What Happens If Your Work Stops Your Pension

# What Happens If Your Work Stops Your Pension

Somebody offers you three months of work. Good money, a job you would enjoy, and you are 68. Then you do the sums and it looks like a trap. The income would push you over the line, the pension would stop, and — you assume — you would lose the concession card and have to claim the whole thing again afterwards. So you say no.

A great many people say no on exactly that reasoning, and almost none of them need to. There are two provisions built for this situation, they are barely written about, and both have become considerably more generous in the last few years.

This is general information, not personal financial advice. Whether either applies to you depends on your circumstances, so confirm your own position with Services Australia before you commit to anything.

Stage one: the employment income nil rate period

If your pension stops being payable because your ordinary income is too high — and that income is made up entirely or partly of employment income, yours or your partner's — you may qualify for what is called an employment income nil rate period (DSS Social Security Guide 3.1.12, https://guides.dss.gov.au/social-security-guide/3/1/12).

The name is bureaucratic and the effect is not. You remain, in the relevant sense, a pensioner on a nil rate rather than a former pensioner. The period runs until 12 consecutive fortnights — 24 weeks — after the end of the instalment period in which the nil rate determination happened, which in practice works out to somewhere around 12 to 13 fortnights. It ends earlier if your payment is reinstated because your income drops, whichever comes first.

If you have read somewhere that this is 12 weeks, that was true and is now out of date. From 1 July 2024 the period was extended from 6 fortnights to 12 fortnights — from twelve weeks to twenty-four. A lot of material still carries the old figure, so if you have been planning around three months, you have twice the runway you think. That difference is not academic: twelve weeks rules out a great deal of seasonal and contract work, and twenty-four does not.

During the nil rate period you are considered to be receiving a pension or benefit — but only for the purposes of qualifying for certain supplementary payments and allowances, among them Telephone Allowance, Pensioner Education Supplement and Rent Assistance. That "only" is doing real work. It does not mean your pension is treated as continuing generally, and the named payments are not a list to extrapolate from. If a particular entitlement matters to you, ask about that one specifically. Our article on Rent Assistance for pensioners covers the one that matters most to renters.

Stage two: for Age Pension, the payment is suspended rather than cancelled

Here is the part that changes the decision, and it is specific to Age Pension.

From 1 January 2023, where an Age Pension recipient's total income exceeds their income limit and some of that income is from employment, the payment may be suspended for up to 2 years instead of being cancelled (DSS Social Security Guide 3.4.1.70, https://guides.dss.gov.au/social-security-guide/3/4/1/70). Services Australia puts the trigger plainly: if your income goes over the cut-off point you are paid $0 for that fortnight, and "if your total income goes over the cut off point for more than 12 fortnights in a row, we'll suspend your Age Pension payment for up to 2 years" (https://www.servicesaustralia.gov.au/working-while-youre-getting-age-pension?context=22526, as at August 2026).

You do not have to ask for this. It happens automatically, and Services Australia tells you the start and end dates of the suspension period. During it you keep your Pensioner Concession Card for up to 2 years, and you do not need to report your employment income. The maximum suspension is 2 years, after which the payment must be cancelled — so it is a long runway, not an indefinite one.

The two provisions sit end to end rather than overlapping, and the mechanics of getting the payment back differ. Within the nil rate period, reporting a fall in income sufficient to give you at least a part rate allows the payment to be resumed without lodging a new claim — and the active verb matters, because it resumes when the change is reported, not by itself. Once the payment has moved into suspension, you ask for it to be restored: Services Australia's instruction is that you can ask within 2 years if your income drops below the Age Pension cut-off, by calling the Centrelink Older Australians line. Either way, the thing you are avoiding is a fresh claim — and anyone who has been through an Age Pension claim knows what that is worth. Our article on using myGov and Centrelink online services covers reporting, and our article on the Centrelink review process covers what follows.

The three conditions for retaining the concession card in the shorter case are worth knowing in their own right: your rate is calculated using the income test, your payment stops because of employment income, and without that employment income you would continue to qualify for the card (DSS Social Security Guide 3.9.2.30, https://guides.dss.gov.au/social-security-guide/3/9/2/30). For most pensioners the card is worth a great deal more than its low profile suggests — our article on the value of a small part Age Pension and the concession card sets out how much, and our comparison of concession cards covers what each one does.

The limit that matters most

Everything above depends on one thing: this is the employment income provision, in both of its stages.

It is triggered by ordinary income made up entirely or partly of personal or partner employment income — wages, salary, work for an employer. It is not triggered by other income. So if your pension stops because you sold shares and made a capital gain, or because of a large distribution, or because deeming on a term deposit pushed you over, or because you received an inheritance, none of this applies. No nil rate period, no card extension, no suspension, and a new claim if you want the pension back. Our articles on deeming rates and on how lump sums are treated cover those income types, and our article on the Age Pension income test covers how the payment gets taken to nil in the first place.

