With the right advice behind them, retirees can easily re-enter the workforce without jeopardising their pension benefits, Mark Teale writes.
The terms “work” and “retirement” at first appear to be at the opposing extremes of the spectrum, but for a portion of the population this is certainly not the case.
Work does a couple of very important things outside providing a person with an income so that they can survive on a weekly basis. Work allows a person to continue to contribute to society, allows them to mix and broaden their social circle and also provides purpose and self-respect - these benefits also contribute to a longer and more importantly healthier life.
Retiring into an existence where he or she does not have enough funds to travel the world, eat out and play golf four days a week (if so inclined) and where the only entertainment is the walk to the shop to purchase the paper and buy a coffee will lose its attraction very quickly.
It’s important to remember that the work a person does in retirement does not need to be a continuation of their previous working career.
You don’t need to build a new career, just contributing and picking up some extra cash might be all that’s required. So what might appear to be a menial job such as shelf packing, stop/go sign operators, headstone restorer or even a barista should never been seen as being beneath a person’s abilities, the reason a person is working now is entirely different to the reason a person worked pre-retirement.
For the part age pensioner, the extra reason to find work is the generous income test which applies to their earned income.
The “work bonus” not only allows them to earn $250 over a 14 day period without any effect on their age pension, it also allows them to build a bank of $6,500 in credit which equates to $250 multiplied by 26 fortnights.
So what this means, is that for the Age Pensioner who enjoys playing Santa Claus every Christmas in the local shopping mall and, depending on how much Santa is paid, they could work every year during this period pick up some extra cash and not have their pension affected.
But like all government legislation, it does not come without some pitfalls. For example, if you earned $500 over a five day period instead of a 14 day period, the amount of income taken into account for the fortnight would not be $250 but $410.
The prior Pension Bonus Scheme which provided a lump sum payment to people who deferred their application for age pension for a maximum of five years while working, was closed to new registration on 1 July 2014.
Source: www.moneymanagement.com.au
The terms “work” and “retirement” at first appear to be at the opposing extremes of the spectrum, but for a portion of the population this is certainly not the case.
Work does a couple of very important things outside providing a person with an income so that they can survive on a weekly basis. Work allows a person to continue to contribute to society, allows them to mix and broaden their social circle and also provides purpose and self-respect - these benefits also contribute to a longer and more importantly healthier life.
Retiring into an existence where he or she does not have enough funds to travel the world, eat out and play golf four days a week (if so inclined) and where the only entertainment is the walk to the shop to purchase the paper and buy a coffee will lose its attraction very quickly.
It’s important to remember that the work a person does in retirement does not need to be a continuation of their previous working career.
You don’t need to build a new career, just contributing and picking up some extra cash might be all that’s required. So what might appear to be a menial job such as shelf packing, stop/go sign operators, headstone restorer or even a barista should never been seen as being beneath a person’s abilities, the reason a person is working now is entirely different to the reason a person worked pre-retirement.
For the part age pensioner, the extra reason to find work is the generous income test which applies to their earned income.
The “work bonus” not only allows them to earn $250 over a 14 day period without any effect on their age pension, it also allows them to build a bank of $6,500 in credit which equates to $250 multiplied by 26 fortnights.
So what this means, is that for the Age Pensioner who enjoys playing Santa Claus every Christmas in the local shopping mall and, depending on how much Santa is paid, they could work every year during this period pick up some extra cash and not have their pension affected.
But like all government legislation, it does not come without some pitfalls. For example, if you earned $500 over a five day period instead of a 14 day period, the amount of income taken into account for the fortnight would not be $250 but $410.
The prior Pension Bonus Scheme which provided a lump sum payment to people who deferred their application for age pension for a maximum of five years while working, was closed to new registration on 1 July 2014.
Source: www.moneymanagement.com.au
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