Pension Bonus

The Pension Bonus Scheme

The Government will close the Pension Bonus Scheme to new entrants from 20 September 2009.  This measure will not affect existing members. Read more

Pension Bonus Scheme

The Pension Bonus Scheme will be replaced by the work Bonus from 20 September 2009. About Seniors subscriber, Anne, wants to know if this will benefit her husband who still works part-time.

Q. Anne
My husband retired at age 65 and after 6 months retirement, returned to part-time work. Is he eligible for part thereof of the bonus scheme for staying in the workforce after 65? He is now 73 and still working part-time.

A. Provided by Hank Jongen, General Manager, Centrelink

To be eligible for the Pension Bonus Scheme, you need to register before you claim the Age Pension.  You cannot have received Age Pension or any other income support payment, other than Carer Payment, since reaching Age Pension age. However, the you may benefit from the new Work Bonus, which will be introduced on 20 September 2009 as part of the Government’s Secure and Sustainable Pension package. Under the Work Bonus, only half of the first $500 of gross employment income is to be counted in assessing the pension rate. This means that up to $250 per fortnight can be disregarded.

Centrelink customers do not need to apply for the Work Bonus. They need only advise Centrelink of gross employment earnings. 

Further information about the Work Bonus is available at www.centrelink.gov.au under Secure and Sustainable Pensions or by phoning 13 2300

Pension Bonus Scheme to cease

For About Seniors subscriber, Ray, the Pension Bonus Scheme makes working past pension age worthwhile and provides a little extra in retirement, but what happens when it stops?

Q. Ray
Could you please tell me if the pension bonus scheme is finished as I am about to complete my final year and will I get my bonus?

A. The Pension Bonus Scheme will close to new entrants from 20 September 2009.  This will be replaced by another scheme called the Work Bonus. For more information, click here.

Retirement income options

About Seniors subscriber, Martin, is nearing retirement age and is keen to know how best to make the most of his money in retirement

Q. Martin
I wonder if you can offer some retirement assistance, I reach retirement age in late May. I need/wish to continue working. I am casually employed and earn approx $38k annually. My employer is happy to work my hours to best suit pension requirements. I have little savings and very little super. My question is should I work as hard as I can so as to get the Centrelink bonus at age 70, or get partial pension some casual work and pay extra super? I am not clear of the criteria.

A. Provided by Hank Jongen, General Manager, Centrelink
The Pension Bonus Scheme may be suitable for you as you intend to work past retirement age, however some people may be better off financially if they claim Age Pension or a Veterans’ Affairs Service Pension while they work.

This can depend on:
· your current level of income and assets
· the amount of income you need in retirement
· taxation issues
· superannuation, and
· health and lifestyle issues.

Centrelink offers confidential, free, independent and expert information through the Financial Information Service (FIS). FIS Officers can give you information to assist in planning for your future and retirement. When deciding whether to claim age pension or defer the claim to the Pensioner Bonus Scheme, I recommend you speak to a FIS Officer who can give you information about the range of Centrelink payments and services available to you. 

More information about the Pension Bonus Scheme is available in a booklet published on the Centrelink website

FIS Officers can also help you plan when to claim your bonus. To make an appointment with a FIS Officer or ask for material on investment planning, call Centrelink on 13 2300.

Pension Bonus Scheme

Q. Maureen
For people on the Pension Bonus Scheme, where do they stand with the present Goverment’s one-off payment to Pensioners?

A. People who are on the Pension Bonus Scheme are not eligible for the one-off payment, as you need to be receiving one of the qualifying payments. However, if you are a Commonwealth Seniors Health Card holder, you may be eligible for the one-off payment.

For a full list of eligible payments, attached is a factsheet on the Economic Security Strategy payments.

Pension bonus feedback

Everyone has their own opinion on the true benefits of the Rudd Government’s recently announced lump sum bonus scheme.  While pensioners who will benefit are justifiably pleased at receiving any additional money, questions have been raised about the way in which the money has been distributed.  Malcolm Turnbull, Leader of the Opposition thinks it offers “justice to Aged Pensioners”, while Senator Barnaby Joyce questions the wisdom of a one-off payment at such a tempting time of year.

Pension bonus scheme

Q. Fred
I am having a lot of trouble at the moment with CentreLink not accepting my accreditations for the Pension Bonus Scheme. The scheme was set up for people over the age of 65 to be able to claim a bonus any where from 1 to 5 years if they continued to do paid work and deferred claiming the Old Age pension for all or any part of that 5 Years. When I signed up for the scheme in 2005 I was told that I only had to work a minimum of 10 hours to qualify for the bonus. After checking it out after having been signed up with the scheme for 3 1/2 years they tell me that I need to work for 18.41 hours per week or 960 hours per year. I have been employed as a Technician at a school for the last 3 1/2 years for a total of 37.24 hours per fortnight which is 968.24 hours per year. Now they tell me that because I am receiving 10 weeks holidays and not working PHYSICALLY for 6 of those weeks, I do not qualify.

I have not received one solitary cent from the government in my whole 40 years plus in the work force and payed TAXES for that period of time and now they are wanting to cheat me out of what is rightfully mine.

