Yes, you can work part-time and still receive the Age Pension. Not only is it allowed, the government actively encourages it through a scheme called the Work Bonus, which lets Age Pension recipients earn employment income without it immediately reducing their payment.
Understanding how the income test and the Work Bonus interact is the key to combining part-time work and the pension without unnecessary surprises. This guide covers how it works, the current figures, real examples, and what you need to report to Centrelink.
How the Age Pension Income Test Works
The income test determines how much Age Pension you receive if you have income from any source, including employment, investment returns, superannuation drawdowns and rental income.
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) |
If your total assessable income is below the free area, you receive the full pension. Above the free area, your pension reduces by 50 cents for every dollar over the threshold. Working part-time does not disqualify you from the pension. It simply affects how much you receive, depending on how much you earn.
The good news is that employment income is treated more favourably than most other income sources, because of the Work Bonus.
The Work Bonus: How Employment Income Is Treated
The Work Bonus is a separate concession that applies only to income from employment or self-employment. It is on top of the standard income free area.
How it works:
The first $300 per fortnight of employment income per person is excluded from the income test entirely. This means a working single pensioner can effectively earn $518 per fortnight ($218 free area plus $300 Work Bonus) before their pension starts reducing.
The Work Bonus accumulation bank:
If you are not working, or earning less than $300 per fortnight from employment, the unused Work Bonus accumulates in an income bank. This bank can build up to a maximum of $11,800. When you take on paid work, the banked amount is drawn down first before the income test kicks in.
This makes the Work Bonus particularly valuable for people who work seasonally, take on short-term contracts, or return to casual work for a period. A pensioner who has built up the full $11,800 bank can earn that amount in employment income without any pension reduction at all, regardless of when the work occurs.
Current as at May 2026. Confirm current Work Bonus 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 due September 2026.
What Combining Work and the Pension Actually Looks Like
The table below shows how a single pensioner’s fortnightly payment is affected at different levels of part-time employment income, after the Work Bonus is applied.
| Fortnightly employment 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 free area by $182) | $91 | $1,109.90 |
| $1,000 | $300 exempt | $700 (over free area by $482) | $241 | $959.90 |
Most part-time workers earning $400 to $600 per fortnight find their pension reduces by only a modest amount, and in many cases the combined income from work and pension is meaningfully higher than the pension alone.
These are illustrative examples only. Actual pension entitlements depend on your full income and assets position. This is general information, not personal advice.
Three Real-Life Scenarios
Scenario 1: Jenny, single, working a few retail shifts per week
Jenny is 68 and earns $450 per fortnight from casual retail work.The Work Bonus exempts the first $300, leaving $150 as assessable income. That is below the $218 free area, so there is no pension reduction.
Jenny receives her full pension of $1,200.90 per fortnight plus $450 in wages, for a total fortnightly income of $1,650.90.
Scenario 2: David and Sue, both working part-time
David and Sue are both 70. David earns $300 per fortnight and Sue earns $200 per fortnight.David’s $300 is fully exempt under the Work Bonus. Sue’s $200 is fully covered by the combined Work Bonus. Their total assessable employment income is $0.
Their combined Age Pension of $1,810.40 per fortnight continues unchanged, plus $500 in combined wages.
Scenario 3: Margaret, taking a short-term contract
Margaret is 69 and has not worked since retiring. Her Work Bonus bank has accumulated to the maximum of $11,800.She accepts a two-month seasonal contract paying $2,000 per fortnight.
Her banked Work Bonus of $11,800 is drawn down against the employment income across the contract period. Most of her income is sheltered from the income test, and her pension reduces only modestly or not at all depending on the timing.
This is exactly what the Work Bonus bank is designed for: it allows pensioners to take on occasional work without an immediate and sharp pension reduction.
What You Must Report to Centrelink
Receiving the Age Pension while working comes with a reporting obligation. You must report employment income to Centrelink, even if the Work Bonus means it has no impact on your payment.
