Starting July 1, 2025, Centrelink will introduce a $4,000 increase for eligible pensioners through its Work Bonus income bank. This move is part of the Australian Government’s effort to help pensioners boost their earnings without reducing their Age Pension or other benefits. If you’re a current or soon-to-be Centrelink recipient, understanding how this boost works is crucial to maximizing your financial flexibility in retirement.

In this guide, we’ll explain what the $4,000 increase is, who qualifies, how it affects your pension, and how to ensure you’re making the most of the updated Work Bonus Scheme.

What Is the $4,000 Centrelink Increase?

The $4,000 increase refers to an automatic top-up to the Work Bonus income bank, which allows eligible pensioners to earn more from paid employment without impacting their pension entitlements.

Under the Work Bonus Scheme, pensioners can already earn up to $300 per fortnight from employment before their pension is affected. The scheme also accumulates any unused allowance into an income bank, which acts as a buffer to protect future earnings from reducing Centrelink payments.

With the new $4,000 boost, eligible recipients will start their pension period with a more generous income buffer, offering even greater flexibility to earn income without jeopardizing their government support.

Who Is Eligible?

To receive the $4,000 increase, you must meet the following criteria:

• Be a new Age Pension recipient on or after July 1, 2025.

• OR have started receiving the Age Pension between December 1, 2022, and June 30, 2024, without previously receiving the Work Bonus boost.

• Receive a qualifying Centrelink payment, including:

  • Age Pension

  • Disability Support Pension (if over qualifying age)

  • Carer Payment

• Be employed or planning to return to work in some capacity (part-time, casual, or seasonal).

This update is specifically targeted at pensioners with work capacity who are interested in remaining active in the workforce while receiving support.

How Does the Work Bonus Scheme Work?

The Work Bonus is designed to encourage older Australians to continue working without being penalized. It allows eligible recipients to:

• Earn up to $300 per fortnight from employment (excluding self-employment), without it counting towards the income test.

• Any unused amount of the $300 threshold is credited to an income bank, which can accumulate up to $11,800.

• This accumulated buffer can offset any future work income that exceeds the $300 threshold, ensuring pensioners continue receiving full or partial payments.

With the $4,000 top-up, new recipients starting from July 2025 will automatically have $4,000 credited to their income bank on day one, giving them immediate flexibility to earn without penalty.

Practical Example

Let’s say you’re a newly retired 67-year-old starting the Age Pension in July 2025. You pick up a part-time job that pays $500 per fortnight.

• The first $300 is already exempt under the Work Bonus.

• The extra $200 would normally reduce your pension.

• However, with the $4,000 Work Bonus bank, that $200 is offset — meaning your pension remains untouched until your income bank is used up.

Over time, this extra $4,000 allows you to earn more, stay active, and avoid any payment reductions for a longer period.

Payment Start Date

• The $4,000 Work Bonus increase will be automatically applied starting July 1, 2025.

• No applications are required — the boost will be added to eligible recipients’ income banks through Centrelink.

Income Limits and Allowances

Here’s how the new policy fits into existing income thresholds:

• Single pensioners can earn up to $212 per fortnight from any source before their pension is affected.

• Couples can earn up to $372 per fortnight combined.

With the Work Bonus of $300 and the new $4,000 top-up, these thresholds offer far more room for working pensioners to maintain their income while collecting government support.

How to Track Your Income Bank

You can monitor your Work Bonus balance and income bank by:

1. Logging in to your myGov account

2. Navigating to your Centrelink profile

3. Checking the Work Bonus or Pension details section

This will show your current Work Bonus balance and any unused income carried forward. It’s updated regularly to reflect reported earnings.

Reporting Work Income

Even if you benefit from the Work Bonus, it’s still mandatory to report your employment income every fortnight to Centrelink. Here’s how to stay compliant:

• Accurately record gross earnings from all jobs

• Submit updates via myGov, the Express Plus Centrelink app, or by phone

• Keep payslips and employment records in case you’re asked to verify your income

Incorrect or delayed reporting can lead to overpayments or suspension of your benefits.

Tips for Making the Most of the $4,000 Boost

1. Stay Below the $300 Fortnightly Cap When Possible

If you’re earning less than $300 per fortnight, your income bank continues to grow. This gives you flexibility in the future — for example, if you take on more hours or earn bonuses.

2. Use It for Seasonal or Short-Term Work

The Work Bonus is especially useful for retirees who only work part of the year — such as during holidays, tax season, or in agricultural work. The income bank ensures that you won’t be penalized for short-term earnings.

3. Avoid Unnecessary Deductions

Use your income bank strategically. If you’re nearing the income threshold that would reduce your pension, consider adjusting your hours or drawing from the bank to maintain your full payment.

Frequently Asked Questions

Do I have to apply for the $4,000 Work Bonus top-up?
No. The boost is applied automatically to eligible recipients beginning July 1, 2025.

Can I get the $4,000 if I already receive the Age Pension?
Only if you started receiving the Age Pension between December 1, 2022, and June 30, 2024, and have not yet received a previous Work Bonus boost.

Does this affect other payments like the Carer Payment?
Yes, if you’re receiving the Carer Payment and meet the age and work requirements, the boost applies.

Is this considered taxable income?
No. The Work Bonus is a calculation tool, not a cash payment. It offsets the impact of work income but is not considered income itself.

What if I stop working? Will I lose the Work Bonus?
No. Any unused amount rolls over and is retained in your income bank for future use.

Final Thoughts

The $4,000 Centrelink Work Bonus boost is a major step toward giving pensioners more control over their finances without sacrificing essential support. Whether you want to stay active in retirement, cover extra expenses, or simply enjoy a part-time job, this policy helps ensure that extra effort won’t be penalized.

For full details and updates, visit servicesaustralia.gov.au.