WORKING ON THE PENSION
Work Bonus: earn up to $11,800 a year without it touching your Age Pension
Most pensioners underestimate how much they can earn from work before Centrelink counts a cent of it. The Work Bonus — plus an income bank that carries unused amounts forward — makes part-time or casual work far more worthwhile than people assume.
OFFICIAL RULES CHECKED 22 AUGUST 2026
How the Work Bonus works.
The Work Bonus excludes the first $300 of your fortnightly employment income (or self-employment income involving active personal effort) from the Age Pension income test — on top of the normal income test free area you already get. Any unused amount accrues in an income bank you can draw on later.
| Feature | Amount |
|---|---|
| Fortnightly exemption | First $300 of employment income excluded from the income test |
| Maximum income bank balance | $11,800 |
| Effective annual earning room (bank + ongoing exemption) | Up to $11,800 per year on top of your normal income test free area |
| Who qualifies | Age Pension recipients over Age Pension age, and eligible Veterans’ Affairs pensioners |
| Applies automatically? | Yes — Centrelink applies it automatically once you report employment income |
Source: Services Australia — Work Bonus.
The income bank is the part people miss.
If you earn less than $300 in a fortnight — or nothing at all — the unused portion adds to your income bank, up to a cap of $11,800. That means someone who isn’t working now but starts a seasonal or casual job later can draw down a large bank balance and earn well above $300 a fortnight for a stretch before the income test bites.
Worked example
Linda, 69, receives the Age Pension and hasn’t worked in two years, so she has a full $11,800 income bank. She takes on 12 weeks of seasonal retail work over Christmas, earning $900 a fortnight. The first $300 each fortnight is exempt under the standard Work Bonus, and the remaining $600 is covered by her income bank — none of it affects her pension until the bank runs out.
Frequently asked questions
Does the Work Bonus apply to investment income?
No — it only applies to income from personal exertion, such as wages or active self-employment, not investment or rental income.
Do I need to apply for it?
No, Centrelink applies the Work Bonus and manages your income bank automatically once you start reporting employment income.
Does starting the Age Pension give me a bank straight away?
Yes — new Age Pension recipients start with a $4,000 income bank credit, then it grows by $300 a fortnight up to the $11,800 cap.
Can self-funded retirees use it?
Only if they’re receiving an eligible income support payment — it doesn’t apply if you’re not on the Age Pension or a similar payment at all.
Apply this to your own plan.
Pension Pilot’s calculator can model part-time work income against the Work Bonus and your income bank alongside your full Age Pension report, so you can see exactly how much you can earn before your pension changes. These figures are educational and should be checked against official Services Australia sources before you rely on them.