How much can you earn before it affects your pension

If you’re at pension age or nearing pension age, chances are you might still be working or earning a little
Countries

If you’re at pension age or nearing pension age, chances are you might still be working or earning a little bit of money.

But how much can you earn before it affects your pension?

It turns out it’s not very much at all.

According to ASIC (Australian Securities and Investments Commission) if you’re single you can earn $164 per fortnight before your age pension drops.

The drop is 50 cents for every $1 you earn over $164.

So for example if you earn $600 a fortnight, your pension will drop by $218 per fortnight.

The maximum pension for a single is $794.80 (without supplements).

It’s a similar situation for couples.

If you’re a couple and both eligible for the age pension, you can earn $292 combined each fortnight before it affects your pension.

Earn anything more than that and your age pension will drop 50 cents for every dollar over the limit.

If you both earn $600 a fortnight, your combined pension will drop by $454 each fortnight.

For couples on the maximum pension of $1198.20 a fortnight (combined), that would bring it down to $744.20.

Even with the drop in your age pension, part-time work is still a great way to supplement your age pension until you’re ready to retire.

How much would you need to earn to lose the pension completely?

If you’re single you can still receive some form of part pension while earning up to $1911.80 a fortnight, while couples can still receive some pension while earning up to $2926.80 per fortnight.

Not sure when you are eligible for the age pension?

ASIC has an online calculator to help you out.

For example, if you were born in 1956 – you will be eligible for the age pension at 66 years and 6 months of age.

If you’re still not sure about the effect on your pension, it’s always important to check with Centrelink.

What do you think about the pension rate? Do you think it’s worth working part time while you’re on the pension?

Comments

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.