Call for change: Is it time to reform the Work Bonus for pensioners?
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If you’re a senior on the Age Pension and still keen to work a bit, you might be feeling frustrated. Under current rules, you can only earn about $300 a fortnight from a job before your pension starts getting cut. As one outraged pensioner rather colourfully put it, $300 a fortnight is “three quarters to seven eighths of b***** all” these.
In other words, it’s not much – especially with the cost of living climbing and older Aussies often needing to stretch every dollar. Now, there’s a growing call to reform the “Work Bonus” system. Advocates say it’s time to give older Australians a fair go: let them work a bit without being penalised so harshly.
In this article, we’ll break down what the Work Bonus actually is, why seniors are calling for change, and what could be done to fix it. So grab a cuppa, get comfy, and let’s dive into this important issue affecting Aussie pensioners.
Let’s start with the basics: What is the Work Bonus? In simple terms, it’s a special rule in the Age Pension system that lets pensioners earn a bit of income from work without it reducing their pension straight away.
According to Services Australia, “if you’re an eligible pensioner, the Work Bonus may help you earn more income from working without reducing your pension”. Essentially, the first part of your wages (up to a certain amount each fortnight) doesn’t count when Centrelink works out how much pension to pay you. This encourages older Australians to keep a foot in the workforce by softening the pension income test.
How it works in practice: For each fortnight, a pensioner gets a $300 “credit” that can offset their employment earnings. Earn up to $300 in a fortnight, and none of that will count against your pension.
If you earn less than $300, the unused portion carries over into a personal “Work Bonus balance” (also called an income bank). This balance can build up over time (for example, if you’re not working for a while, the $300 credits keep accumulating) and later be used to offset larger amounts of income.
There is a cap on that accumulation: as of now the maximum Work Bonus balance is $11,800. In other words, you can stockpile up to $11,800 worth of unused credits, which can then allow you to earn the same amount in the future without affecting your pension.
Importantly, the Work Bonus isn’t an extra payment to you – it simply lets you keep more of your pension by not counting some of your wages. You don’t have to apply for it or fill out any special forms; Centrelink applies it automatically as long as you report your income and you meet the eligibility criteria (basically, you must be old enough for Age Pension and actually receiving a qualifying pension payment).
To illustrate, the Department of Social Services (DSS) gave this example: a single age pensioner can currently earn a total of about $518 a fortnight from work and other sources and still get the full Age Pension. How’s that figure calculated? It’s the sum of the $300 Work Bonus plus the ordinary $218 income-free area that all single pensioners get (the income-free area is a standard amount you can earn without reducing your pension, separate from the Work Bonus).
For a pensioner couple, they can earn about $680 combined per fortnight before their pension starts tapering off (their combined income-free threshold is a bit higher). If they go over those amounts, the pension reduces by 50 cents for every dollar of income over the limit.
A little history: The Work Bonus scheme isn’t new. It was first introduced back in 2009 as a way to help older people keep working if they wanted. At the start, it was a bit more complicated – it allowed 50% of the first $500 of income to be disregarded.
Source: Services Australia / YouTube
In 2011, that was simplified to just disregarding the first $250 of income, and the concept of a “concession bank” (the carry-over balance) was added. Fast forward to 2019, and the government finally boosted the fortnightly exempt amount to $300, which is where it stands today, and expanded the rules to count self-employment as eligible (so it’s not just wages from an employer, but also income from things like sole trader work can qualify as “gainful work”). Notably, when they increased it to $300 in 2019, they did not index it to inflation – it was a flat increase, and it’s been flat ever since.
Recent tweaks: In late 2022, during the COVID-era economic recovery, the government realized extra incentives might be needed to entice pensioners into critical workforce gaps. They gave a one-time boost of $4,000 to everyone’s Work Bonus balance in December 2022. That allowed those who had already retired to suddenly have more earning room banked, and any new Age Pensioners coming onto the system through 2023 also got a $4,000 starting credit added to their Work Bonus bank.
This was initially meant to be temporary – the plan was to end that boost after 2023 – but in September 2023 the government decided to make it permanent. So from 1 January 2024 onward, the rules have been locked in: all new Age Pensioners get that $4,000 Work Bonus opening balance, and the maximum income bank stays at $11,800 for everyone.
In practice, this means an eligible pensioner who hasn’t been working could potentially earn up to $11,800 in a year all at once (or in a short period) without losing any pension – because they’d have accumulated the full credits to offset it. That’s on top of the regular fortnightly $300 disregard and the usual income-free thresholds indexed each year.
So far, so good? Okay. The Work Bonus sounds like a pretty fair deal on paper – a bit of extra breathing room for those who want to work. But here’s the rub: many seniors say $300 a fortnight isn’t what it used to be. Life’s gotten a lot more expensive since 2019, and that figure hasn’t budged. Next, we’ll look at why growing numbers of pensioners (and advocates) are calling for the Work Bonus to be reformed – and what changes they want.
Ask a few pensioners what they think of the $300 Work Bonus limit, and you’ll likely hear some choice words. Greg Jarvis, a 70-year-old Age Pension recipient from Ferntree Gully in Melbourne’s outer east, has emerged as a particularly vocal critic.
