Pension Bonus Scheme closed to new entrants from 20 September 2009
The Pension Bonus Scheme will be closed to new entrants. An income test concession will be introduced instead. Clients registered prior to closure will continue accruing entitlements as previously.
To compensate for the closure of this measure, the Government will introduce a new pension income test concession for people of Age Pension age. The concession will mean that only 50% of the first $500 of employment income per fortnight will be counted for income test purposes. At a 50 cent taper rate, this concession equates to a maximum increase in age pension entitlement of $3,250 pa (single or couple combined).
Oculus Comment
- A person may need to evaluate whether the bonus or the concession is more beneficial to them. This may depend on the amount of years for which a person intends to stay in employment, the amount of years which they have already accrued, or the percentage of Pension Bonus to which they will be entitled.
- The maximum bonus payable after two accrued years for a single person is $5,570.40 (as at 20 March 2009), whereas the maximum concession value for 2 years of Age Pension is $6,500. After three accrued years however, the maximum bonus is $12,533.30, but the maximum concession is valued at only $9,750. If the person will not be entitled to the full bonus, the income test concession may become more favourable.
If eligible, and beneficial, ensure clients register for the Pension Bonus Scheme before 20 September 2009.
