Working in retirement
Work Bonus is an incentive for pensioners to work past retirement age.
It allows pensioners to earn more from working each fortnight before their pension payment rate starts to reduce.
Retirement can often feel like a lifetime coming. But once you actually get there, it can be both exciting and a little bit daunting. It’s a major life adjustment, and particularly so if you’ve spent decades in the workforce.
It’s important to remind your client that it’s never too early to start planning for retirement or considering if they’ll continue to work past pension age. If your client would like to keep a foot in the door with their current job or pick up new work in the future, but they’re not sure what this means for their Centrelink pension, then the good news is they may benefit from Work Bonus.
Work Bonus is an incentive for pensioners to work past retirement age. It allows pensioners to earn more from working each fortnight before their pension payment rate starts to reduce.
To be eligible for Work Bonus, your client must be of Age Pension age (currently 66 years) and receiving either an eligible payment, such as Age Pension, Carer Payment or Disability Support Pension.
How does it work?
Work Bonus allows people to earn up to $300 a fortnight from employment without it affecting their pension rate.
If someone earns less than $300 in a fortnight, any leftover Work Bonus will accrue in their Work Bonus balance. For instance, if your client earns $0 in a fortnight, Services Australia will add the full $300 to their Work Bonus balance. Services Australia will stop adding to their Work Bonus balance once it reaches a maximum of $7,800.
Your client can use their Work Bonus balance to offset higher future earnings. For instance, if they earn more than $300 in a fortnight, Services Australia will use the first $300 of their Work Bonus to reduce their income, and then use any Work Bonus balance to reduce the remaining income.
After your client has completely used up their Work Bonus balance, they’ll start to be credited again with up to $300 of Work Bonus each fortnight.
Work Bonus applies to income received from working for an employer or from self-employment. If your client is self-employed, they need to be actively participating in their own employment, meaning doing work that involves effort, such as bookkeeping, cleaning duties, lawn mowing or even driving an Uber.
If your client is thinking of taking up some work, they don’t need to apply for Work Bonus. Services Australia will apply the Work Bonus to their income test automatically if they meet all the eligibility requirements. However, if they’re self-employed, it’s best to speak with Services Australia first, so we can determine how they will need to report their income.
For more information about Work Bonus, click here.
Original Author: Produced by Hank Jongen and published on 15/04/2020 Source