He didn’t mince words: “These days ($300 a fortnight) is three quarters to seven eighths of b***** all,” Mr. Jarvis said bluntly. His colourful phrasing earned him quite a bit of attention in the local press, and it struck a chord with many seniors who feel the same. Three hundred dollars a fortnight – that’s about $150 a week – just doesn’t go very far in 2025. Not when you consider rising prices for groceries, petrol, medical expenses, you name it.
Source: Services Australia / YouTube
Mr. Jarvis isn’t complaining just for the sake of it; he’s started a movement called “Fair Go for Working Pensioners” to push for changes. What is he actually asking for? In a nutshell, raise the Work Bonus from $300 to $500 a fortnight, and make sure it keeps pace with the cost of living.
He argues that the $300 figure needs to catch up to today’s reality and then be indexed (like the pension itself is indexed) so it won’t fall behind again. His goal of a $500 fortnightly cap (instead of $300) would effectively allow pensioners to earn significantly more from working without penalty. In fact, if you add the normal income-free area to a $500 Work Bonus, a single pensioner could earn roughly $718 per fortnight and still get the full pension, compared to the current ~$518. Over a year, that’s about $5,200 more income they could earn without pension reductions – nothing to sneeze at for someone on a fixed income.
Why $500? Jarvis and his supporters believe this number is closer to the mark for making work “worth it.” He points out that the Work Bonus hasn’t changed since July 2019, while in the same period wages and prices have kept climbing.
“Since 2009, Australian wages have gone up 64-65 per cent, inflation has been 50 per cent, and the Work Bonus has gone up 20 per cent,” he noted. Indeed, the last increase (from $250 to $300) happened four years ago in mid-2019. We all know how much has happened since 2019 – a pandemic, supply chain chaos, inflation spikes – and older Australians on the pension have felt the pinch. By not indexing the Work Bonus, its real value erodes each year. $300 in 2019 bought a lot more than $300 today, so effectively the incentive shrinks over time.
Jarvis also makes a practical point: beyond that $300 mark, any extra earnings lead to a 50% pension clawback, which is quite steep. “Anything over $300, your pension is reduced by 50 cents in the dollar… the incentive for someone on a pension to go out and work is just eroded,” he said.
You can see why that might discourage someone from taking on an extra shift – earn $100 over the limit, and you lose $50 of pension. It creates a feeling of “why bother working?” because you only keep half of what you earn beyond a certain point (and that’s before even considering taxes, though many pensioners don’t earn enough to pay income tax – more on that later).
In fact, Jarvis mentions a common response he hears: “the common response is that [pensioners are] told to work for ‘cashies’”. In other words, some seniors feel their only viable option is to work under the table to avoid losing pension payments and paying tax.
Mr. Jarvis understandably doesn’t endorse this – “that leaves the employer and the employee open for… litigation” and other risks, he said, and it’s not exactly legal. But the fact that people are even considering under-the-table work points to a system that’s not quite hitting the mark. If following the rules “just isn’t worth working” (in Jarvis’s words) so that people resort to breaking them, that’s a red flag that the rules need fixing.
To sum up the grievances driving this push for reform, let’s list the key issues as highlighted by seniors like Mr. Jarvis and others:
Because of all this, participation rates of pensioners in work are actually quite low. Only a small percentage of Age Pension recipients report any employment income.
Government data showed that when the Work Bonus was last increased in 2019, about 4.3% of pensioners had earnings; by March 2025 that fell to around 3.5%. That’s right – less than one in twenty Age Pensioners are working and reporting wages. It’s a figure that has actually declined, possibly due to COVID disruptions and maybe because the current $300 just isn’t enticing enough to bring people back into work. Most seniors simply don’t bother working under these conditions (or can’t for other reasons), and those who do often work minimal hours to stay under the threshold.
The discontent has led to action. Greg Jarvis and like-minded folks have formed the “Fair Go for Working Pensioners” campaign to lobby for change. They’ve been busy writing to MPs, gathering support, and even lodging an official petition to the House of Representatives in mid-2024. Their ask, as mentioned, is to lift the Work Bonus to $500/fortnight and index it annually like the pension.
Jarvis believes this change wouldn’t just help individuals, but could actually benefit the federal budget in the long run – a bold claim, right?
Here’s his reasoning: if more pensioners work and earn, then fewer pension payments have to be made out (because some people might move to part-pension or earn enough to reduce their pension), plus those working seniors would be paying taxes and spending more money in the economy, which generates revenue. He did some back-of-the-envelope modelling (he admits he’s “not an accountant or a politician”, just a concerned citizen with a calculator) and came up with an estimate that raising the Work Bonus to $500 could generate $200 million nationally per year.
That figure assumes that participation rates among seniors could be boosted back to pre-COVID levels (or higher) with a more generous earnings limit. It’s speculative, sure, but not unreasonable – more people working means more economic activity. “If the $500 threshold is enough to regain pre-COVID participation… there’s got to be a sweet spot there somewhere,” Jarvis mused, suggesting that finding the right level could “decrease the welfare bill… and increase PAYG tax and GST revenue” at the same time.
