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Assistance for working age pensioners


Legislation has passed that allows Age Pensioners to participate more in the workforce. $4,000 work bonus increase On 1 December 2022, a one-off $4,000 income credit will be added to the Work Bonus income bank of those at least pension age and in receipt of an Age Pension, Disability Support Pension or Carer Payment. Under the Work Bonus, the first $300 of fortnightly income from work is not assessed under the pension income test. Any unused part of the $300 fortnightly Work Bonus accrues in the Work Bonus income bank and can be used to offset future income from work.

Currently, the Work Bonus income bank is capped at $7,800. This will temporarily be increased to $11,800 until 31 December 2023. Effective 1 January 2024, any amount in the Work Bonus income bank that exceeds $7,800 will be removed and no longer available to offset future income from work.


The following table outlines the impact on clients (assuming no change to their client scenario):

Client scenario

Will they benefit from an increase in the Work Bonus income bank?

Asset tested

No

Income from work of less than $300 pf

No

Income tested and earning income from work of more than $300 pf

Yes*

*Assumes a nil balance in the Work Bonus income bank before this change.


For income tested clients (eligible for the Work Bonus), those earning:

  • more than $300 pf may see a temporary increase in entitlements, and

  • less than $300 pf may consider temporarily taking on additional paid work without impacting their Centrelink entitlements.

Regaining access to Age Pension made simpler

From 1 January 2023, those who lose their Age Pension due to the income test (and partners in receipt of eligible social security entitlements) will not have to reapply for the Age Pension for up to two years. At the time Age Pension ceases to be payable, the person’s ordinary income must include income for remunerative work the person themselves has undertaken. This work must have been performed in Australia as an employee. To be eligible, they must also continue to qualify for the income support payment had they not failed the income test. Currently, the Age Pension cancels after 12 weeks of exceeding the income limit.


Retention of Pensioner Concession Card

From 1 January 2023, Age Pensioners, Disability Support Pensioners, and their partners (who also hold a Pensioner Concession Card) will be able to retain their Pensioner Concession Card and its associated benefits for two years following the cessation of their income support payment due to the income test. At the time Age Pension ceases to be payable, the person’s ordinary income must include income for remunerative work the person themselves has undertaken. This work must have been performed in Australia as an employee. To be eligible, they must also continue to qualify for the income support payment had they not failed the income test. Currently, Age Pensioners and Disability Support Pensioners lose eligibility for the pension concession card after 12 weeks and 52 weeks of their pension ceasing due to their level of income respectively. If temporarily absent from Australia, the maximum qualification period of up to six weeks still applies.


Article courtesy of MLC Technical Support

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