Maximum Income After Retirement: How Much Can You Earn?

You’re all set for retirement, but you want to continue to bring in a bit of income. You’re just not sure how much you can earn without paying taxes or losing the pension.

So, how much money can you make after retirement? What is the maximum income you can earn?

Let’s find out.

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How Much Money Can You Make After Retirement?

Once you have retired, you can continue to make as much money as you like. There is no limit on the level of income you can earn in Australia. However, the more you earn after retirement, the more tax you will pay and the more you risk reducing or even losing Centrelink Age Pension payments.

How Much Can a Retired Person Make Without Paying Taxes?

A retired person can make up to $18,200 per year without paying taxes. This is the tax-free threshold. Each dollar you earn over this will incur income tax of 19%, plus the Medicare Levy, where applicable.

However, this $18,200 refers to taxable income only and does not take into account the Seniors and Pensioners Tax Offset (SAPTO), which applies to retirees who meet certain eligibility criteria.

If you are eligible for the SAPTO, you could earn up to $33,000 per year without paying any income taxes.

Furthermore, if you receive superannuation pension payments, the payments will generally not be assessed for tax purposes from age 60 and above. This means that these income stream payments will not count towards the $18,200 tax-free threshold.

Any Centrelink Age Pension payments are counted as taxable income.

How Much Can I Earn While on the Pension?

The amount you can earn while on the pension is $300 per fortnight in work-related income. This is referred to as the Work Bonus as is the amount that is not assessed for Centrelink Age Pension Income Test purposes.

Also, if you don’t use up the total Work Bonus amount in any given fortnight, the unused Work Bonus amount will accumulate in your own personal Work Bonus balance, which can be carried-forward indefinitely and used in the future. The maximum your Work Bonus balance can accumulate to is $7,800. However, this limit will temporarily increase to $11,800 between the dates of 1 December 2022 until 31 December 2023, at which stage it will revert back to $7,800 from 1 January 2023.

Keep in mind, the amount you can earn while on the pension from work-related earnings is different from the amount you can earn from all sources of income.

Let’s take a look at how much income you can earn before losing some of the Age Pension and before losing the pension altogether.

How Much Can I Earn Without Losing Any Pension?

The amount you can earn without losing any part of the Age Pension is $204 per fortnight for a single person or $360 per fortnight for a couple (combined), plus $300 per fortnight in work-related income per person (Work Bonus). These amounts include investment income, deemed income and other sources of income. Learn more here about types of income, here.

Therefore, a single person can have a total income of up to $604 per fortnight before losing any part of the Age Pension, under the Income Test. A couple can have a total income of up to $960 per fortnight, combined, before losing any part of the Age Pension.

Age Pension payments are reduced by 50 cents per person for each dollar over $204 of assessable income for a single or $360 per couple (not including the Work Bonus).

How Much Can I Earn Without Losing the Pension Completely?

The amount you can earn without losing the pension completely is $2,332 per fortnight for a single person or $3,568 per fortnight for a couple (combined), plus $300 per fortnight in work-related income per person (Work Bonus).

Therefore, a single person can have a total income of up to $2,632 per fortnight before completely losing the Age Pension completely, under the Income Test. A couple can have a total income of up to $4,668 per fortnight, combined, before completely losing the Australian Age Pension, including the maximum work bonus.

Ignoring non-assessable Work Bonus income, a single person will have their Age Pension payments reduced by 50 cents per fortnight for each dollar per fortnight of assessable income over $204. A couple will have their Australian Age Pension payments reduced by 50 cents per fortnight, combined, for every assessable dollar over $360 per fortnight, combined.

Learn More: How Much Can I Have and Still Get the Pension?

If I Retire at 65 How Much Can I Earn?

If you retire at 65 you can earn as much as you like. There is no restriction in Australia on how much a pensioner or retiree is able to earn. However, the amount you earn may affect your taxes and Age Pension entitlements, as explained above.

How Much Money Can You Have and Still Get the Australian Pension?

The amount of money you can have and still get the Australian Pension is $634,750 for a single homeowner or $859,250 for a non-homeowner and $954,000 for a homeowner couple, combined, or $1,178,500 for a non-homeowner couple.

Having up to these amounts in assessable assets allows you to receive at least part- Australian Age Pension payments under the Assets Test.

If you want to receive full-Australian Age Pension payments under the Assets Test, the amount of money you can have is $301,750 for a single homeowner or $543,750 for a non-homeowner and $451,500 for a homeowner couple, combined, or $693,500 for a non-homeowner couple.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

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Thanks for stopping by - Chris