His initiative’s website (workingpensioners.com.au) details the calculations and allows supporters to register their backing. According to Mr. Jarvis, they’re trying to get as many supporters on board as possible because “obviously one voice doesn’t go anywhere” in politics. So far, he has noticed that official responses from government departments to his petition or letters have been a bit lukewarm – mostly just restating the current rules rather than engaging with the idea of changing them.
“You can tell it’s pretty much a cut and paste,” he said of the responses he’s received, “the same phrases, the same attitudes”. That kind of bureaucratic brush-off is frustrating, but not uncommon. It suggests that, at least at the time, the government wasn’t keen on committing to Jarvis’s proposal.
However, the very fact that this issue is getting airtime – in local media, on talkback radio, and even creeping into national discussion – indicates momentum. And it’s not just one retiree in Ferntree Gully banging the drum. National advocacy groups for seniors have also been campaigning on this front. National Seniors Australia (NSA), one of the country’s largest lobby groups for older people, has been championing the cause of “let pensioners work” for a few years now. In fact, NSA welcomed the recent changes (like the $4,000 credit) as a good first step, but they want the government to go much further.
What does “much further” look like? Believe it or not, some advocates want to eliminate the work limit entirely. National Seniors Australia argues that all income from work should be exempt from the Age Pension income test – essentially, no penalties at all for working.
They contend this is the simplest and fairest solution: let older Aussies work if they want or need to, and keep their full pension, no matter what they earn. NSA’s Chief Advocate, Ian Henschke, often points out that our neighbour New Zealand has exactly this system – NZ’s state pension (Superannuation) is universal and not means-tested by income, and as a result about 25% of Kiwis over 65 are still in the workforce, compared to only around 14% in Australia. That’s a huge difference. It suggests that thousands more older Australians might choose to remain employed if the disincentives were removed. The current figure of roughly 3-4% of age pensioners with declared earnings (as we saw) is extremely low; of course, not every 65+ person is on the pension or able to work, but clearly there’s room to improve participation.
National Seniors commissioned Deloitte to model the impact of scrapping the income test for work. Interestingly, they claim the policy could be “cost-neutral if 8.3% of pensioners work or work more” under those freer rules. In other words, if roughly one in twelve pensioners took up some employment or increased their hours, the extra tax revenue and reduced pension outlays would offset the cost of letting those folks keep full pension payments. And if even more decide to work, it could potentially benefit the economy.
One statistic thrown around: a 5% increase in workforce participation for over-55s could boost GDP by nearly $48 billion (that’s an economy-wide figure, not just pensioners, but it underscores the scale of the opportunity).
Beyond dollars and cents, there are social and health benefits to consider. Older individuals who stay engaged in work – even just a day or two a week – often report feeling more connected, purposeful, and mentally active.
“Activity’s a good thing for your mind and body… having something to get up for in the morning is healthy,” as Mr. Jarvis put it. Government agencies themselves acknowledge these perks; even the DSS responses noted the financial and social benefits of pensioners working.
We’ve also seen Australia struggle with worker shortages in sectors like healthcare, aged care, education, hospitality and even truck driving. Meanwhile, there’s this pool of “experienced, qualified people just sitting at home”, as Jarvis said, who could help fill the gaps. Many seniors can’t or don’t want full-time work (as he joked, “us old b****** might have a bit of difficulty with five or six days” a week) – but a couple of days? That could be a win-win: retirees supplementing their income and employers gaining reliable part-timers.
Critics of loosening the rules often worry about the cost to the public purse. After all, the Age Pension is one of the government’s largest welfare expenditures. If every pensioner suddenly kept their full pension and earned a full salary, wouldn’t that blow out the budget? The counterargument from reformers is that relatively few would or could earn big salaries – remember, many pensioners have health issues or caregiving responsibilities limiting how much they can work.
Those who do earn more likely end up moving off the pension or onto a part-pension anyway (since there’s also an assets test and other provisions ensuring wealthy retirees don’t draw a pension). National Seniors emphasises that any change would mostly benefit those with limited savings who genuinely need to work for a better standard of living, not super-wealthy retirees. And if some pensioners end up a bit better off without extra work, well, that might just lift them out of poverty – not the worst outcome.
It’s worth noting the government did make some concessions already: aside from the Work Bonus boost, from July 2024 they even extended how long pensioners can keep their Pensioner Concession Card after gaining employment (doubling it to 12 weeks retention, now 24 weeks), to encourage people to try working without immediately losing benefits like healthcare concessions. So clearly, policymakers see the merit in encouraging work. It’s more a question of how far to go.
Officially, the line from the Department of Social Services is that the Work Bonus is there to help those pensioners who “can and want to work”, by disregarding that first $300 of income each fortnight. They also like to remind everyone that this bonus stacks on top of the regular income-free areas (currently $218 for singles, $380 for couples per fortnight) which are indexed to inflation each year.
In fact, on 1 July every year, those base free areas go up a bit – that’s why they’re $218 now, whereas a couple years ago they were a little less. So from the government’s perspective, pensioners already have some increasing leeway to earn, at least via the indexed portion. The $300 Work Bonus, however, has remained static since 2019, and that’s the sticking point campaigners highlight.
