Source: http://clik.dva.gov.au/print/book/export/html/16465
Timestamp: 2019-08-18 07:42:13
Document Index: 221227597

Matched Legal Cases: ['art 10', 'art-10', 'art10', 'art10', 'art10', 'art10']

﻿ 10.1.8 Work Bonus
Home > Compensation and Support Policy Library > Part 10 Types of Income and Assets > 10.1 Ordinary Income > 10.1.8 Work Bonus
The Work Bonus [2] was introduced on 20 September 2009 and replaces the former Pension Bonus Scheme, as a scheme to encourage and reward older Australians who remain in the paid workforce past their normal retirement age. In addition to an age requirement, the income must be received by the person in an employee capacity or generated as gainful work income such as as business earnings from self-employment that meet the personal exertion test.
Where a person who receives service pension or income support supplement has reached qualifying age [2] and they receive employment income arising from remunerative work undertaken as an employee in an employer/employee relationship, an income test concession (known as Work Bonus [2]) applies.
Under this income test concession, the first $300 of the person's fortnightly work bonus income [4] is excluded from the income test. The income concession amount is not subject to indexation. Where the fortnightly employment income is less than $300 per fortnight, the unused portion of the $300 per fortnight income concession to a work bonus bank [2] to offset their work bonus incom [4]e in the future.
Note: From 20 September 2009 to 27 June 2011, only half of the first $500 of the person's fortnightly employment income was disregarded. From 28 June 2011 to 30 June 2019 the work bonus was $250 per fortnight. The work bonus bank [5] was also introduced on 28 June 2011.
To receive the benefit of the Work Bonus [2] a person's income support pension must be assessed under the Rate Calculator using the 50c income test taper rate, i.e. they must not be in a transitional assessment continuing to be calculated under pre September 2009 Secure and Sustainable Pension Reform rules, with the 40c income test taper rate. While transitional assessments do not attract the work bonus discount, a pension rate calculation under the post September 2009 rules including the work bonus is carried out for comparison purposes, to work out when the pension rate payable is higher under the post September 2009 rules. A work bonus bank is maintained for transitional pensioners for the purpose of the comparative calculation.
Section 46AA [6] VEA – Income concession
Section 5Q(1) [6] VEA – General definitions
The work bonus exempts the first $300 per fortnight of work bonus income [4] for eligible people over pension age [2] or qualifying age [2].
Qualifying age is defined in section 5Q(1) of the [8]VEA [8]and is equivalent to the pension age for a veteran which is described in section 5QA VEA as:
The unused portion of the fortnightly $300 per fortnight work bonus income concession can be accrued to a maximum of $7,800. Any amount of work bonus bank credit can be used to offset future assessable work bonus income [4].
Section 46AB [6] VEA – Meaning of employment income
Employment income [2] is income earned, received or derived from remunerative work as an employee, in an employer/employee relationship. Income from self-employment as a Sole Trader business, or other forms of business income, is not employment income but may be defined as gainful work income for the work bonus. See gainful work income.
Section 46AB [6] VEA - Meaning of employment income
A person receives a $10,000 distribution from a trust. The Work Bonus [12] will only apply to that amount to the extent that the person could show that they had performed work commensurate to the amount paid.
Where a work bonus eligible person has nil or less than $300 work bonus income per fortnight, they will accrue the unused amount of the work bonus income concession in a work bonus bank [2]. The difference between $300 and the gross work bonus income [4] each fortnight is credited to their work bonus bank to a maximum balance of $7,800. The balance in a person's work bonus bank will then reduce their work bonus income that would otherwise be assessable in the future.
When a person's work bonus bank credit is applied to reduce their assessable work bonus income [4], their work bonus bank balance will deplete. This depletion will occur when a person has work bonus income greater than the $300 per fortnight income concession amount and they have a work bonus bank credit balance.
Section 46AC [6] VEA
Section 115D [6] VEA – Reduced daily pension amount - pensions under Parts II and IV
As VVRS and work bonus both result in discounted employment income, the VEA allows the more beneficial pension outcome to be applied. Where the Work Bonus [2] income test concession applies to a pensioner and the income concession amount is equal to or greater than the VVRS excluded income amount, the VVRS excluded income amount does not apply and the pensioner is given the benefit of the Work Bonus income concession. Where the Work Bonus income concession is less than the VVRS excluded income amount, the Work Bonus income concession does not apply and the pensioner is given the benefit of the VVRS excluded income amount.
Source URL (modified on 04/07/2019 - 8:44am): http://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/101-ordinary-income/1018-work-bonus
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