The Commonwealth Government Work Bonus Scheme allows people on the Age Pension to earn an amount of $250 per fortnight that does not count towards their Income Test, and hence does not affect or reduce their Age Pension payment.
It’s a great idea aimed at keeping ‘oldies’ motivated and active. It’s well known that a little bit of enjoyable, meaningful work, especially with other people you like, is very healthy for you at any stage in life, but particularly as you get older. It also helps stretch out the super balance and, in the end, achieves the double benefit of more money for the individual and less cost to the government.
All of the above reasons make part-time work in retirement an important part of our financial strategies for clients over the age of 65. The effects on your financial future and well-being are enormous.
I also advise small businesses to look for older people wanting part time work to fill spots where they need experience, reliability and skills. I never cease to be amazed at the quality of people we get applying for part time positions. It seems very common for top quality people to get to the stage where they work because they want to, rather than have to, and have a great deal to offer. And all with a great attitude. Last year we had a full time position that we just couldn’t fill. In the end we tried advertising it as part time and took two applicants. One did 2 days and the other did 3 days and together they are amazing.
However, the latest government figures tell us that only about 150,000 pensioners are using the Work Bonus Scheme. That’s only about 6% of Age Pension recipients.
Maybe the numbers will increase a little bit come July 1st this year, as the threshold is being increased to $300 per fortnight. That’s $7,800 per year, in most cases, tax free and ‘Pension Reduction’ free.
Another change is that you will now be able to claim the Work Bonus if you are self-employed. It used to be that the income had to come from employment but now sole traders and self-employed business owners can claim it also.
And if you think it’s a good idea but the thought of a visit to Centrelink is too much for you, don’t worry, it’s applied automatically to your income. You will only need to tell Centrelink you’re working and they will do the rest.