In a major step toward encouraging work flexibility for older Australians, the federal government has introduced a $4,000 Centrelink Work Bonus Boost starting in July 2025.
This initiative allows age pensioners and eligible veterans to earn more income from part-time or casual work without affecting their pension payments. The change is aimed at reducing financial pressure while encouraging seniors to remain active in the workforce on their own terms.
What the $4,000 Boost Means for Pensioners
The Centrelink Work Bonus is a long-standing policy that offsets the amount of income from work counted in the pension income test. As of July 2025, the government has increased the annual Work Bonus income bank cap by $4,000 raising it from $7,800 to $11,800. This increase gives retirees more freedom to take on occasional work without jeopardising their pension.
Why the Government Is Encouraging Pensioners to Work
The policy is part of a broader workforce participation strategy to address labour shortages while also providing retirees more financial autonomy. Many retirees want to work part-time, especially in industries like retail, hospitality, and aged care.
However, fear of losing pension payments has held them back. The $4,000 boost removes that pressure, offering retirees more room to earn and save without navigating complex payment reductions.
Eligibility Criteria for the $4,000 Work Bonus Boost
To benefit from the new rules, individuals must be over Age Pension age and receiving an eligible payment such as the Age Pension, Disability Support Pension (if over Age Pension age), or the Service Pension for veterans. Importantly, the work performed must be gainful employment such as part-time jobs, seasonal roles, or self-employment and properly reported through Centrelink.
How the Work Bonus Is Applied to Pension Payments
Under the Work Bonus system, the first $300 of employment income per fortnight is excluded from the income test. The unused portion of the Work Bonus accumulates in the pensioner’s income bank, up to a new limit of $11,800 per year. This bank can be drawn upon during higher-income periods, allowing flexibility across the year.
Summary of $4,000 Work Bonus Boost – Centrelink, July 2025
| Policy Feature | Before July 2025 | From July 2025 |
|---|---|---|
| Work Bonus Income Bank Limit | $7,800 annually | $11,800 annually |
| Fortnightly Work Bonus Offset | $300 per fortnight | $300 per fortnight (unchanged) |
| Who Is Eligible | Age Pensioners & some veterans | Same criteria applies |
| Reporting Requirements | Fortnightly via myGov or Centrelink app | No changes |
| Impact on Pension | Reduces assessable income | More income exempted |
How to Access the Increased Bonus
There is no need to apply separately for the boost it will be automatically applied to eligible recipients’ income tests from July 1, 2025. Pensioners who have stopped working but are considering returning in a limited capacity can take advantage of this increased threshold. Logging work income accurately and on time remains essential to avoid overpayments or delays.
Why This Is a Win for Retirees
This reform gives retirees financial breathing room and a chance to re-enter the workforce without sacrificing the stability of their pension. Whether it’s picking up a few shifts a month, running a hobby-based business, or helping during peak seasonal demand, retirees now have greater flexibility to engage with work while maintaining income security.