The income you can earn from your investments and/or work while still qualifying for the age pension will increase on 20 September.
The changes reflect indexation adjustments, which are made twice per year, to keep up with inflation.
Let's take a look at the details.
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How much can you earn while still getting the pension?
If you were born on or after 1 January 1957, you are eligible for the pension from age 67, whether you are retired or not.
The pension is subject to an assets test and income test.
On 20 September, the upper thresholds on both tests will change.
In this article, we're focusing on the rules for the income test.
Currently, singles who earn less than $226 per fortnight qualify for the full age pension.
Under the indexation changes, singles who earn between $227 and $2,701.40 (up from $2,627.80) per fortnight will get a part-payment.
Couples who earn less than $396 per fortnight qualify for the full payment.
Couples who earn between $397 and $4,128 (up from $4,016.80) per fortnight will qualify for a part-pension.
Work bonus
The Work Bonus reduces the amount of income that counts in your fortnightly income test.
Every fortnight, $300 credit is added to your Work Bonus balance, up to a maximum of $11,800, as a matter of routine.
When you work and declare your earnings, your Work Bonus balance offsets those earnings.
If your earnings are higher than your Work Bonus balance, the excess counts toward your income test for that fortnight.
This may mean you receive a lower pension payment for the fortnight.
Investment income
Pensioners do not need to declare actual income from each of their financial investments.
Instead, income is calculated using deeming rates.
(Rental income from an investment property is assessed separately, and exact amounts are used).
The deeming rates will go up on 20 September, but they are still generously low.
The lower deeming rate will be 1.75% for the first $66,800 worth of assets for singles and the first $110,600 for couples combined.
Everything above these amounts will be deemed to have earned the new upper deeming rate of interest at 3.75%.
Even the upper deeming rate is much lower than the typical interest rate you'd get on savings at the bank these days (5%-plus).
Pension payments are also going up
From 20 September, single pensioners will receive an extra $36.80 per fortnight under the inflation adjustments.
That will take the full pension payment up to $1,237.70 per fortnight.
Couples will get an extra $27.80 per partner, per fortnight.
That will raise the full pension payment to $933 per partner, per fortnight.
A very important note
Even if your income is very close to the upper limit, it is still worth applying for the age pension.
You may only get a small pension payment, but you'll get the full benefit of the Australian Pensioner Concession Card (PCC).
The PCC can save you thousands of dollars per year through discounted medicines and hearing services, bulk-billed GP appointments, and extra benefits under the Medicare Safety Net.
Depending on which state or territory you live in, you may also qualify for discounted public transport, electricity, gas, council and water rates, dental and eye care costs, and car registration.
