Guide
What is the Work Bonus, and how much can I earn?
The Work Bonus excludes the first $300 of employment income a fortnight from the Age Pension income test. Combined with the $212.00 income free area, a single pensioner can earn $512.00 a fortnight before their pension reduces.
Key facts at a glance
- Work Bonus exemption: $300 of employment income per fortnight, per person (Services Australia).
- Income bank maximum: $11,800 of unused exemption.
- New pensioners start with a $4,000 income bank credit.
- Single pensioner with no other income can earn $512.00 a fortnight before any reduction.
- Applies to employment and self-employment from personal exertion, not investments.
- Applied automatically — no separate application is needed.
All figures correct as at 20 March 2025, sourced from Services Australia. Next indexation: 20 September 2026.
How the Work Bonus works
Each fortnight, Services Australia takes your employment income, subtracts the $300 Work Bonus, and only then applies the income test. If you earn less than the exemption, the unused part is added to your income bank. When you earn more, the bank is drawn down before any income counts.
| Feature | Amount | Notes |
|---|---|---|
| Fortnightly exemption | $300 | Per person of Age Pension age |
| Income bank maximum | $11,800 | Unused exemption accumulates |
| Starting credit for new pensioners | $4,000 | One-off, applied at grant |
| Single earnings before any reduction | $512.00 | Work Bonus plus the income free area |
Income Test Estimator
The Work Bonus is applied automatically to the employment income you enter.
Estimated result
$1,054.60 per fortnight
Under the income test alone, before the assets test is applied.
- Employment income counted after Work Bonus
- $0.00 per fortnight
- Total assessable income
- $400.00 per fortnight
- Income test free area
- $212.00 per fortnight
- Reduction (50c per dollar over)
- − $94.00
This is an estimate based on the published rules and rates of Services Australia, correct as at 20 March 2025. Confirm your actual entitlement with Services Australia — your circumstances may include assessments this tool does not model.
Worked example: Judy works six weeks over summer
Judy is a single pensioner who does not usually work, so her income bank has built up to the full $11,800. She takes seasonal work paying $2,000.00 a fortnight for three fortnights — $6,000 in total.
Each fortnight, $300 is exempt under the standard Work Bonus and the remaining $1,700.00 is drawn from her income bank, so no employment income is counted at all.
Result: Judy keeps her full pension across the three fortnights, and her income bank falls by $5,100 to $6,700.
What the Work Bonus does not cover
- Deemed income from savings, shares and account-based pensions
- Net rental income from investment property
- Income from a trust or company where you are not personally working
- Anything counted in the assets test
Reporting your earnings
You must report employment income each fortnight through myGov, the Express Plus Centrelink app or the phone service, even when the Work Bonus wipes it out entirely. Report income in the period it is paid. Failing to report is the most common cause of pension overpayments and later debts.
Frequently asked questions
What is the Work Bonus?
The Work Bonus excludes the first $300 of employment income each fortnight from the Age Pension income test. Unused amounts accumulate in a Work Bonus income bank up to $11,800, which can offset future earnings.
How much can I earn before my pension is affected?
A single pensioner can have $512.00 a fortnight of employment income before the pension reduces — the $300 Work Bonus plus the $212.00 income free area — assuming no other assessable income.
What is the Work Bonus income bank?
Any part of the $300 fortnightly exemption you do not use is added to your income bank, up to a maximum balance of $11,800. The balance is drawn on automatically in fortnights when you earn more than the exemption.
Do new pensioners get a Work Bonus credit?
Yes. People granted the Age Pension receive a one-off starting Work Bonus income bank credit of $4,000, so casual or seasonal work early in the pension does not immediately reduce payments.
Does the Work Bonus apply to self-employment income?
Yes, it applies to income from gainful work including self-employment involving personal exertion. It does not apply to investment income, rent from property, or deemed income from financial assets.
Do I need to apply for the Work Bonus?
No. Services Australia applies the Work Bonus automatically to eligible employment income once you are receiving the Age Pension. You still have to report your earnings each fortnight.
Does the Work Bonus apply to both members of a couple?
Yes, each member of a couple who is of Age Pension age has their own Work Bonus and their own income bank; the bonus is applied to that person's own employment income only.
Does the Work Bonus affect the assets test?
No. The Work Bonus only reduces assessable income. Money you earn and keep still adds to your assets and can reduce your pension through the assets test instead.
Researched and fact-checked by
researches Australian retirement and social security policy full time. Not a licensed financial adviser — every figure on this page is sourced from Services Australia or the Social Security Act 1991 (Cth).
Last reviewed: 15 September 2026
Figures as at: 20 March 2025
Next indexation: 20 September 2026
Change log: Reviewed 15 September 2026; Work Bonus exemption, income bank cap and starting credit re-checked against Services Australia, figures correct as at 20 March 2025. Next update at the 20 September 2026 indexation.