Work bonus boost

It’s a significant victory for older Australians that the temporary increase to the Work Bonus introduced last year has now been made permanent and working pensioners will now be up to $2000 better off under the scheme.

At the beginning of the year the Work Bonus officially increased by $4,000 from $7,800 to $11,800 per annum, permanently.

While the new system has been called out by some seniors advocates as being a bit complicated, there is no need for pensioners to apply separately for any part of the Work Bonus. As with other Age Pension obligations, it is only necessary to declare income.

Welfare recipients will also get to hold onto their concessions for longer if they get a job.

Currently, a job seeker who finds work can retain access to government concessions for up to 12 weeks. This will double to 24 weeks from 1 July this year to further smooth out the transition to work and avoid unintended consequences if a person loses their job.

How the Work Bonus works

Under existing rules the first $300 of fortnightly income from work is not counted under the pension income test, with any unused part of the $300 fortnightly Work Bonus accrued in a Work Bonus income bank.

The permanent $4,000 increase to the Work Bonus is in addition to the $7,800 a pensioner can earn each year without impacting their pension. But unlike the regular Work Bonus, the additional $4,000 is applied at the start of the year to your Work Bonus income bank.

This is a good thing because it means someone who works a lot in a short period of time will not be unfairly penalised.

The decision to make the temporary increase in the Work Bonus permanent means a person can earn $453 per fortnight (on average) and not affect their pension.

It’s important to also note that the Work Bonus operates in addition to the pension income free area, which is currently $204 a fortnight for single pensioners and $360 a fortnight for couples combined.

If you don’t have any investment income or savings, this would mean you could earn even more each fortnight without losing your pension (all told, up to a total of $657 per fortnight for a single pensioner).

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