Pension Bonus Scheme

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  1. What is the Pension Bonus Scheme
  2. Who can receive it
  3. How much you can receive
  4. How you claim
  5. What to tell us
  6. Important information

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What is the Pension Bonus Scheme

We can pay a lump sum bonus if you have registered in the scheme and kept working instead of claiming an income support payment‌.

Income support payments include:

  • Service Pension
  • Age Pension
  • Income Support Supplement‌

The scheme does not prevent you from claiming an income support payment. You can claim at any time after registering. The amount of time you continue to work for will generally increase the amount of bonus you receive. There is a minimum amount of hours and period of time related to getting the bonus.

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Who can receive it

The scheme closed to new registrations on 1 July 2014. You can still get a Pension Bonus if you:

  • registered for the scheme before 1 July 2014

  • are eligible for the Service Pension, Age Pension or Income Support Supplement (ISS) but have not claimed it

  • kept working for at least 12 months from the date you registered for the scheme; and

  • did paid work‌ for at least 960 hours in the first year, and in any other year that will count towards your Pension Bonus

Paid work can include self-employment. You need to be putting in effort to provide goods or services for financial reward. It doesn’t include managing your financial investments or domestic work in your own home.‌

If you did not register for the Pension Bonus Scheme before 1 July 2014, you may be eligible for the Work Bonus instead.

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How much you can receive

How much you receive will depend on both:

  • your income and assets at the time you claim the Service Pension, Age Pension or ISS

  • how long you have kept working instead of claiming a pension

It is not possible to calculate the exact amount before you claim. In general the amount is based on all of the following:

  • the amount of income support payment you would get in a year‌

  • your income and assets when you claim

  • the number of years you have worked instead of claiming a pension.

We may use a different formula if your situation changes between registering for the scheme and claiming a pension. This would apply if you start or stop living with a partner during that time, or if you claim a different income support payment from the one you intended to.

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How you claim

If you registered for the Pension Bonus Scheme before 1 July 2014, you can make application when you claim the Service Pension, Age Pension or Income Support Supplement.

You can download and complete D559 to claim Pension Bonus.

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What to tell us

Let us know if you stop working or reduce your hours to below 960 a year. If this happens you need to claim your Pension Bonus within 13 weeks.

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Important information

  • If you claim and your income and assets are too high for us to pay you an income support payment, you will not get any Pension Bonus.

  • Once you have worked instead of claiming pension for 5 years, you cannot accrue any more Pension Bonus.

  • It is a good idea to get financial advice about when to stop working and claim a pension.

  • You may not need to stop working to claim a pension and get your Pension Bonus. You may then be able to benefit from the Work Bonus.

  • Time spent working instead of claiming a pension only counts towards your Pension Bonus if you work at least 960 hours‌ per year. On average that equals 20 hours a week, if you get 4 weeks of leave.

  • You need to be working in Australia for at least 640 of the required 960 hours each year.‌

  • If you work for part of a year, we will calculate your required number of hours in proportion to the number of days in that period.

  • Leave doesn’t count towards your required number of hours, even if it’s paid leave. Brief absences may count if they’re not frequent or regular.

  • If you and your partner both registered for the Pension Bonus Scheme before it closed, but only one of you is working at least 960 hours a year, you can both get a Pension Bonus. If you both work, you can’t combine your hours to make a total of 960 hours between you.

  • We calculate your Pension Bonus based on your income support payment alone, not including any supplements or allowances.

  • If you’re claiming the Service Pension as a veteran, or ISS as a War Widow/er, you can’t accrue any more Pension Bonus once you turn 70.

  • If you’re claiming the Service Pension as a partner of a veteran, or claiming the Age Pension, you can’t accrue any more Pension Bonus once you turn 75.

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