Carer Payment or Disability Support Pension and has work-related income is eligible.
  • How it works: The work bonus disregards some of the income you earn from working in the pension income test, allowing you to earn more from work before your pension starts to reduce.

The Work Bonus is an incentive to keep pensioners in the workforce. If you are eligible, a portion of any income you earn via gainful employment does not count towards Centrelink’s income test.

Under existing Work Bonus rules, eligible pensioners can generally earn up to $300 a fortnight before they lose any of their pension entitlements. 

The government has made a few changes to this program to make it more attractive for people who have reached Age Pension age to participate in the workforce.

First, in September 2022, a temporary one-off credit of $4,000 was added to the work bonus balance of all existing eligible pensioners. The plan was to remove this one-off credit on 1 January 2024. Then in September 2023 the government announced this temporary increase would be made permanent.

This means eligible pensioners can now earn up to $11,800 a year before losing any of their pension.

Whether you earn regular employment income or sporadic amounts from a side hustle, please read on. You may be missing out on your Work Bonus and therefore potentially thousands of dollars in additional income.

Here’s how the scheme works.

Watch our video guide below, or continue reading for in-depth detail on how the work bonus works.

This video is only available to members. Become a member

See also our supporting guide on How working affects your Age Pension and tax, which includes a calculator which estimates how work changes may affect your entitlement.

Am I eligible?

To be eligible, you must be over Age Pension age and in receipt of a pension payment (Age Pension, Carer Payment or Disability Support Pension).

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About the author

Karen Hunt
Karen Hunt is a Centrelink expert with My Pension Manager, an administration service specialising in Age Pension applications and dealing with Centrelink.
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Responses

  1. Stephen J Hall Avatar
    Stephen J Hall

    If I don’t claim the pension from age 65 but keep working full time until I’m 70 and then work part time and claim the pension, does that mean I’ll accumulate 5 years work bonus? Or is is capped, or doesn’t it accumulate while I’m not on the pension?

    Cheers Steve

    1. Robert Barnes Avatar
      Robert Barnes

      Hi Steve – We cannot offer any personal advice or recommendations, so you should check with Centrelink, but it appears that currently the maximum balance you can accumulate, once you are an eligible pensioner, is $6,500.

      Best wishes

      The SuperGuide team

  2. Micheline Avatar
    Micheline

    What if I earn £350 monthly from a pension in The Channel Islands
    Will tha be counted as workbonus ?

    1. SuperGuide Avatar
      SuperGuide

      We cannot give individual advice, but we can provide general information on the topics you raise in your question.

      The Age Pension work bonus applies to the Age Pension income test. The work bonus allows a person to earn up to $250 per fortnight if they’re still working, without this amount being included in their Age Pension income test. A person can therefore still earn up to this amount from working without these earnings affecting their Age Pension rate entitlement.

      It’s important to understand that the work bonus only applies to employment income (excluding self-employment and business income). In other words, it only includes income that is earned from an employer/employee relationship.

      All other income sources are included in your age pension income test to determine your eligibility for the Age Pension. These sources include income from any country in the world, not just Australia.

  3. Rhonda Henry Avatar
    Rhonda Henry

    If I understood correctly, when reading about the work bonus. A pensioner is able to earn $250 per fortnight , without effecting the fortnightly pension amount , if you earn over that , a certain percentage is taken from your fortnightly pension. When I first went on the pension I was told that you could earn $6500 over 12 months, I was also told, that it was a one off and it was not renewed every 12 months . The work bonus explanation,seems to say it is renewed each 12 months. I would appreciate it if you would clear this up for me .

    1. SuperGuide Avatar
      SuperGuide

      Hi Rhonda – This is what Centrelink says:

      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.

      So currently the balance of your Work Bonus can be up to $6,500, which is the equivalent of a year. So it’s not a one-off – it’s a maximum balance.

      Best wishes

      The SuperGuide team

  4. Roberto Hapsad Avatar
    Roberto Hapsad

    When I work under the Work Bonus, the employer is obliged to pay super into an account as soon as I earn $450 in a calendar month.
    Since I have retired, the account is new with zero balance, then gradually receives payments.
    But the fund ‘s administration charges quickly reduce my employer’s super deposits to zero. Again and again. Until I go on holidays when my account is considered inactive and is closed.
    When I return to work, The super fund sends me a new bundle of “Welcome to your New Super account” mail. And the merry go round continues.
    I am unhappy about this. So is my fund. My employer is ropeable.
    I wrote to my MP.

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