Work Bonus: earning while on the pension

The first $300 a fortnight of work income does not count — and unused amounts bank up to $11,800.

How the Work Bonus works

The Work Bonus is an incentive for pensioners to keep working. If you are an eligible pensioner who works, the first $300 a fortnight of employment income is not counted under the income test. It applies to employment income only — not to investment income, rent or deemed income — and it is applied automatically; you do not need to apply for it.

The Work Bonus sits on top of the income free area. A single pensioner whose only income is from work can therefore earn $526 a fortnight ($226 free area + $300 Work Bonus) and still receive the full pension under the income test.

The Work Bonus income bank

If you earn less than $300 from work in a fortnight, the unused amount builds up in a Work Bonus balance, up to a maximum of $11,800. That balance is then used to offset work income in later fortnights. New pensioners start with a $4,000 starting balance.

Worked example. A pensioner with the full $11,800 balance who then earns $5,000 in one fortnight has the first $300 covered by the fortnightly Work Bonus and the remaining $4,700 covered by the balance — so none of the $5,000 is assessed under the income test that fortnight, and the balance drops to $7,100.

What the Work Bonus does not do

The Work Bonus does not change the assets test: a large super balance or investment portfolio still counts there. It does not raise the pension above the maximum, and it does not apply to self-employment income in the same way as wages in every case — if you are self-employed, check how Services Australia treats your business income before assuming the full $300 applies. And remember: you must still report your employment income when you are paid.

Official links

Verify every figure on this page at Services Australia:

• Work Bonus — Services Australia