When Mr. Jarvis and others lodged petitions or wrote letters, the responses (from various departments or MPs) largely reiterated these facts – essentially saying “look, we’ve already improved things: we increased it to $300 in 2019, gave a $4,000 boost in 2022, made that permanent in 2024, plus you have tax offsets and other concessions”. It’s true, the government hasn’t ignored senior workers entirely. In late 2022, the then-Treasurer said the temporary $4,000 Work Bonus boost was about “supporting those pensioners who want to work a bit more” and industries that need staff, calling it a win-win.
And indeed, from January 2024, any new pensioner automatically gets that $4k buffer. National Seniors Australia credited their advocacy for that change – they’d been lobbying hard, and the government at least partly listened.
However, for many seniors, these steps are not enough. They note that the $4,000 credit mainly helps those who don’t work regularly – it’s great if you want to do seasonal work or a short-term stint, because you can draw down the income bank.
But if you’re someone who wants to work consistently year-round, you’ll continuously bump against the $300/fortnight limit. In fact, NSA pointed out that the $4,000 “one-off” is “not ideal for people who work regularly past pension age” – it’s more suited to occasional workers. So the design still skews towards either casual sporadic work or not working at all, rather than supporting, say, a steady 1-2 days a week every week.
Many older Australians remain active and willing to work. Advocates argue that with a fairer system, more seniors would take up part-time work – benefiting themselves, the economy, and communities.
All this brings us to the big-picture question: how do we strike the right balance for older Australians who want to keep working? On one hand, the Age Pension is meant as a safety net for those who likely have lower incomes in retirement. It makes some sense to taper it off as someone’s private income rises – that’s how means-tested welfare programs usually work. On the other hand, when the rules are so restrictive that they discourage productive work or even encourage rule-bending, it suggests the balance is off.
Australia’s approach has been more restrictive than some comparable countries. As mentioned, New Zealand effectively says “you get your pension no matter what, and if you choose to work, good on you”. They then tax that income normally.
In Australia, we’ve taken a different path: we means test the pension to target it to those who need it most, which saves the budget money but at the cost of creating these disincentives. Perhaps there’s a happy medium. Maybe Jarvis’s proposal to lift the Work Bonus to $500 and index it is that middle ground – it would certainly allow more breathing room and keep the incentive meaningful over time.
Or perhaps an even bolder reform, like a full exemption of work income (at least up to some high cap), could be tried, potentially targeted to certain industries or time periods if the government is worried about cost. There’s even an idea floating around to exclude employment income for pensioners in specific high-need sectors (for example, caregiving or nursing) as a pilot, effectively paying pensioners to fill critical roles without losing benefits. The thinking is, if you really need nurses, why not let retired nurses work part-time and keep their pension? It’s an intriguing concept that mixes social policy with workforce planning.
We should also not overlook the tax side of the equation. The funny thing is, the tax system actually treats seniors pretty generously already. Thanks to the Senior Australians and Pensioners Tax Offset (SAPTO) and the low income tax offset, a single senior can earn up to about $35,000 a year and pay no income tax at all.
For a senior couple, each can earn around $31,000 with no tax. Compare that to younger folks – most under-pension-age people start paying tax once they earn over about $22,000 a year. So the tax man isn’t the one discouraging pensioners from working; in fact, seniors get a higher tax-free threshold. It’s really the Centrelink means test that bites first – long before most would ever owe a cent of income tax.
Ultimately, it comes down to the principle of a “fair go”. Australian society has long valued the idea that if you work hard, you shouldn’t be unfairly penalised. Pensioners who choose to work are doing the right thing – they’re contributing skills and effort, helping businesses, and often doing it to support themselves financially so they won’t need as much government help. From that perspective, why make it so hard for them? Surely a bit more flexibility would be only fair, and even economically savvy, given our aging population and worker shortages.
The tide seems to be turning, albeit slowly. Whether it’s increasing the Work Bonus amount, indexing it, or even removing the limit altogether, there’s mounting pressure on policymakers to reform the system. Seniors groups, individual advocates like Mr. Jarvis, and some politicians are all singing from the same hymn sheet: let pensioners work without being punished for it. As one DSS spokesperson diplomatically put it, the Work Bonus is meant to “benefit Age Pensioners who can and want to work”. If that’s the goal, then clearly there’s room to expand those benefits so more people feel that working is worthwhile.
In the coming months and years, it will be interesting to see if the government takes further action. Change could be on the horizon. But in the meantime, many older Aussies are left carefully counting their hours and pennies, making sure they don’t go over that $300 fortnightly limit and see their hard-earned dollars whittled away.
So, what do you think? Should Australia raise the Work Bonus limit (or even remove it) to give seniors a fair go at working and earning? It’s a question of striking the right balance between a sustainable pension system and respecting the contributions our seniors still can make. It might just be time to rethink how we reward work – at any age.
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In other words, it’s not much – especially with the cost of living climbing and older Aussies often needing to stretch every dollar. Now, there’s a growing call to reform the “Work Bonus” system. Advocates say it’s time to give older Australians a fair go: let them work a bit without being penalised so harshly.
In this article, we’ll break down what the Work Bonus actually is, why seniors are calling for change, and what could be done to fix it. So grab a cuppa, get comfy, and let’s dive into this important issue affecting Aussie pensioners.
What is Work Bonus?
