Pensioners win in Parliament
Legislation passed in Parliament today deliver’s on the Australian Government’s election commitment to help age pensioners keep more of the money they earn from work.
The new Work Bonus will be available from 1 July this year, allowing age pensioners to earn more from work before it affects their pension.
We expect about 30,000 pensioners will benefit, particularly pensioners who work casually or seasonally throughout the year.
In the past many age pensioners have wanted to undertake work but have been concerned about the impact on their pension. The new Work Bonus will give pensioners the security to try work, if they choose to do so.
Under the new rules, pensioners will be able to earn up to $250 a fortnight without it being assessed as income under the income test. This means they will have more money in their pockets each fortnight.
Pensioners will also be able to build up any unused amount of the $250 fortnightly exemption in an ‘income bank’ to a total of $6,500.
The ‘income bank’ can be used to exempt future earnings from the pension income test, so that a pensioner could earn up to $6,500 a year extra without it affecting their pension. Any unused amount of the income bank can be carried forward across years.
Age pensioners will not have to apply for the Work Bonus but will need to continue to report their employment income to Centrelink in fortnights that it changes, so their Work Bonus can be calculated.
The new Work Bonus is on top of the significant increase to the pension the Australian Government delivered as part of its major pension reforms in September 2009. Currently a single pensioner on the maximum rate is $128 better off per fortnight than they were before the reforms. And couples combined on the maximum rate are $116 better off per fortnight.
The Government is investing $93.7 million over four years to deliver the new Work Bonus.