3.1.15.50 Work bonus - history

Introduction

As part of the 2009-10 Budget, the work bonus was introduced from 20 September 2009.

The work bonus is used to reduce the amount of assessable income from employment, or from self-employment from gainful work (1.1.G.25), in an instalment period. An instalment period is a period of a maximum of 14 days.

The work bonus applies to recipients who are:

• age pension age, and
• have their rate of payment of pension or benefit worked out with regard to the income test module of a rate calculator at SSAct section 1064 or section 1066.

From 20 September 2009 to 30 June 2011:

• Only 50% of the first $500 of employment income earned in a 14 day instalment period was assessed under the income test. Any employment income over $500 was added to this reduced amount and was assessed under the income test for the instalment period.
• If a person's employment income for a 14 day instalment period was less than $500, only 50% of the person's total employment income for that instalment period was assessed under the income test.

Employment income is income from remunerative work undertaken by the person as an employee in an employer/employee relationship. This includes but is not limited to salary, wages, commissions and employment related fringe benefits.

From 1 July 2011, an improved work bonus was introduced. Under the improved work bonus:

• the first $250 of employment income earned in a 14 day instalment period was excluded from the income test, and
• if a person's employment income for a 14 day instalment period was less than $250, the difference between the amount earned and $250 accrued in the pensioner's employment income concession bank, up to a maximum of $6,500.

From 1 July 2019, further changes to the work bonus were introduced. Under the changes:

• the work bonus was increased, so that the first $300 of employment income earned in a 14 day instalment period is excluded from the income test
• the maximum work bonus income concession bank was increased from $6,500 to $7,800, and
• the work bonus was extended to include income from gainful work from self-employment, as well as income from employment.

Gainful work is work for financial gain or reward (other than as an employee), where the work involves personal exertion on the part of the person concerned.

From 7 December 2020, changes were made to the assessment of employment income for social security purposes. As part of these changes, the work bonus is now determined based on when a recipient is taken to have been paid employment income as opposed to when it is earned. This change only applies to income from employment. Income from gainful work from self-employment continues to be assessed when first earned, derived or received.

From 1 December 2022 to 31 December 2023, a one-off upfront credit of $4,000 was applied to the work bonus balance of all pension recipients of age pension age, up to a maximum total work bonus balance of $11,800.

From 1 January 2024, the increased maximum work bonus income bank balance of $11,800 was made permanent. In addition, from 1 January 2024, all people commencing on an eligible payment will receive an upfront $4,000 starting credit in their work bonus income bank.