Let’s start with the basics: What is the Work Bonus? In simple terms, it’s a special rule in the Age Pension system that lets pensioners earn a bit of income from work without it reducing their pension straight away.
According to Services Australia, “if you’re an eligible pensioner, the Work Bonus may help you earn more income from working without reducing your pension”. Essentially, the first part of your wages (up to a certain amount each fortnight) doesn’t count when Centrelink works out how much pension to pay you. This encourages older Australians to keep a foot in the workforce by softening the pension income test.
How it works in practice: For each fortnight, a pensioner gets a $300 “credit” that can offset their employment earnings. Earn up to $300 in a fortnight, and none of that will count against your pension.
Source: Seniors Discount Club
If you earn less than $300, the unused portion carries over into a personal “Work Bonus balance” (also called an income bank). This balance can build up over time (for example, if you’re not working for a while, the $300 credits keep accumulating) and later be used to offset larger amounts of income.
There is a cap on that accumulation: as of now the maximum Work Bonus balance is $11,800. In other words, you can stockpile up to $11,800 worth of unused credits, which can then allow you to earn the same amount in the future without affecting your pension.
Importantly, the Work Bonus isn’t an extra payment to you – it simply lets you keep more of your pension by not counting some of your wages. You don’t have to apply for it or fill out any special forms; Centrelink applies it automatically as long as you report your income and you meet the eligibility criteria (basically, you must be old enough for Age Pension and actually receiving a qualifying pension payment).
To illustrate, the Department of Social Services (DSS) gave this example: a single age pensioner can currently earn a total of about $518 a fortnight from work and other sources and still get the full Age Pension. How’s that figure calculated? It’s the sum of the $300 Work Bonus plus the ordinary $218 income-free area that all single pensioners get (the income-free area is a standard amount you can earn without reducing your pension, separate from the Work Bonus).
For a pensioner couple, they can earn about $680 combined per fortnight before their pension starts tapering off (their combined income-free threshold is a bit higher). If they go over those amounts, the pension reduces by 50 cents for every dollar of income over the limit.
A little history: The Work Bonus scheme isn’t new. It was first introduced back in 2009 as a way to help older people keep working if they wanted. At the start, it was a bit more complicated – it allowed 50% of the first $500 of income to be disregarded.
Source: Services Australia / YouTube
In 2011, that was simplified to just disregarding the first $250 of income, and the concept of a “concession bank” (the carry-over balance) was added. Fast forward to 2019, and the government finally boosted the fortnightly exempt amount to $300, which is where it stands today, and expanded the rules to count self-employment as eligible (so it’s not just wages from an employer, but also income from things like sole trader work can qualify as “gainful work”). Notably, when they increased it to $300 in 2019, they did not index it to inflation – it was a flat increase, and it’s been flat ever since.
Recent tweaks: In late 2022, during the COVID-era economic recovery, the government realized extra incentives might be needed to entice pensioners into critical workforce gaps. They gave a one-time boost of $4,000 to everyone’s Work Bonus balance in December 2022. That allowed those who had already retired to suddenly have more earning room banked, and any new Age Pensioners coming onto the system through 2023 also got a $4,000 starting credit added to their Work Bonus bank.
This was initially meant to be temporary – the plan was to end that boost after 2023 – but in September 2023 the government decided to make it permanent. So from 1 January 2024 onward, the rules have been locked in: all new Age Pensioners get that $4,000 Work Bonus opening balance, and the maximum income bank stays at $11,800 for everyone.
In practice, this means an eligible pensioner who hasn’t been working could potentially earn up to $11,800 in a year all at once (or in a short period) without losing any pension – because they’d have accumulated the full credits to offset it. That’s on top of the regular fortnightly $300 disregard and the usual income-free thresholds indexed each year.
So far, so good? Okay. The Work Bonus sounds like a pretty fair deal on paper – a bit of extra breathing room for those who want to work. But here’s the rub: many seniors say $300 a fortnight isn’t what it used to be. Life’s gotten a lot more expensive since 2019, and that figure hasn’t budged. Next, we’ll look at why growing numbers of pensioners (and advocates) are calling for the Work Bonus to be reformed – and what changes they want.
“$300 a fortnight? It’s b***** all nowadays.”
Ask a few pensioners what they think of the $300 Work Bonus limit, and you’ll likely hear some choice words. Greg Jarvis, a 70-year-old Age Pension recipient from Ferntree Gully in Melbourne’s outer east, has emerged as a particularly vocal critic.
He didn’t mince words: “These days ($300 a fortnight) is three quarters to seven eighths of b***** all,” Mr. Jarvis said bluntly. His colourful phrasing earned him quite a bit of attention in the local press, and it struck a chord with many seniors who feel the same. Three hundred dollars a fortnight – that’s about $150 a week – just doesn’t go very far in 2025. Not when you consider rising prices for groceries, petrol, medical expenses, you name it.
Source: Services Australia / YouTube
Mr. Jarvis isn’t complaining just for the sake of it; he’s started a movement called “Fair Go for Working Pensioners” to push for changes. What is he actually asking for? In a nutshell, raise the Work Bonus from $300 to $500 a fortnight, and make sure it keeps pace with the cost of living.
