Page 9 - Wealth-Adviser-Issue-137 (FWP)

ISSUE 137
MAY 2026

WORKING PAST 65

How Tax, Super, and

Centrelink Now Fit Together depositphotos.com

BY WEALTH ADVISER was abolished some years ago. The downsizer contribution
age has been progressively lowered. Older guidance circulat-
he number of Australians working past their Age ing in the financial press, in forums, or from well-meaning
Pension age has been rising for two decades, and the relatives may not reflect the current position. The article
Ttrend is unlikely to slow. Some people are working past notes the most consequential changes as they come up, but
65 by choice — consulting, board work, a business they enjoy the broader point is that the framework has been catching
too much to leave, a part-time arrangement that gives the up with the reality that many Australians no longer retire at
week structure. Some are working out of necessity — a super the moment they become eligible to.
balance that hasn’t done the job, a mortgage that’s lingered,
a need to support adult children. Many are somewhere in be- The work bonus and the income test
tween, working not because they have to but because retiring For Australians of Age Pension age who are still working,
entirely doesn’t appeal, at least not yet. the single most consequential rule is the Centrelink work
The article that follows applies to all three groups. The bonus. It is also one of the least well understood, even by
tax, super, and Centrelink rules that govern working past people receiving it.
Age Pension age are the same regardless of why a person is Under the work bonus, the first $300 a fortnight of em-
working, even though the strategic implications of those ployment income an eligible Age Pensioner earns is simply
rules depend heavily on the person’s reasons and circum- disregarded under the income test. It is excluded from the
stances. assessment entirely — set aside before the income test starts
It’s also worth saying at the outset that the rule frame- running.
work has shifted substantially over the past few years. If the person earns less than $300 in a fortnight — or
Several long-standing restrictions on older Australians’ doesn’t work at all that fortnight — the unused portion of
financial decisions have been wound back. The work test the $300 accrues in a work bonus “income bank” up to a
has been partially removed. The work bonus has been made maximum balance of $11,800. The balance can then be used
more generous. The age limit on Superannuation Guarantee in future fortnights when employment income is higher.

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