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3.4.7.110 Sample PBS calculations

Summary

This topic provides 4 examples of calculating a member's pension bonus.

Example 1

The following table outlines the relevant details:

Description Anthony's details
Date of birth 1 April 1932
Occupation Self-employed in hardware shop.
Work history
  • Worked until 24 December 2001.
  • Worked average 35 hours each week.
Gifting Never given away any income or assets.
Partner
  • Partnered to Mary (DOB - 1/8/1935).
  • Mary has not worked in their 40 years of marriage.
Registration in scheme Both Anthony and Mary registered as members in July 1998.
Claim Both claimed Age and the pension bonus within 13 weeks of Anthony's retirement on 10 January 2002.
Work test Anthony passed the work test throughout his period of deferment, i.e. until 10 January 2002.

Both Anthony and Mary were qualified for Age before the scheme commenced on 1 July 1998. Because they registered with Centrelink within the allowed 13 weeks, their deferment years started on 1 July 1998 and each 1 July thereafter. Anthony satisfied the work test and accrued the following bonus periods:

  • 1/7/98 - 30/6/99 = 1 year
  • 1/7/99 - 30/6/00 = 1 year
  • 1/7/00 - 30/6/01 = 1 year
  • 1/7/01 - 9/1/02 = 27 weeks and 4 days

Total years of deferral = 3 years + ((27 weeks × 7 days a week) + 4 days) ÷ 365 days a year = 3.529 years

or

Total = 3 + (((27 × 7) + 4) ÷ 365) = 3.529 years

Anthony and Mary's basic pension after application of the means tests is $5,850 per year each. Their bonus is calculated as follows:

Basic Age $ Multiplied by pension multiple Multiplied by years deferred
$5,850 0.094 × 3.529 3.529

$5,850 × 1.171 gives Mary and Anthony a total bonus of $6,847.50 each (rounded to nearest $0.10).

Note: All calculations are unrounded until the final figure.

Example 2

The following table outlines the relevant details:

Description Donald's details
Date of birth 15 March 1938
Occupation Donald worked as a part-time consultant to various companies.
Work history Donald worked until his 72nd birthday on 14/3/10, averaging 25 hours each week.
Gifting Never given away any income or assets.
Partner Single for the last 10 years.
Registration in Scheme Donald registered with Centrelink on 24 April 2003, and had no non-accruing periods of membership in the scheme.
Claim Donald claimed Age and the pension bonus on 16 March 2010.

Donald registered within 13 weeks of first qualifying for Age, so his deferment years start on 15 March 2003. Donald satisfied the work test and accrued the following bonus periods:

  • 15/3/03 - 14/3/04 = 1 year
  • 15/3/04 - 14/3/05 = 1 year
  • 15/3/05 - 14/3/06 = 1 year
  • 15/3/06 - 14/3/07 = 1 year
  • 15/3/07 - 14/3/08 = 1 year
  • 15/3/08 - 14/3/09 = 1 year
  • 15/3/09 - 14/3/10 = 1 year

Total = 7 full year bonus periods, however, a maximum of 5 can be used.

Donald's pension calculation after application of the means tests is $10,030.80 per year. Because Donald claimed after 20 September 2009 his pension bonus is calculated using base rate of pension and the pension supplement component for pension bonus (PSCPB). It is important to note that Donald's actual pension received and the pension calculation amount for pension bonus purposes will not be the same. His bonus is calculated as follows:

Basic Age and PSCPB calculation $ Multiplied by pension multiple Multiplied by years deferred
$10,030.80 0.094 × 5 5

$10,030.80 × 2.35 gives Donald a total bonus of $23,572.40 (rounded to nearest $0.10).

Example 3

The following table outlines the relevant details:

Description Sue's details
Date of birth 12 February 1938
Work history Sue worked part-time until her retirement on 17/6/03, averaging 23 hours each week.
Gifting Sue did not gift any more than $10,000 during her deferment.
Compensation Sue has never claimed compensation.
Partner Partnered to Karl until his death on 17/8/02.
Registration in Scheme Sue registered with Centrelink to defer her Age on 17/4/99.
Claim Sue claimed Age and the bonus on 18/6/03.

In the following examples, the rates used applied at 20 March 2007. Current rates can be found in the A guide to Australian Government payments booklet on the Services Australia website.

Sue registered within 13 weeks of first qualifying for Age, so her deferment years start on 12 February 1999. Sue satisfied the work test and accrued the following bonus periods:

  • 12/2/99 - 11/2/00 = 1 year partnered
  • 12/2/00 - 11/2/01 = 1 year partnered
  • 12/2/01 - 11/2/02 = 1 year partnered
  • 12/2/02 - 17/8/02 = 0.512 year (26 weeks and 5 days) partnered
  • 18/8/02 - 17/6/03 = 0.833 year (43 weeks and 3 days) single

Total = 4.345 bonus years.

This period is made up of:

  • 3.512 years partnered, and
  • 0.833 years single.

Sue's basic pension after application of the means tests is 80% of the maximum single rate of $13,652.60 per year.

  • 80% × $13,652.60 = $10,922.10

Her notional means tested partnered rate is also 80% of the maximum partnered rate of $11,401.00 per year.

  • 80% × $11,401.00 = $9,120.80

Her bonus is calculated as follows:

Basic Age $ Multiplied by pension multiple Multiplied by years deferred
$10,922.10 0.094 × 4.345 0.833
$9,120.80 0.094 × 4.345 3.512

$10,922.10 × 0.340 gives Sue a $3,715.60 bonus from her single years.

$9,120.80 × 1.435 gives Sue a $13,084.80 bonus from her partnered years.

This gives Sue a total bonus of $3,715.60 plus $13,084.80, meaning a total bonus of $16,800.40.

Note: All multiple calculations are unrounded. Pension figures have been rounded to the nearest $0.10.

Example 4

The following table outlines the relevant details:

Description Alan's details
Date of birth 10 August 1941
Occupation Part-time office worker.
Work history
  • Worked until 5 August 2009.
  • Worked an average 35 hours each week.
Gifting Never given away any income or assets.
Partner Single.
Registration in Scheme Alan registered on 21 August 2006.
Claim Alan contacts Centrelink on 15 September 2009 about lodging a claim but does not formally lodge until 25 September 2009.
Work test Alan passed the work test throughout his period of deferment, i.e. until 10 August 2009.

Alan registered within 13 weeks of first qualifying for Age, so his deferment years start on 10 August 2006. Alan satisfied the work test and accrued the following bonus periods:

  • 10/8/06 - 09/8/07 = 1 year
  • 10/8/07 - 09/8/08 = 1 year
  • 10/8/08 - 09/8/09 = 1 year

Total = 3 full year bonus periods.

Alan's basic pension after application of the means test is $8,050.50 per year. His Age start date is backdated to his initial contact with Centrelink which is 15 September 2009. This means that Alan's rate of Age is calculated using the calculation method from before 20 September 2009. His bonus is calculated as follows.

Basic Age $ Multiplied by pension multiple Multiplied by years deferred
$8,050.50 0.094 × 3 3

$8,050.50 × 0.846 gives Alan a total bonus of $6,810.70 (rounded to the nearest $0.10).

Act reference: SSAct section 93D How to calculate the amount of pension bonus, section 93G Pension multiple, section 93H Annual pension rate, section 93J Amount of pension bonus

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