You can report through:
- Your myGov account linked to Centrelink
- The Centrelink Express Plus app
- Phone on 132 300
- In person at a Services Australia service centre
Report every fortnight if you have variable income. If your income changes, update Centrelink promptly. Failure to report accurately can result in overpayments that must be repaid.
If you receive super guarantee contributions from your employer while working after age 67, these go into your super accumulation account and continue growing. This is a genuine benefit of staying in the workforce, even part-time, beyond pension age.
Phil and Dan covered Age Pension optimisation strategies including how to maximise what you receive while earning income in Episode 20 of the Wealthlab Podcast. Watch Episode 20 on YouTube.
Your Pensioner Concession Card While Working
Most Age Pension recipients automatically receive a Pensioner Concession Card. If you continue working and your pension payment reduces due to employment income, you generally keep the Pensioner Concession Card as long as you are receiving any level of pension payment, even a part pension.
The card provides concession PBS medication prices, discounted public transport in most states, utility rebates and council rate concessions. Its annual value is typically $2,000 to $5,000 per household, making it worth actively managing your pension and income to retain any level of payment where possible.
Super Contributions While Working After 67
If you work part-time after age 67 and your employer pays the 11.5% Super Guarantee on your wages, those contributions go into your super accumulation account. From age 75, employers are no longer required to make super contributions, though some do.
Working even a small number of hours per week can therefore continue building your super balance and long-term financial security, while your Age Pension continues providing a meaningful income floor.
Our superannuation page has more on how super works after pension age. Our pension and Centrelink page covers the full income and assets test rules.
FAQ: Working Part-Time and the Age Pension
Can I work and still receive the full Age Pension? Yes, if your total assessable income remains below the income free area. For a single pensioner, the Work Bonus means you can earn up to $518 per fortnight in employment income ($300 Work Bonus plus $218 free area) before your pension reduces at all. Couples can earn more in combined terms.
How much can I earn before my pension reduces? A single pensioner can earn up to $518 per fortnight in employment income before any reduction, thanks to the Work Bonus. Above that, the pension reduces at 50 cents per dollar of assessable income. Income free areas and rates 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 per fortnight of employment income per person from the income test. If you do not work in a given fortnight, the unused $300 accumulates in a bank that can reach a maximum of $11,800. This banked amount is then drawn down when you do work, sheltering that income from the pension test.
Will working affect my super? If you are under 75 and your employer is required to pay the Super Guarantee, your super continues growing from employer contributions. Working part-time after pension age can therefore simultaneously top up your super while your pension provides a base income.
What happens if I earn too much? Your pension reduces under the income test at 50 cents per dollar above the assessable income free area. It does not stop abruptly. You may still qualify for a part pension, retain your Pensioner Concession Card, and return to a higher pension rate if your income later decreases.
Do I have to stop working to get the Age Pension? No. You can continue working part-time, casually or on contracts for as long as you choose. The Work Bonus and income test are specifically designed to allow this.
What do I need to report to Centrelink when working? You must report all employment income to Centrelink, even if the Work Bonus means it does not reduce your payment. Report fortnightly through myGov, the Centrelink app, phone or in person. Changes in income should be reported promptly to avoid overpayments.
What is the maximum Age Pension in 2026? From 20 March 2026, the maximum is $1,200.90 per fortnight for singles (approximately $31,223 per year) and $1,810.40 combined per fortnight for couples (approximately $47,070 per year). Rates are updated each March and September. Check current rates at Services Australia.
What to Do Next
Working part-time and receiving the Age Pension is not just allowed, it is one of the most financially sensible ways to transition into full retirement. The Work Bonus makes part-time employment particularly attractive for pensioners, and combining modest employment income with the pension often produces a significantly higher total income than either source alone.
If you want to understand how your specific income and asset position interacts with the pension, take the free Wealthlab retirement quiz for a general read. Or book a free, no-pressure chat with the Wealthlab team to talk through how work and pension fit together for your circumstances.
