Work and retirement – do they mix?

By Thursday, October 23, 2014 0 , , , , Permalink 15

 

The terms “work” and “retirement” at first appear to be at the extreme opposing ends of the spectrum, but for a portion of the population, this is certainly not the case. Work does a couple of very important things outside providing a person with an income so that they can survive on a weekly basis.

Work allows you to continue to contribute to society, broaden your social circle and also provides a purpose. Combined, these three benefits will also contribute to a longer and more importantly healthier life.

The work that you do in retirement does not need to be a continuations of your previous working career. Remember, you are not looking to build a new career, you just want to contribute to society and pick up some extra cash. So what may appear to be menial jobs such as shelf packing, stop go sign operators, headstone restorer or barista, should never been seen as being beneath you or your abilities.

The reason you are working now is entirely different to the reasons you worked pre-retirement. For the part age pensioner the extra reason to find work is the generous “work bonus” income test which applies to your earned income. The work bonus not only allows you to earn $250 over a 14 day period without any effect on your age pension. It also allows you to build a bank of $6500 in credit which equates to $250 multiplied by 26 fortnights. So what this means is that for the age pensioner who enjoys playing Santa Claus every Christmas in the local shopping mall (depending on how much Santa is paid), they could work every year during this period pick up some extra cash and not have their pension effected as a result of building credits during the year.

But like all government legislation, it does not come without some pitfalls. For example if you earned $500 over a five day period instead of a 14 day period, the amount of income taken into account for the fortnight would not be $250 but $410.

The reason behind this is, the way the allowable threshold is calculated the easiest way to explain is to say the in a 14 day period for every day you work you are allowed to earn $17.85 before your earnings for the day would have an effect on your pension entitlement. Complicated and difficult to understand?  Without a doubt, “yes”, and for you the solution is easy – just ask the questions and be aware of the benefits of the work bonus as well as the pitfalls before you start your “menial job”.

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