Pension Boost from Jobs & Skills Summit September 2nd, 2022

The announcement came during the concluding remarks made by Prime Minister Anthony Albanese at today’s Job and Skills Summit in Canberra.

Under the deal, eligible seniors in receipt of a full or part Age or Veteran’s Pension will have an extra $4,000 added to their Work Bonus Income Bank. The Work Bonus system currently allows pensioners to earn up to $300 per fortnight before their pension starts to reduce under the effects of the income means test.

There have been no changes to the asset test, so only pensioners affected or likely to be affected by the income test will benefit. That figure is the gross before-tax amount and doesn’t include the 10.5 percent compulsory super payments that might also need to be paid.

The $300 must be derived from employment and can’t be passive income such as rental receipts, investment earnings or payments from a super fund.

Under the system , the fortnightly amount of unused work bonus credit is aggregated each fortnight up to a maximum of $7,800 per year.

It means for example, a pensioner that does temporary or seasonal work, could earn that amount before losing part of their age pension at the rate of 50c per dollar. For this reason, many have described the 50 cents per dollar reduction in fortnightly pension payments for those still working, as a form of tax.

Seniors groups have previously argued that it dissuades seniors from helping with Australia’s current shortage of skilled and experienced workers.

The $4,000 boost is subject to the passage of legislation and must be used by the end of June next year. At the time of writing there was no comment on the proposal from the opposition.

In theory, a pensioner who has been receiving an age pension for a year and has not made use of the work-bonus system already, has $7,800 sitting in their Work Bonus Income Bank. On passage of the legislation, that income bank would be lifted to $11,800.

It means a retiree working over the upcoming Christmas period could earn that amount from employment before losing any pensions under the income test. That’s probably why your local shopping centre’s Father Christmas has such a big grin. He or she can collect a few thousand over Christmas and not lose a cent of Age Pension.

If the legislation were passed by the end of September a senior could earn about $302 a week over the following 39 weeks until the end of June.

Under changes that occurred a few years ago, the scheme is no longer restricted to just wage or salary earners. Self-employed seniors can also access the scheme.