Short answer: yes. You can work part-time, casually, or take on short contracts and still receive the Age Pension. Plenty of Australians do exactly that, and most are better off for it.
The bit that trips people up is not whether you’re allowed to work. It’s how the income test and a clever little thing called the Work Bonus interact with your pension payment. Get that right and you can pick up a few shifts a week, keep most or all of your pension, hang onto your Pensioner Concession Card, and still have your employer paying super into your account.
This guide walks through how it actually works, the current 2026 numbers, what to report to Centrelink, and three realistic examples of how the maths plays out.
Yes, You Can Work and Receive the Age Pension
There’s no rule that says you have to stop working to claim the Age Pension. The government would actually prefer you didn’t. With more Australians living longer and wanting to stay active, the system is set up to encourage part-time and casual work in retirement, not punish it.
What changes when you work is the amount of pension you receive, not your eligibility. That amount is worked out using the income test, with employment income getting special treatment through the Work Bonus.
We see this question come up constantly from clients in their late 60s. Someone has just retired from a full-time role, then gets offered two days a week from their old employer, or picks up some consulting, or wants to help out at the local bowls club a few shifts. The fear is always the same: “If I take this, will I lose the pension?” In most cases, the answer is no, not in any meaningful way.
How the Age Pension Income Test Works
The income test looks at money coming in from all sources, including wages, super drawdowns, investment income, and deemed income on your financial assets. If you’re below a certain threshold (the income free area), you get the full pension. Above it, the pension reduces.
Current income free areas as at 20 March 2026 (Services Australia):
| Income free area (per fortnight) | Pension reduction above free area | |
|---|---|---|
| Single | $218 | 50 cents per dollar |
| Couple (combined) | $380 | 50 cents per dollar (combined) |
So a single pensioner can have up to $218 a fortnight in assessable income before anything changes. Past that, every dollar of extra income costs you 50 cents of pension.
That sounds steep until you realise employment income is treated more generously than other income through the Work Bonus.
The Work Bonus: Why Employment Income Is Different
The Work Bonus is the bit most people don’t know about, and it’s the reason working part-time on the pension is usually a good deal.
Here’s how it works:
- The first $300 per fortnight of employment or self-employment income, per person, doesn’t count toward the income test at all.
- This is on top of the standard $218 income free area.
- That means a single pensioner can earn around $518 a fortnight from work before the pension reduces by a single cent.
Then there’s the Work Bonus bank. If you don’t work in a fortnight, or you earn less than $300, the unused portion of your Work Bonus accumulates. The bank can build up to a maximum of $11,800. When you start earning, that bank gets drawn down first.
This is what makes the Work Bonus genuinely powerful for people doing seasonal or short-burst work. A pensioner who hasn’t worked in two years can have $11,800 sitting in their Work Bonus bank. They could then take a six-week contract earning $2,000 a fortnight and most of that income wouldn’t touch their pension at all.
Current as at June 2026. Confirm figures at Services Australia.
Current Age Pension Rates (March 2026)
From 20 March 2026 (Services Australia):
| Maximum fortnightly payment | Annual equivalent | |
|---|---|---|
| Single | $1,200.90 | ~$31,223 |
| Couple (each) | $905.20 | ~$23,535 per person |
| Couple (combined) | $1,810.40 | ~$47,070 combined |
Rates are indexed each March and September. Next indexation is due September 2026.
What Combining Work and the Pension Actually Looks Like
The table below shows what happens to a single pensioner’s payment at different levels of part-time employment income, after the Work Bonus is applied.
| Fortnightly work income | Work Bonus applied | Assessable income | Pension reduction | Pension remaining |
|---|---|---|---|---|
| $200 | $200 exempt | $0 | $0 | Full $1,200.90 |
| $400 | $300 exempt | $100 | $50 | $1,150.90 |
| $518 | $300 exempt | $218 (free area) | $0 | Full $1,200.90 |
| $700 | $300 exempt | $400 (over by $182) | $91 | $1,109.90 |
| $1,000 | $300 exempt | $700 (over by $482) | $241 | $959.90 |
Please note: All figures, projections and scenarios in this article are approximate and for illustrative purposes only. Individual outcomes will vary based on personal circumstances, investment returns, fees, and current government policy. This is general information, not personal advice.
The takeaway most people miss is that even at $1,000 a fortnight in wages, this person still receives almost $960 in pension. Their combined fortnightly income is nearly $2,000. Compare that to relying on the pension alone at $1,200.90, and the case for picking up some part-time work is pretty obvious.
Three Real-Life Scenarios
These are the kinds of situations we see week in, week out at Wealthlab.
Scenario 1: Jenny, single, a few retail shifts a week
Jenny is 68 and works 12 hours a week at a homewares shop, earning $450 a fortnight. The Work Bonus exempts the first $300, leaving $150 assessable. That’s below the $218 free area, so her pension isn’t reduced at all.
Jenny gets the full pension ($1,200.90 a fortnight) plus her $450 wages. Total: $1,650.90 a fortnight, or roughly $43,000 a year. She enjoys the social side of the job and finds the extra money makes a real difference at the supermarket.
Scenario 2: David and Sue, both picking up a bit of work
David and Sue are both 70. David earns $300 a fortnight tutoring two days a week. Sue earns $200 a fortnight from some bookkeeping work she does from home.
David’s $300 is fully exempt under his Work Bonus. Sue’s $200 is fully exempt under hers. Their assessable employment income is zero. They keep the full combined pension of $1,810.40 plus their $500 in wages. Total fortnightly income: $2,310.40.