He argues that the $300 figure needs to catch up to today’s reality and then be indexed (like the pension itself is indexed) so it won’t fall behind again. His goal of a $500 fortnightly cap (instead of $300) would effectively allow pensioners to earn significantly more from working without penalty. In fact, if you add the normal income-free area to a $500 Work Bonus, a single pensioner could earn roughly $718 per fortnight and still get the full pension, compared to the current ~$518. Over a year, that’s about $5,200 more income they could earn without pension reductions – nothing to sneeze at for someone on a fixed income.
Why $500? Jarvis and his supporters believe this number is closer to the mark for making work “worth it.” He points out that the Work Bonus hasn’t changed since July 2019, while in the same period wages and prices have kept climbing.
“Since 2009, Australian wages have gone up 64-65 per cent, inflation has been 50 per cent, and the Work Bonus has gone up 20 per cent,” he noted. Indeed, the last increase (from $250 to $300) happened four years ago in mid-2019. We all know how much has happened since 2019 – a pandemic, supply chain chaos, inflation spikes – and older Australians on the pension have felt the pinch. By not indexing the Work Bonus, its real value erodes each year. $300 in 2019 bought a lot more than $300 today, so effectively the incentive shrinks over time.
Jarvis also makes a practical point: beyond that $300 mark, any extra earnings lead to a 50% pension clawback, which is quite steep. “Anything over $300, your pension is reduced by 50 cents in the dollar… the incentive for someone on a pension to go out and work is just eroded,” he said.
You can see why that might discourage someone from taking on an extra shift – earn $100 over the limit, and you lose $50 of pension. It creates a feeling of “why bother working?” because you only keep half of what you earn beyond a certain point (and that’s before even considering taxes, though many pensioners don’t earn enough to pay income tax – more on that later).
Source: Seniors Discount Club
In fact, Jarvis mentions a common response he hears: “the common response is that [pensioners are] told to work for ‘cashies’”. In other words, some seniors feel their only viable option is to work under the table to avoid losing pension payments and paying tax.
Mr. Jarvis understandably doesn’t endorse this – “that leaves the employer and the employee open for… litigation” and other risks, he said, and it’s not exactly legal. But the fact that people are even considering under-the-table work points to a system that’s not quite hitting the mark. If following the rules “just isn’t worth working” (in Jarvis’s words) so that people resort to breaking them, that’s a red flag that the rules need fixing.
To sum up the grievances driving this push for reform, let’s list the key issues as highlighted by seniors like Mr. Jarvis and others:
- The $300/fortnight cap is too low. With rising costs, $300 doesn’t stretch far. Pensioners say it feels like peanuts (or “bugger all,” to use Jarvis’s colloquial term) in today’s economy.
- No indexation means it keeps losing value. Because the Work Bonus isn’t automatically adjusted, its real worth has fallen behind wages and inflation – only a 20% rise in over a decade and none in the last 4+ years.
- High pension clawback creates disincentives. Earning beyond the limit triggers a 50¢ in the dollar pension reduction, which many see as an overly harsh penalty that erodes the reward for working.
- Complex rules cause confusion and avoidance. The income test, Work Bonus balances, reporting requirements – it can be complex and confusing. Some older people are so worried about accidentally doing the wrong thing (or dealing with Centrelink) that they just avoid work altogether, or might be tempted to not report earnings properly.
- Potential for unintended bad behavior. As noted, the low thresholds might push people toward the black economy (cash jobs) to make working “worth it,” which is bad for everyone (unfair, illegal, and leaves workers without protections).
Because of all this, participation rates of pensioners in work are actually quite low. Only a small percentage of Age Pension recipients report any employment income.
Government data showed that when the Work Bonus was last increased in 2019, about 4.3% of pensioners had earnings; by March 2025 that fell to around 3.5%. That’s right – less than one in twenty Age Pensioners are working and reporting wages. It’s a figure that has actually declined, possibly due to COVID disruptions and maybe because the current $300 just isn’t enticing enough to bring people back into work. Most seniors simply don’t bother working under these conditions (or can’t for other reasons), and those who do often work minimal hours to stay under the threshold.
A Grassroots Push for a “Fair Go”
The discontent has led to action. Greg Jarvis and like-minded folks have formed the “Fair Go for Working Pensioners” campaign to lobby for change. They’ve been busy writing to MPs, gathering support, and even lodging an official petition to the House of Representatives in mid-2024. Their ask, as mentioned, is to lift the Work Bonus to $500/fortnight and index it annually like the pension.
Jarvis believes this change wouldn’t just help individuals, but could actually benefit the federal budget in the long run – a bold claim, right?
Here’s his reasoning: if more pensioners work and earn, then fewer pension payments have to be made out (because some people might move to part-pension or earn enough to reduce their pension), plus those working seniors would be paying taxes and spending more money in the economy, which generates revenue. He did some back-of-the-envelope modelling (he admits he’s “not an accountant or a politician”, just a concerned citizen with a calculator) and came up with an estimate that raising the Work Bonus to $500 could generate $200 million nationally per year.
