How many hours can I work after retirement in Australia?
Last updated on 10 April 2024
Key points:
- Special rules may apply to retirement if you receive an employment termination payment, genuine redundancy payment or payments from an approved early retirement scheme
- You may receive less super or fewer Age Pension benefits depending on how much you work, but aside from that, you can work as many hours as you would like if you’re willing to take the hit
- It may be worth considering how much money you would receive per hour at a new role in retirement and researching the rules associated with your super account fund
If you’ve ever wondered what it would be like to return to work during retirement, there are definitely some pros and cons to consider.
For one, the benefits of returning to work can give you an added sense of security and social interaction that you may be missing out on when you have left the workforce and are past the preservation age, which depends on the year you were born.
Date of Birth:
Before July 1, 1960 Preservation Age: 55
July 1, 1960 – June 30, 1961 Preservation Age: 56
July 1, 1961 – June 30, 1962 Preservation Age: 57
July 1, 1962 – June 30 1963 Preservation Age: 58
July 1, 1963 – June 30, 1964 Preservation Age: 59
From July 1, 1964 Preservation Age: 60
You can withdraw your super when you turn 65 — even if you haven’t retired, reach preservation age and retire or start a transition to a retirement income stream while continuing to work. At your Age Pension age, you can access the Age Pension to supplement your superannuation income, should you choose to withdraw.
Your preservation age differs from your Age Pension age though, which goes as follows — as of 2023:
Date of Birth:
From July 1, 1952 – December 31, 1953 Age Pension: 65 years and 6 months
From January 1, 1954 – June 30, 1955 Age Pension: 66 years
From July 1, 1955 – December 31, 1956 Age Pension: 66 years and 6 months
From January 1, 1957 – present Age Pension: 67 years
How much you earn whilst working in retirement may affect your superannuation income, depending on the rules of your superannuation fund and it may affect your Age Pension benefits.
According to the Department of Social Services, the pension income test is designed to encourage pensioners to supplement their pension with additional private income. A pensioner can receive an amount of private income before their pension rate starts to reduce. This is known as the ‘income-free area’ which, from July 1, 2023, is $204 for single-rate pensioners and $360 for couples — combined. For each dollar of income above the income-free area, the single pension is reduced by 50 cents.
Despite this, Australia’s ageing population – still needs to work to keep the economy in check as the latest Intergenerational Report predicted the care sector would account for approximately 15 percent of the nation’s gross domestic product, commonly referred to as ‘GDP,’ by 2062 – ‘63 — an increase of seven percent from the eight percent GDP in 2023.
The Report noted that future increases in productivity, especially in the services sector, would be crucial to strong economic growth over the coming years.
The Work Bonus supports and rewards pensioners over Age Pension age who work by allowing them to keep more of their pension when they earn income from work.
According to the DSS, the Work Bonus does not categorise the first $300 of fortnightly income from work as income under the pension income test. Any unused amount of the fortnightly $300 Work Bonus accumulates in the Work Bonus income bank up to a maximum amount of $11,800 and new pensioners over Age Pension age commence with a $4,000 Work Bonus income bank starting balance.
The amount accumulated in the income bank can be used to offset future income from work that would otherwise be assessable under the pension income test. The income bank amount is not time-limited; if unused it carries forward, even across years.
Pensioners do not need to apply for the Work Bonus. If you are a pensioner with income from work, you must keep Services Australia informed of your income. Pensioners can report income from work by contacting Services Australia on 13 23 00.
Do you hope to work after retirement? How does the Age Pension/super/Work Bonus balance influence your journey in life? Let the team at Your Retirement Living know and subscribe to the newsletter to learn more.
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