The “secret” bonus for seniors who work
Thanks to government tax offsets, a good portion of seniors’ income is tax-free. However, not enough people are taking advantage of another great incentive: Centrelink’s Work Bonus.
Last financial year, Centrelink paid $39.39 billion to 2.41 million Australians in age pension. But only 156,000 Australians took advantage of the Work Bonus that allowed them to keep more of their pension, according to government figures.
“It frustrates us that this is a real incentive that’s little known,” says Hank Jongen, general manager of the Department of Human Services.
“It’s Centrelink’s best-kept secret. There’s a broader trend to encourage older Australians to keep working, and this bonus is intended to give them the incetive to do that.
“It’s the most generous income test of all payments.”
But how does it work? It enables pensioners and part-pensioners to earn $250 a fortnight of employment income without it affecting the pension income test. It’s known as the ‘Santa Claus bonus’ – for every fortnight you are not working, the available bonus accumulates up to $6500 a year. This allows pensioners to work in short, higher-income bursts during the year.
“If you work as a store Santa or an exam marker you could do four to six weeks’ work and it may never affect your pension,” Jongen says.
You don’t need to apply for the Work Bonus. Centrelink will automatically apply the Work Bonus to your pension income test. This usually reduces your age pension when your income from all sources reaches $160 a fortnight. For couples it’s $284 a fortnight.
Unfortunately, it only applies to employment income. Self-employed people miss out. It also does not apply to investments or income from superannuation.
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