July 1 often finds itself as a much maligned day in many peoples’ calendars.
It’s the day each year when a whole myriad of government changes come into force.
Unfortunately, some can lighten your wallet and others can become an administrative nightmare.
Although on July 1 this year – for age pensioners at least – changes to Centrelink’s Work Bonus rules have made earning extra employment income a fairer process.
Centrelink have now allowed the $250 fortnightly concession to be accrued in what could be termed an ‘income bank’.
In the past, pensioners who earned lower wages, or did seasonal work, found themselves disadvantaged because those earning more received a higher concession and those working regularly could access concessions across the year.
In respect to seasonal work, this meant two pensioners could earn exactly the same annual income, yet the seasonal worker could be disadvantaged substantially because their income could only be counted in the fortnights they earned it.
From July 1 2011 all eligible pensioners will be credited with the work bonus of $250 per fortnight, regardless of how much they earn from employment.
If unused, this will build to a maximum of $6,500 and can be drawn down to offset future assessable income exceeding $250 per fortnight.
For pensioners who earn regular employment income over $250 per fortnight, only income over the $250 threshold will be assessed under the income test.
For pensioners earning less than $250 per fortnight, say $200 per fortnight, all earnings will be disregarded and the $50 remaining will credit to their income bank for future use.
This means if they earn $300 in the next fortnight they won’t have gone over the threshold and be subject to the income test.
The changes now provide greater flexibility and a greater incentive for pensioners to earn extra money and remain active.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL / ACL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. If you’d like help with your financial future, we ‘re one of only six fiduciary financial advisors in Australia.