The suspension rule is narrower still, and this catches people. The DSS Guide describes it as requiring income from remunerative work performed in Australia as an employee in an employer/employee relationship — which does not describe self-employment. If you are contracting through your own entity or running a business rather than being employed, do not assume the two-year suspension is available to you; our article on self-employment income and the Age Pension covers that territory, and this is a question to put to Services Australia specifically rather than reason your way through.

One more point almost nobody expects: the nil rate period refers to personal and/or partner employment income, so the person whose payment stops does not have to be the person working. If your partner takes a substantial job and household income takes your pension to nil, you may be the one in the nil rate period. The DSS Guide also indicates that partners of suspended Age recipients may have access to the same suspension period — stated as "may", so treat it as a question to confirm rather than a guarantee.

Worked examples

Robert, 68, single, full Age Pension, owns his home. A former colleague offers him a six-month contract at around $75,000 a year pro rata. His employment income takes him over the income cut-off, and after the first fortnight he is paid $0. On these facts the sequence is that he enters an employment income nil rate period running 12 fortnights — 24 weeks — from the end of the instalment period in which the nil rate determination is made, keeping his Pensioner Concession Card and certain supplementary payments throughout. Because his contract runs about 26 weeks, his income stays over the cut-off for more than 12 fortnights in a row, so his Age Pension is then suspended automatically rather than cancelled, with the card retained for up to 2 years. When the contract ends he asks for the payment to be restored rather than lodging a new claim. What is generally rational here is to take the work and diarise the restoration request for the week the contract finishes — the risk in his position is not the rules, it is forgetting that the payment does not restart by itself.

Susan and Greg, 70 and 66, part pensioners, renting. Greg is under Age Pension age and takes a full-time job; the household income takes Susan's part pension to nil even though she is not the one working. On these facts Susan may still be in an employment income nil rate period, because the provision covers personal and/or partner employment income — and Rent Assistance is one of the supplementary payments named as continuing to be available during it, which for a renting couple is the most significant part of the outcome. What is generally rational is for Susan to confirm with Services Australia both whether the nil rate period applies to her on these facts and whether she has access to the suspension period as the partner of a suspended recipient, since the Guide frames that as "may" rather than automatic. What would not be rational is Greg declining the job on the assumption that Susan's pension and card are lost.

Before you take the work

Check which income is causing it, because employment income opens all of this and other income does not. Ask Services Australia to confirm your position before you commit rather than after — the conditions on the card and the employer/employee requirement for suspension are both worth verifying against your own circumstances. Work out the timing, because two years is generous but finite, and a contract that runs longer changes the decision. Check the Work Bonus first: if the work is smaller than you think you may not go to nil at all, since the Work Bonus reduces how much employment income is assessed, and our articles on the Work Bonus scheme and on working in retirement cover it — this article is about what happens when the income is too large for that to be enough. And report promptly at both ends, when the income starts and when it stops, because the whole mechanism depends on Centrelink knowing what your income is doing.

The one-line version

If employment income — yours or your partner's — takes your Age Pension to nil, you get a 24-week nil rate period, and if the income stays high the payment is suspended for up to two years rather than cancelled, with the concession card kept throughout and the pension restored on request instead of by a new claim. If something other than employment income takes it to nil, none of that applies.

Sources

• DSS Social Security Guide 3.1.12 — Employment income nil rate period
• DSS Social Security Guide 3.4.1.70 — Suspension instead of cancellation for Age recipients with employment income
• Services Australia — Working while you're getting Age Pension
• DSS Social Security Guide 3.9.2.30 — PCC extension rules
• DSS Social Security Guide 1.2.8.20 — Pensioner Concession Card description
• Services Australia — Income from employment (Age Pension)

This article contains general information only. It does not constitute personal financial advice and does not take into account your individual financial situation, objectives, or needs. Qualification for an employment income nil rate period, suspension of Age Pension instead of cancellation, retention of the Pensioner Concession Card, and continued access to supplementary payments all depend on conditions being met in your particular circumstances, and the treatment described applies to employment income rather than to income of other kinds. The suspension provision described requires employment in an employer/employee relationship and is not a statement about self-employment. Rules and periods are subject to change — the current 24-week nil rate period took effect on 1 July 2024, replacing a 12-week period, and the Age Pension suspension provision commenced on 1 January 2023. The worked examples are illustrations only and are not based on real people. Confirm your own position with Services Australia before making decisions about taking on work. Information is current as at 9 August 2026.

Theodore Karoumbalis is an Authorised Representative (No. 1237098) of iAdvice Technology Pty Ltd, AFSL 526700.