This week brings good news for pensioners. On 20 March 2019, the maximum total pension rate for single pensioners will increase to $926.20 a fortnight or $24,081.20 a year. The maximum rate for pensioner couples combined will increase to $1,396.20 a fortnight or $36,301.20 a year.
For cash strapped pensioners, some small casual work could be a lifesaver. Pensioners aged over pension age may access the Work Bonus, which operates in addition to the income test free area (currently $172 a fortnight for a single age pensioner). Under the Work Bonus, the first $250 of employment income a fortnight is not counted in the pension income test.
Pensioners are also able to build up any unused amount of the $250 fortnightly exemption to a total of $6,500. This amount can be used to exempt future earnings from the pension income test, so a pensioner could earn up to $6,500 a year extra without it affecting their pension. Any unused amount of the Work Bonus is held in a Work Bonus income bank. The income bank amount is not time-limited – if unused, it carries forward, even across years.
The Government announced in the 2018-19 Budget that the Work Bonus would be increased and extended. From 1 July 2019, both employed and self-employed social security pensioners over pension age will be able to earn up to $300 per fortnight from work before this income is assessed under the pension income test. Additionally, the Work Bonus maximum accrual amount will increase to $7,800.
A critical point for asset tested pensioners is the cut-off point where no pension becomes payable. Thanks to the pension increases the cut off point for a pensioner couple homeowner has increased to $853,000 ($1,060,000 non-– homeowner). The numbers for a single pensioner of $567,250 and $774,250 respectively.
It’s important not to overvalue your assets. For example, furniture should be valued at a garage sale prices, not replacement value. This puts a maximum of $5000 for most people’s furniture. Similarly, motor vehicles should be valued at wholesale value. An overvaluation of $50,000 could cost you $3900 a year in pension lost.