New Work Bonus a win for age pensions
From today, age pensioners will keep more of their pension when they choose to work.
Under a new and improved Work Bonus, eligible pensioners can earn up to $250 a fortnight without it being taken into account as income under the pension income test.
In addition, any unused amount of the fortnightly $250 Work Bonus will accumulate in an employment ‘income bank’, up to a maximum of $6500. Credit in the ‘income bank’ can then be carried forward to future years and be used to offset employment income that would otherwise be taken into account under the pension income test.
The Work Bonus delivers on our election commitment to help age pensioners who work to earn more before their pension is affected. This reform will encourage older Australians to continue contributing their skills and knowledge by remaining in the workforce.
The Government recognises the important contribution senior Australians make to the community and the economy. This is why we are delivering on initiatives to encourage participation and involvement in community life.
The new Work Bonus is a win for senior Australians, giving them more incentive to work if they choose; it is a win for business, which will find it easier to tap into the skills of older workers; and it is a win for the Australian economy.
The new Work Bonus is on top of the significant increases to the pension the Australian Government has delivered as part of its major pension reforms since September 2009. Currently a single pensioner on the maximum rate is $128 better off per fortnight than they were before the reforms. And couples on the maximum rate are, combined, $116 better off per fortnight.
Also starting today, mature age workers (aged 50 years and over) with trade skills but no formal qualifications will have the opportunity to have their skills assessed and formally recognised to attain a qualification at Certificate III level or above through the More Help for Mature Age Workers initiative.
The Gillard Government is investing $30 million over three years in this initiative, which will help improve productivity and address skills shortages.
Case Study
Mary is an age pensioner who only works for six weeks a year as an accountant at tax time. During the six week tax season she earns $1,250 a fortnight, for a total of $3,750. As Mary has not worked at all in the year since the last tax season, she will have accumulated $6,500 of Work Bonus in her ‘bank’. Therefore during this tax season she will be able to keep the full $3,750 she has earned and it will not affect her pension. Mary’s pension will not be affected as she has no income that is assessed under the pension income test, despite earning $3,750 in the six week period.