The Work Bonus is one of the most under-used features of the Age Pension system. It lets pensioners earn up to $300/fortnight from work without ANY income-test reduction, and any unused portion accumulates in a "bank" balance up to $11,800 that smooths out seasonal or lumpy work. New pensioners start with a $4,000 bank balance automatically. Centrelink applies it for you — you don't have to claim it. Verified against Services Australia — Work Bonus as at 13 June 2026.
The basic mechanics — $300/fortnight free
Without the Work Bonus, employment income would count toward the Age Pension income test from dollar one. The income free area is $218/fortnight (single) — so a pensioner earning $500/fn from a casual job would be $282/fn over the free area, losing 50¢ in the dollar = $141/fortnight off their pension.
With the Work Bonus, the first $300 of that $500 is exempted before the income test runs. So:
- Employment income: $500/fn
- Work Bonus exemption: -$300/fn
- Assessable employment income: $200/fn
- Plus other income (say $50/fn of deemed)
- Total assessable income: $250/fn
- Above $218 free area by $32 → 50¢ taper → only $16/fn off the pension.
Same job, $125/fn more in pocket every fortnight just from the Work Bonus.
The bank balance — for lumpy or seasonal earnings
Most pensioner work isn't a steady $300/fortnight. It's a casual shift here, a busy month there, then quiet. The Work Bonus bank accommodates that:
- Every fortnight you earn LESS than $300 from employment, the unused exemption rolls into your bank balance (e.g. $0 earned = $300 banks; $200 earned = $100 banks).
- Bank cap: $11,800. Once you hit the cap, you stop accumulating.
- When you earn MORE than $300/fn, the excess employment income is offset against your bank balance FIRST. Only what's left after the bank is exhausted counts as assessable income.
This means a pensioner who didn't work for the first 6 months of the year would have built up roughly $300 × 13 fortnights = $3,900 in unused exemption (on top of the $4,000 starting bank if they're new) — a total $7,900 buffer to absorb a busy summer or seasonal contract.
The starting bank — $4,000 for new pensioners
When you first qualify for the Age Pension, Carer Payment or Disability Support Pension, your Work Bonus bank balance starts at $4,000. This is automatic — no application needed. You'll see it on my.gov.au within a fortnight or two of pension grant.
The $4,000 buffer is deliberate: it recognises that many new pensioners are still finishing off existing work commitments or have a lump-sum payment coming in. They shouldn't lose pension dollar-for-dollar on income they would have earned anyway.
What counts and what doesn't
Counts as employment income (eligible for Work Bonus):
- Wages, salary, bonuses, commissions paid through PAYG.
- Director's fees (where you're actually working as a director, not just receiving director's loan repayments).
- Net self-employment income from gainful work — your active labour (consulting, trades, small services).
- Paid leave from an employer (annual leave, sick leave, long-service leave).
Does NOT count as employment income (no Work Bonus exemption; counts in full or via deeming):
- Rental income (counted in full via the income test).
- Dividends, interest, term-deposit income (counted via deeming, not as actual income).
- Foreign pensions including UK State Pension, NZ Super, US Social Security.
- Defined-benefit super income streams (counted via the actuarial formula).
- Account-based pension income (counted via deeming on the balance, not the actual payments).
- Trust distributions you receive as a beneficiary but didn't actively work for.
Worked example 1 — Brian, steady part-time work
Brian is 70, single, on the Age Pension. He works 12 hours/week as a paid driver for the local council shuttle bus, earning $650/fortnight.
- Employment income: $650/fn
- Work Bonus exemption: -$300/fn
- Assessable employment income: $350/fn
- Brian has $40,000 in the bank — deemed income at 1.25%/yr = $500/yr = $19/fn
- Total assessable income: $369/fn
- Income free area: $218/fn → over by $151
- 50¢ taper: -$75.50/fn
- Brian's pension: $1,200.90 − $75.50 = $1,125.40/fn
- Plus wages: Brian takes home $1,125.40 + $650 = $1,775.40/fn ($46,159/yr)
Without the Work Bonus, Brian would lose another $150/fn off his pension, taking him to about $1,625.40/fn ($42,259/yr). The Work Bonus is worth ~$3,900/yr to him.
Worked example 2 — Glenda, seasonal work, bank in action
Glenda is 68, single, on the Age Pension. She doesn't work most of the year. From January to March each year she works as a casual ranger at a summer-camp earning $1,200/fortnight for 6 fortnights (total $7,200 over the season).
Before the season (after 22 quiet fortnights):
- 22 × $300 = $6,600 added to bank since last December.
- Bank balance ~ $4,000 starting + $6,600 = $10,600 (under the $11,800 cap).
Through the summer season (6 fortnights of $1,200 each):
- Each fortnight, $1,200 employment income.
- Work Bonus exemption: $300/fn standard.
- Excess: $900/fn.
- The bank pays the excess first: $900/fn × 6 = $5,400 drawn from bank.
- Assessable employment income through the entire season: $0.
Glenda receives the full Age Pension through the whole 6-month season AND her $7,200 of wages. She just had to take the time off in autumn to let the bank rebuild. If she did this every year, her bank stays in roughly the same range — the Work Bonus is structured exactly to enable this pattern.
What if I'm partnered?
Each member of a couple has their OWN Work Bonus and their OWN bank balance. They don't share. So a couple where both work casually can have 2× $300/fn = $600/fn of employment income exempted from the income test, with combined bank balances up to $23,600.
This often matters more than you'd expect — many retired couples have one member doing some part-time consulting and the other doing some casual hospitality or driving work.
Where to check + claim
- The Work Bonus is automatic. You don't apply for it; Centrelink applies it when you report employment income via my.gov.au or your phone.
- Check your bank balance at my.gov.au → Centrelink → Income and Assets → Work Bonus.
- Report employment income each fortnight — Centrelink can't apply the bonus if you don't report.
- If you stop working for a long stretch, the bank just builds up to the $11,800 cap. There's no penalty for not using it.
- For self-employed work, lodge income via your tax return + report progressively each fortnight; Services Australia averages it to fortnightly amounts.
See also: our Age Pension guide, Commonwealth Seniors Health Card guide, and Downsizer contribution guide.