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Part time work in retirement

Retirement  |  10/01/2022  |   7 min read

Two years of COVID has changed the nature of the workforce. Lockdowns, travel restrictions and supply chain issues have turned the world on its head.  Meanwhile, a lack of overseas travellers has created serious shortages in the workforce, with more jobs than people to fill them.   

That presents an opportunity for people who have retired from the workforce but are thinking about returning in some capacity.  

So, whether you’d like to earn some extra cash, miss the social aspect, or a little bit of both, here’s what you need to know when it comes to retirement, the Age Pension, and returning to the workforce.   

Getting back into the workforce 

Retirement is changing. People are living longer, they’re remaining active, and they’re looking at ways to maintain their lifestyle. Increasingly, that means taking up some part time work. 

But when it comes to retirement and continued employment, there are specific laws in place. These relate to the number of hours you can work, your earnings, and any Age Pension benefits you may receive. Understanding these regulations can help you ensure your earnings stay in your pocket. 

If you’re receiving the Age Pension, any employment income may reduce your benefits. Your eligibility for a Pensioner Concession Card may also be affected. 

The good news is the system has been overhauled in recent years, and the Work Bonus Scheme allows for increased income in retirement before your Age Pension is impacted.  

The Work Bonus offers additional flexibility 

The Work Bonus increases the amount an eligible pensioner can earn from work before it affects their pension rate. It means the first $300 of fortnightly income from work is not assessed and is not counted under the pension income test. 

If you don’t earn the full $300 per fortnight you can accumulate and carry over the unused amounts (up to $7,800) for future income.  

For example, if you haven’t worked for a year, you accumulate $7,800 of unused work bonus. If you then earn $4,000 for contract work over a six-week period, this won’t impact your Centrelink payments (and will leave you with another $3,800 in income for the year before your payments are impacted). 

Just remember to keep Centrelink notified. While you don’t need to apply for the Work Bonus, you do have to report your income for the Work Bonus to be applied. 

The long-term financial benefits 

Aside from the social and active benefits of returning to work, it can also help your long-term finances. Supplementing your super with a part-time income means you’re drawing down less money, which means your savings can last longer and continue to be reinvested. You may even be able to add to your super. 

At the end of the day everyone approaches retirement differently. The important thing is finding a lifestyle that works for you.  

Note that the information contained within this article is general in nature. Should you wish to speak with a financial planner about your personal circumstances and how you can maximise the available government initiatives mentioned above, click the link below to learn more and book an appointment. 

Speak with a financial planner

Find out how part-time work may impact your retirement income.

Learn more

This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr") is the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("Equip" or "The Fund"). Past performance is not a reliable indicator of future performance.

Togethr Financial Planning Pty Ltd (“TFP”) (ABN 84 124 491 078, AFSL 455010), trading as Equip Financial Planning, is licensed to provide financial planning services to retail and wholesale clients. TFP is owned by Togethr Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the TFP Financial Services Guide and/or Privacy Statement by contacting our Helpline on 1800 682 626. This is general information only and does not take into account your personal objectives, financial situation or needs and therefore should not be taken as personal advice.

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