This is genuinely how the system is designed to work. Two retirees, each doing a manageable amount of work they enjoy, with no pension reduction at all.
Scenario 3: Margaret, taking a short-term contract
Margaret is 69. She hasn’t worked since retiring two years ago, which means her Work Bonus bank has been quietly building. It now sits at the maximum of $11,800.
She gets offered an eight-week seasonal contract paying $2,000 a fortnight. Most retirees in her position assume their pension is about to take a hit. It doesn’t, or at least not much.
Her $11,800 banked Work Bonus is drawn down against her employment income over those eight weeks. The bulk of her income is sheltered from the income test, and her pension reduces only modestly depending on timing. This is exactly the situation the Work Bonus bank is built for, and it’s one of the most under-used features of the Age Pension system.
Phil and Dan walked through several Age Pension scenarios like these in our episode on how the Age Pension actually works. One of the cases Phil shared involved a client who saved $25,000 in CGT just by delaying the sale of an investment property by one financial year, then dropped it further to $11,000 using catch-up super contributions. The point being: small timing decisions on the pension and around retirement income can move the needle significantly. Watch the full episode on YouTube.
What You Have to Report to Centrelink
Working while on the pension comes with a reporting obligation. You report all employment income to Centrelink, even when the Work Bonus means it has zero impact on your payment.
Reporting options:
- myGov account linked to Centrelink
- The Express Plus Centrelink app
- Phone: 132 300
- In person at a Services Australia service centre
Report each fortnight if your income varies. If your hours change, update Centrelink promptly. Failure to report properly can result in overpayments you’ll have to repay, which is the kind of administrative headache nobody needs in retirement.
One thing worth flagging from practice experience: we generally find clients who set up automated fortnightly reporting through the Centrelink app have the smoothest run. Those trying to remember to do it manually tend to miss fortnights, then end up dealing with backdated calculations months later.
Your Pensioner Concession Card While Working
If your part-time work reduces your pension, you generally keep the Pensioner Concession Card as long as you’re still receiving any pension payment, even a small one.
The card is worth holding onto. It gives you:
- PBS medications at the concession rate
- Discounted public transport in most states
- Utility rebates
- Council rate concessions
- Often a few hundred dollars in extra benefits depending on where you live
In practice, the value of the card to a typical household is somewhere between $2,000 and $5,000 a year. That’s another reason it can be worth structuring your income to keep at least a part pension going, rather than losing the pension entirely.
Super Contributions While Working After 67
If you’re working part-time after 67 and earning at least the threshold, your employer pays the Super Guarantee (12% from 1 July 2025) into your super. That money keeps growing tax-effectively in your super account.
From age 75, employers are no longer required to pay super contributions, although some still do.
The combination of part-time wages, the Age Pension, and ongoing super contributions is a quietly powerful one. Your pension provides a stable income floor. Your wages give you flexibility and engagement. And your super keeps building in the background.
If you want to dig deeper into how super works after pension age, our superannuation page covers it. For more on the assets and income tests, our pension and Centrelink page goes through the rules in detail.
Want to see how your own numbers stack up? Try the free Wealthlab retirement calculator for a quick snapshot of where you stand.
FAQ: Working Part-Time and the Age Pension
Can I work and still receive the full Age Pension? Yes, if your total assessable income stays below the income free area. For a single pensioner, the Work Bonus means you can earn up to $518 a fortnight in employment income ($300 Work Bonus plus $218 free area) before your pension reduces at all. Couples have higher combined thresholds.
How much can I earn before my pension reduces? A single pensioner can earn up to $518 a fortnight in employment income before any reduction. Above that, the pension reduces at 50 cents per dollar of assessable income. Figures are current as at 20 March 2026 from Services Australia.
What is the Work Bonus and how does the bank work? The Work Bonus exempts the first $300 a fortnight of employment income per person from the income test. If you don’t work, the unused $300 builds up in a bank that can reach $11,800. That banked amount is drawn down when you do work, sheltering that income from the pension test.
Will working affect my super? If you’re under 75 and your employer is required to pay the Super Guarantee, your super keeps growing through employer contributions. Working part-time after pension age can top up your super while the pension provides a base income.
What happens if I earn too much? Your pension reduces at 50 cents per dollar above the income free area. It tapers, it doesn’t cut off. You may still qualify for a part pension, keep your Pensioner Concession Card, and return to a higher rate later if your income drops.
Do I have to stop working to get the Age Pension? No. You can keep working part-time, casually or on contracts for as long as you like. The Work Bonus and income test are designed to allow exactly this.
What do I need to report to Centrelink? All employment income, even if the Work Bonus means it doesn’t reduce your payment. Report fortnightly through myGov, the Centrelink app, by phone, or in person. Update Centrelink promptly when your income changes.
What is the maximum Age Pension in 2026? From 20 March 2026, the maximum is $1,200.90 a fortnight for singles (about $31,223 a year) and $1,810.40 combined a fortnight for couples (about $47,070 a year). Rates update each March and September.
What to Do Next
Working part-time while receiving the Age Pension isn’t just allowed. For a lot of Australians, it’s one of the most sensible ways to ease into full retirement. The Work Bonus tilts the maths heavily in favour of employment income, and combining a part pension with modest wages often produces a meaningfully higher total income than either alone.
If you want to talk through how your own income, assets, and pension situation fit together, have a chat with the Wealthlab team. No pressure, no jargon. Or if you’d prefer a quick general read on where you stand, take the free Wealthlab retirement quiz.
