A significant change is coming for age pension recipients, offering them the opportunity to work more hours without worrying about their pension payments being impacted.
These changes are part of the government’s Employment White Paper and aim to support older Australians who want to work more while ensuring their age pension remains intact. The new measures are also expected to address the nation’s growing skills and labour shortages.
The changes include:
Starting from January 1, 2024, pending the passage of legislation, all new pension entrants over Age Pension age and eligible Veterans will have a starting Work Bonus income bank balance of $4000 rather than $0, and existing and new recipients will retain the current elevated maximum Work Bonus balance limit of $11,800 rather than $7800.
These changes hold promise for older Australians, presenting an attractive incentive to explore or expand engagement in paid employment.
In practical terms, the new measure means eligible recipients can earn more from work before it impacts their pension payments, providing seniors with greater choice and financial flexibility in their retirement years.
The increase to the Work Bonus income bank was temporarily introduced after last year’s Jobs and Skills Summit.
Treasurer Jim Chalmers said the new measures are “about putting the right incentives in place to get more Australians into work”.
“We want to make sure the stepping stones are in place to enable more Australians to take up a job or work more hours,” Chalmers said.
Central to the Employment White Paper is the goal of a secure, fairly paid job for everyone who wants one and a qualified worker for every employer who needs one.
— Jim Chalmers MP (@JEChalmers) September 25, 2023
Minister for Social Services Amanda Rishworth highlighted that the changes “will ensure pensioners know they are supported and rewarded if they choose to work”.
“Around 195,000 people commence on the Age Pension each year and will benefit from the $4000 Work Bonus starting balance. If these pensioners choose to take up work or work more their earnings will have less of an impact on their pension,” Rishworth said.
“Extending the length and expanding eligibility for the employment income nil‑rate period will help smooth the transition from income support to employment and we hope will result in more people getting back into work and staying in jobs for longer, without the fear that the safety net won’t be there if they need it again.”
The recent changes to work incentives follow the recent increase in age pension payments that is expected to provide some much-needed relief to the millions of retirees facing the pressures associated with the ever-rising costs of daily living.
Those on the age pension were among the over 5.5 million Centrelink recipients who received a boost to their social security payments as indexation of their payments took effect.
As of Wednesday, September 20, recipients of the Age Pension, Disability Support Pension and Carer Payment recevied an increase to their fortnightly payments. The single pension rate increased by $32.70 to $1096.70, and the rate for couples combined increased by $49.40 to $1653.40. These figures include Pension Supplement and Energy Supplement.
In addition to the rise in payments, limits for Commonwealth Seniors Health Card recipients was also indexed, increasing by $5400 to $95,400 per annum for singles and by $8640 to $152,640 per annum for couples combined.
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