Pension Bonus Scheme
Purpose of payment/benefit
The Pension Bonus Scheme (the Scheme) was introduced on 1 July 1998. Eligible older Australians who are registerred in the Pension Bonus Scheme and who defer claiming the Age Pension and instead remain in the workforce, may receive a tax-free lump sum when they eventually claim and receive the Age Pension.
Eligibility
A Pension Bonus can only be paid to people who have not received the Age Pension or any other income support payment (other than a Carer Payment) since reaching Age Pension age.
People must be registered to participate in the Scheme. The Scheme was closed to new registrations from 1 July 2014. People who were already registered in the Scheme before1 July 2014 may still claim a Pension Bonus if they meet the other relevant eligibility criteria.
People should ensure that they are fully informed so they can decide whether or not it is best for them to participate in the Scheme. Some people may be better off receiving a part-rate Age Pension and the Work Bonus while they continue to work.
To receive a Pension Bonus, a person must work a minimum of 12 months from their date of registration and complete at least 960 hours of paid work in this and any subsequent years. This is an average of 20 hours each week for 48 weeks each year. For couples, only one person needs to pass the work test. At least 640 hours of the required 960 hours must be performed within Australia.
A Pension Bonus can be accrued for a maximum of 5 years and cannot be accrued after the age of 75. However, work by a person after age 75 can accrue towards the bonus of a younger partner who has not accrued the maximum of 5 years.
The Pension Bonus is paid when a person first claims and receives the Age Pension. The claim for the Pension Bonus and the Age Pension must be lodged together. Unless special circumstances exist or the person's membership is non-accruing, the Pension Bonus must be claimed within 13 weeks of failing to meet the work test.
Rates
The size of the Pension Bonus is linked to the rate of the Age Pension a person is eligible for at the date of grant of pension, their accrual period and their marital status over the accrual period. Current maximum rates are available from Centrelink. If a person receives a reduced rate of the Age Pension, then they would also receive a reduced Pension Bonus.
Further information
For further information about the Pension Bonus Scheme, please contact Centrelink on 13 2300 or visit the Pension Bonus Scheme section of the Centrelink website.
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