18.104.22.168 Bonus periods for PBS
What constitutes a bonus period (1.1.B.80)?
The duration of a bonus period corresponds to each 365 days of accruing membership (1.1.A.20) of the scheme. This will not necessarily be a consecutive period of 365 days, as the period of accruing membership may be broken by periods of non-accruing membership (1.1.N.90).
For the bonus period to count for the purposes of the scheme, the member or their partner, (if both are registered members of the scheme), MUST satisfy the work test.
Policy reference: SS Guide 22.214.171.124 PBS Work Test
Limit on bonus years
A member may accrue as many bonus periods as they wish provided they are consecutive. However, for the purposes of the scheme, a maximum of 5 full year bonus periods can be used to calculate the amount of the bonus payment.
Example: Dorothy is a registered member of the PBS. She works full-time for a further 7 years after reaching age pension age. She can only accrue a maximum of 5 full year bonus periods.
If more than 5 bonus periods are accrued, only the last 5 full year periods are used when calculating the bonus. This is significant for people whose couple status has changed while they were members of the scheme or for members considering reducing their hours of work.
Example: A member who accrued a 5-year bonus period, was partnered for the first 2 years and single for the remaining 3 years. Three-fifths of their pension bonus will be paid having regard to the 'annual notional single pension rate at grant', and two-fifths of the bonus will be paid having regard to the 'annual notional partnered pension rate'.
Act reference: SSAct section 92T(4) Bonus periods must be consecutive, section 93J(3) Annual notional single pension rate …, section 93J(4) Annual notional partnered pension rate …
Part year bonus periods
If the period immediately before claiming the bonus is not a full year bonus period of 365 days, then the part year period can be considered ONLY if the member has already accrued AT LEAST 1 full 365 day bonus period beforehand.
Example: A member who only accrues 222 days is NOT entitled to any bonus.
For a part year bonus period to be counted the member MUST meet the work test requirements for that period on a pro-rata basis.
Act reference: SSAct section 92T(3) Part-year bonus period
Age limit to accrue bonus
Members can only accrue bonus periods up to the age of 75 years.