I was told the whole idea of the Pension Bonus Scheme was for people who deferred to receive any Old age pension for a period of 5 years which would total ($66,000) and instead would receive a bonus of $32,000 + instead. I was wondering if you people could get some OFFICIAL information on the situation and ease my FRUSTRATION and please let me know the outcome.

A. Hi Fred

We can understand your frustration, it’s hard to take when you believe you have done everything necessary to ensure you qualify, only to be told you don’t. We have contacted Centrelink, who will not comment on individual cases. They have said that they would be happy to put you in touch with an FIS officer to assist with your claim.

If we can assist in any way further, please let me know.

Q&A – pension bonus

Patricia’s question has come as a timely reminder of the importance of knowing what entitlements are available. It’s also worth remembering the value of listening and communicating with others – it’s through our social networks that we often hear about opportunities or options about which we new little or nothing.

Q. Patricia
I have heard that if you are still working over retirement age (65 for men, depends on birthdate for women) you are eligible for a payout re Centrelink when you do actually retire.
Can you help? There are many people in the workforce over 60 because of their knowledge and reliability. I commute to Sydney daily and I see a great deal of mature people travelling to work who are well into their 60s. I feel there should be more emphasis on all seniors being informed about this payout. I found this out from one of my colleagues at work.

A. You may be eligible for the Pension Bonus Scheme, although there are a few qualifying factors. Below is a link to Centrelink, which will give you all the information you need as to the requirements, registering for the scheme and how much you may receive. The amount you are eligible for when you retire depends on the amount of basic Age Pension you are entitled to when you claim it after you leave the workforce, the length of time you have been an accruing menber of the Pension Bonus Scheme and your marital status during the time you are deferring your Age Pension. I hope this helps.
http://www.centrelink.gov.au/internet/internet.nsf/payments/pension_bonus.htm

Question & answer – Pension bonus

Independent financial adviser, Richard Sheargold, from Stonebridge Wealth Solutions, answers George’s question about working past the pension age.

Q. I turned 65 on 14th of this month. As I wish to continue in the workforce until I am 70, what steps do I need to take with Centrelink?

A. George, you should register with Centrelink ASAP for the Pension Bonus Scheme. This scheme allows you to work past pension age and if you pass the assets/income test you will accumulate a lump sum for when you do retire. However, very rarely will you fully pass the assets/incomes test if you are working. You may pass enough to get a part-pension and you can defer this payment until you retire fully. Out of interest, would be you be interested in a complying pension to gain more age pension in full retirement? If you would like to know more . Hope this helps.
Richard
Stonebridge Wealth Solutions
Phone (02) 9955 9633

Nominees

You may request the appointment of a correspondence and/or payment nominee if you need assistance in dealing with Centrelink, or to manage your Centrelink payments. Your nominee must be someone you trust who will always act in your best interests. A correspondence nominee can do most things on your behalf, including complete forms, attend interviews, provide information and receive correspondence from Centrelink. A payment nominee will receive your payment into an account in their name. The payment is to be used exclusively for your benefit. 
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Permission to Enquire
It may be convenient to give a third party permission to make enquiries on your behalf about your Centrelink record. Some typical examples of third parties are your partner, an adult child, or your financial planner. Go there

Responsibilities

Centrelink was formerly known as The Department of Social Security.
Centrelink Customer Service Centres provide services for various government departments including the departments of Family and Community Services, Health and Ageing, and Veterans’ Affairs.
For retired people or people planning retirement Centrelink provides information and services about:

• Age Pension
• Accommodation and renting
• Financial Information Service
• Pensioner Concession Card
• Commonwealth Seniors’ Health Card
• Pension Loans Scheme
• Retirement assistance

• Disability Support Pension
• Carer Payment
• Sickness Allowance
• Mobility Allowance
• Carer Allowance
• Rent Assistance
• Postal Concessions for the Blind
• Special Benefit
• Bereavement Allowance
• Bereavement Payments
• Widow Allowance
• Widow Pension Class B
• Newstart
• Health Care Cards
• Remote Area Allowance
• Pensioner Education Supplement

Pension Bonus Scheme Deadline

Clearview Retirement Solutions alerts post-retirement age workers that they risk losing up to a $30,000 tax-free lump sum if they haven’t registered for the Pension Bonus Scheme within the required time period.

The Federal Government’s incentives to continue working past pension age include the ”Deferred pension incentive scheme”, which allows you to defer access to age and service pensions for up to five years.

But Clearview Retirement Solutions says many people aren’t aware of the registration requirements as they aren’t easily accessed through the Centrelink information. If you don’t register within 13 weeks of reaching the official retirement age (60 for females, 65 for men other than veterans), you could forfeit the opportunity to receive a tax-free lump sum of up to $30,000 after being five years in the scheme.

The registration requirements are described in the less consumer-friendly guide to social security law. This issue highlights the need for people reaching pension age to seek financial planning advice, as the fine print in Government schemes can be detailed and often complex. If you have any doubts, you should contact Centrelink on 132300.
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