Source: Seniors Discount Club
That figure assumes that participation rates among seniors could be boosted back to pre-COVID levels (or higher) with a more generous earnings limit. It’s speculative, sure, but not unreasonable – more people working means more economic activity. “If the $500 threshold is enough to regain pre-COVID participation… there’s got to be a sweet spot there somewhere,” Jarvis mused, suggesting that finding the right level could “decrease the welfare bill… and increase PAYG tax and GST revenue” at the same time.
His initiative’s website (workingpensioners.com.au) details the calculations and allows supporters to register their backing. According to Mr. Jarvis, they’re trying to get as many supporters on board as possible because “obviously one voice doesn’t go anywhere” in politics. So far, he has noticed that official responses from government departments to his petition or letters have been a bit lukewarm – mostly just restating the current rules rather than engaging with the idea of changing them.
“You can tell it’s pretty much a cut and paste,” he said of the responses he’s received, “the same phrases, the same attitudes”. That kind of bureaucratic brush-off is frustrating, but not uncommon. It suggests that, at least at the time, the government wasn’t keen on committing to Jarvis’s proposal.
However, the very fact that this issue is getting airtime – in local media, on talkback radio, and even creeping into national discussion – indicates momentum. And it’s not just one retiree in Ferntree Gully banging the drum. National advocacy groups for seniors have also been campaigning on this front. National Seniors Australia (NSA), one of the country’s largest lobby groups for older people, has been championing the cause of “let pensioners work” for a few years now. In fact, NSA welcomed the recent changes (like the $4,000 credit) as a good first step, but they want the government to go much further.
Calls for Broader Reform: “Let Pensioners Work”
What does “much further” look like? Believe it or not, some advocates want to eliminate the work limit entirely. National Seniors Australia argues that all income from work should be exempt from the Age Pension income test – essentially, no penalties at all for working.
They contend this is the simplest and fairest solution: let older Aussies work if they want or need to, and keep their full pension, no matter what they earn. NSA’s Chief Advocate, Ian Henschke, often points out that our neighbour New Zealand has exactly this system – NZ’s state pension (Superannuation) is universal and not means-tested by income, and as a result about 25% of Kiwis over 65 are still in the workforce, compared to only around 14% in Australia. That’s a huge difference. It suggests that thousands more older Australians might choose to remain employed if the disincentives were removed. The current figure of roughly 3-4% of age pensioners with declared earnings (as we saw) is extremely low; of course, not every 65+ person is on the pension or able to work, but clearly there’s room to improve participation.
National Seniors commissioned Deloitte to model the impact of scrapping the income test for work. Interestingly, they claim the policy could be “cost-neutral if 8.3% of pensioners work or work more” under those freer rules. In other words, if roughly one in twelve pensioners took up some employment or increased their hours, the extra tax revenue and reduced pension outlays would offset the cost of letting those folks keep full pension payments. And if even more decide to work, it could potentially benefit the economy.
One statistic thrown around: a 5% increase in workforce participation for over-55s could boost GDP by nearly $48 billion (that’s an economy-wide figure, not just pensioners, but it underscores the scale of the opportunity).
Beyond dollars and cents, there are social and health benefits to consider. Older individuals who stay engaged in work – even just a day or two a week – often report feeling more connected, purposeful, and mentally active.
“Activity’s a good thing for your mind and body… having something to get up for in the morning is healthy,” as Mr. Jarvis put it. Government agencies themselves acknowledge these perks; even the DSS responses noted the financial and social benefits of pensioners working.
We’ve also seen Australia struggle with worker shortages in sectors like healthcare, aged care, education, hospitality and even truck driving. Meanwhile, there’s this pool of “experienced, qualified people just sitting at home”, as Jarvis said, who could help fill the gaps. Many seniors can’t or don’t want full-time work (as he joked, “us old b****** might have a bit of difficulty with five or six days” a week) – but a couple of days? That could be a win-win: retirees supplementing their income and employers gaining reliable part-timers.
Critics of loosening the rules often worry about the cost to the public purse. After all, the Age Pension is one of the government’s largest welfare expenditures. If every pensioner suddenly kept their full pension and earned a full salary, wouldn’t that blow out the budget? The counterargument from reformers is that relatively few would or could earn big salaries – remember, many pensioners have health issues or caregiving responsibilities limiting how much they can work.
Those who do earn more likely end up moving off the pension or onto a part-pension anyway (since there’s also an assets test and other provisions ensuring wealthy retirees don’t draw a pension). National Seniors emphasises that any change would mostly benefit those with limited savings who genuinely need to work for a better standard of living, not super-wealthy retirees. And if some pensioners end up a bit better off without extra work, well, that might just lift them out of poverty – not the worst outcome.
It’s worth noting the government did make some concessions already: aside from the Work Bonus boost, from July 2024 they even extended how long pensioners can keep their Pensioner Concession Card after gaining employment (doubling it to 12 weeks retention, now 24 weeks), to encourage people to try working without immediately losing benefits like healthcare concessions. So clearly, policymakers see the merit in encouraging work. It’s more a question of how far to go.
What the Government (and Opposition) Say
Officially, the line from the Department of Social Services is that the Work Bonus is there to help those pensioners who “can and want to work”, by disregarding that first $300 of income each fortnight. They also like to remind everyone that this bonus stacks on top of the regular income-free areas (currently $218 for singles, $380 for couples per fortnight) which are indexed to inflation each year.
