Work Bonus Age Pension 2025: Everything You Need to Know About the Work Bonus for 2025

Work Bonus Age Pension 2025: Everything You Need to Know About the Work Bonus for 2025

The Work Bonus is a government initiative designed to help Age Pension recipients and certain other pensioners keep more of their pension while earning income through work. Here’s a detailed guide on who can access this benefit, how it works, and how it can enhance your financial situation.


Who Can Get the Work Bonus?

You may be eligible for the Work Bonus if you are of Age Pension age and receive one of the following payments:

  • Age Pension
  • Carer Payment
  • Disability Support Pension (DSP)

However, specific conditions apply:

  1. If you’re on Carer Payment or DSP, you must meet the usual work-related rules for these payments.
  2. You cannot receive the Work Bonus if you are on the transitional rate of pension.

Good to know:
You don’t need to apply for the Work Bonus separately. Centrelink will automatically apply it to your eligible income if you meet the requirements. Simply declare your income, and the Work Bonus will be applied.

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How Does the Work Bonus Work?

The Work Bonus reduces the amount of your income assessed under the pension income test, which can increase the amount of pension you receive.

If You Work

  • Fortnightly Offset:
    Every fortnight, $300 of your eligible income is excluded from the income test.
  • Work Bonus Balance:
    If your income is less than $300 in a fortnight, the unused portion is added to your Work Bonus balance. This balance can be used to offset income in future fortnights.
  • Maximum Accrual:
    The maximum Work Bonus balance you can accrue is $11,800.

Example:

  • If you earn $200 in a fortnight, $100 will be added to your Work Bonus balance.
  • If you earn $500 in a fortnight, the first $300 will be offset, and only $200 will be assessed under the income test.

If You Don’t Work

  • You still accrue $300 per fortnight to your Work Bonus balance, up to the maximum of $11,800.
  • This balance can be used when you start working, allowing you to earn more without reducing your pension.

Types of Income Covered by the Work Bonus

The Work Bonus applies to income from:

  • Employment: Wages earned from part-time or full-time jobs.
  • Self-Employment: Profits from running your own business or freelancing.

Important: Ensure you declare all your earnings to Centrelink so the Work Bonus can be correctly applied.


How Your Partner’s Income Affects the Work Bonus

If you have a partner who is earning income, their assessable income under the income test may also change. For example:

  • The Work Bonus may reduce the impact of your partner’s income on your combined pension payments.
  • Centrelink will automatically calculate how the Work Bonus applies in this scenario.

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Work Bonus in Action: Real-Life Examples

Example 1: Income Below $300 Per Fortnight

Mary earns $200 per fortnight from casual work. Since this amount is below the $300 threshold, her income is reduced to $0 for the income test. The remaining $100 is added to her Work Bonus balance.

Example 2: Income Above $300 Per Fortnight

John earns $500 per fortnight. The Work Bonus offsets $300 of his income, leaving only $200 to be included in the income test.


Why the Work Bonus is Beneficial

  • Encourages Employment: Enables pensioners to supplement their income without significantly affecting their pension entitlements.
  • Flexibility: The ability to accrue a Work Bonus balance makes it easier for those with irregular work patterns to benefit.
  • Increased Financial Security: By reducing the income tested, you can retain a higher rate of pension while earning extra income.

Maximize Your Work Bonus

Even if you’re not working now, your Work Bonus balance will continue to grow. This allows you to take full advantage of the bonus when you choose to return to work.

Stay informed about your income and Work Bonus eligibility by regularly checking your Centrelink online account through myGov.


Start working smarter, not harder, with the Work Bonus in 2025!

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