In fact, on 1 July every year, those base free areas go up a bit – that’s why they’re $218 now, whereas a couple years ago they were a little less. So from the government’s perspective, pensioners already have some increasing leeway to earn, at least via the indexed portion. The $300 Work Bonus, however, has remained static since 2019, and that’s the sticking point campaigners highlight.
When Mr. Jarvis and others lodged petitions or wrote letters, the responses (from various departments or MPs) largely reiterated these facts – essentially saying “look, we’ve already improved things: we increased it to $300 in 2019, gave a $4,000 boost in 2022, made that permanent in 2024, plus you have tax offsets and other concessions”. It’s true, the government hasn’t ignored senior workers entirely. In late 2022, the then-Treasurer said the temporary $4,000 Work Bonus boost was about “supporting those pensioners who want to work a bit more” and industries that need staff, calling it a win-win.
And indeed, from January 2024, any new pensioner automatically gets that $4k buffer. National Seniors Australia credited their advocacy for that change – they’d been lobbying hard, and the government at least partly listened.
However, for many seniors, these steps are not enough. They note that the $4,000 credit mainly helps those who don’t work regularly – it’s great if you want to do seasonal work or a short-term stint, because you can draw down the income bank.
But if you’re someone who wants to work consistently year-round, you’ll continuously bump against the $300/fortnight limit. In fact, NSA pointed out that the $4,000 “one-off” is “not ideal for people who work regularly past pension age” – it’s more suited to occasional workers. So the design still skews towards either casual sporadic work or not working at all, rather than supporting, say, a steady 1-2 days a week every week.
Looking Ahead: A Fair Go for Older Workers?
Many older Australians remain active and willing to work. Advocates argue that with a fairer system, more seniors would take up part-time work – benefiting themselves, the economy, and communities.
All this brings us to the big-picture question: how do we strike the right balance for older Australians who want to keep working? On one hand, the Age Pension is meant as a safety net for those who likely have lower incomes in retirement. It makes some sense to taper it off as someone’s private income rises – that’s how means-tested welfare programs usually work. On the other hand, when the rules are so restrictive that they discourage productive work or even encourage rule-bending, it suggests the balance is off.
Australia’s approach has been more restrictive than some comparable countries. As mentioned, New Zealand effectively says “you get your pension no matter what, and if you choose to work, good on you”. They then tax that income normally.
In Australia, we’ve taken a different path: we means test the pension to target it to those who need it most, which saves the budget money but at the cost of creating these disincentives. Perhaps there’s a happy medium. Maybe Jarvis’s proposal to lift the Work Bonus to $500 and index it is that middle ground – it would certainly allow more breathing room and keep the incentive meaningful over time.
Or perhaps an even bolder reform, like a full exemption of work income (at least up to some high cap), could be tried, potentially targeted to certain industries or time periods if the government is worried about cost. There’s even an idea floating around to exclude employment income for pensioners in specific high-need sectors (for example, caregiving or nursing) as a pilot, effectively paying pensioners to fill critical roles without losing benefits. The thinking is, if you really need nurses, why not let retired nurses work part-time and keep their pension? It’s an intriguing concept that mixes social policy with workforce planning.
We should also not overlook the tax side of the equation. The funny thing is, the tax system actually treats seniors pretty generously already. Thanks to the Senior Australians and Pensioners Tax Offset (SAPTO) and the low income tax offset, a single senior can earn up to about $35,000 a year and pay no income tax at all.
For a senior couple, each can earn around $31,000 with no tax. Compare that to younger folks – most under-pension-age people start paying tax once they earn over about $22,000 a year. So the tax man isn’t the one discouraging pensioners from working; in fact, seniors get a higher tax-free threshold. It’s really the Centrelink means test that bites first – long before most would ever owe a cent of income tax.
Ultimately, it comes down to the principle of a “fair go”. Australian society has long valued the idea that if you work hard, you shouldn’t be unfairly penalised. Pensioners who choose to work are doing the right thing – they’re contributing skills and effort, helping businesses, and often doing it to support themselves financially so they won’t need as much government help. From that perspective, why make it so hard for them? Surely a bit more flexibility would be only fair, and even economically savvy, given our aging population and worker shortages.
The tide seems to be turning, albeit slowly. Whether it’s increasing the Work Bonus amount, indexing it, or even removing the limit altogether, there’s mounting pressure on policymakers to reform the system. Seniors groups, individual advocates like Mr. Jarvis, and some politicians are all singing from the same hymn sheet: let pensioners work without being punished for it. As one DSS spokesperson diplomatically put it, the Work Bonus is meant to “benefit Age Pensioners who can and want to work”. If that’s the goal, then clearly there’s room to expand those benefits so more people feel that working is worthwhile.
In the coming months and years, it will be interesting to see if the government takes further action. Change could be on the horizon. But in the meantime, many older Aussies are left carefully counting their hours and pennies, making sure they don’t go over that $300 fortnightly limit and see their hard-earned dollars whittled away.
So, what do you think? Should Australia raise the Work Bonus limit (or even remove it) to give seniors a fair go at working and earning? It’s a question of striking the right balance between a sustainable pension system and respecting the contributions our seniors still can make. It might just be time to rethink how we reward work – at any age.
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