In short

The Pension Bonus Scheme paid a tax-free lump sum to people who deferred claiming the Age Pension and kept working. It closed to new registrations on 1 July 2014, but registrants who accrued qualifying bonus years can still claim when lodging an Age Pension claim. The maximum five-year bonus is approximately $58,839 for singles. Surviving partners of deceased registrants have a 26-week window to claim a Pension Bonus Bereavement Payment.

The Pension Bonus Scheme (PBS) was an Australian government program that paid a tax-free lump sum bonus to people who deferred claiming the Age Pension and continued to work. The scheme is closed — Services Australia is no longer accepting new registrations — but people who registered before 1 July 2014 and met the working requirements may still be entitled to claim a bonus when they eventually lodge their Age Pension claim (Services Australia, https://www.servicesaustralia.gov.au/pension-bonus-scheme). For some older Australians, and for their advisers and families, this represents a meaningful entitlement that has been sitting quietly unclaimed.

What did the Pension Bonus Scheme involve?

The PBS operated from July 1998 through to its closure for new registrations in 2014. To participate, a person had to register with Services Australia (then Centrelink) before reaching the scheme's cutoff, defer claiming the Age Pension beyond Age Pension age, and continue to work. The work requirement was met through a work test applied in each "bonus period" — a full 12-month period of deferral. The work test required at least 960 hours of qualifying paid work during each bonus period (an average of 20 hours per week, allowing for four weeks of annual leave), and at least 640 of those hours must have been worked in Australia (Services Australia, https://www.servicesaustralia.gov.au/work-test-for-pension-bonus-scheme). Self-employment counted, but volunteer work generally did not. At the end of each 12-month period, Services Australia issued an Evidentiary Certificate confirming the work test had been passed.

The bonus accrued for each completed bonus period, up to a maximum of 5 bonus periods (5 years). This cap applies regardless of how long a person continued working past Age Pension age — accrual stopped at five years (Services Australia; DVA CLIK 5.6 Pension Bonus Scheme, https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme).

The bonus is calculated by reference to the Age Pension rate at the time of eventual claim, the number of accrued bonus periods, and the person's partner status during the accrual period. At the maximum five-year accrual the bonus reached approximately $58,839.30 for a single person and approximately $44,468.60 each for members of a partnered couple (Age Pension Guide, https://agepensionguide.com.au/pension-bonus-scheme-work/, current as at 5 May 2026). The bonus is paid as a single lump sum at the time of the Age Pension claim, in addition to the regular pension entitlement, and is tax-free.

When did the Pension Bonus Scheme close for new registrations?

The article draft stated the scheme "closed on 20 September 2009." The confirmed position from the current Services Australia PBS page is that new registrations were accepted before 1 July 2014 — not 2009. The date 20 September 2009 is when broader pension reform took effect and the Work Bonus was introduced as an alternative mechanism, but the PBS itself continued accepting new registrations until 1 July 2014. This matters for identifying the relevant cohort: framing the eligible period as "registered 1998–2009" understates by five years. The correct period is 1 July 1998 through to before 1 July 2014.

Why was the Pension Bonus Scheme replaced?

The Work Bonus — the current mechanism — was introduced as part of the 2009 pension reforms and now operates in place of the PBS. The Work Bonus works differently: instead of a deferred lump sum, it provides an ongoing concession each fortnight, disregarding a portion of employment income from the Age Pension income test. Up to $300 per fortnight of employment income is disregarded, with unused bonus accumulating in a balance that can reach $11,800 (current as at 5 May 2026, Services Australia, https://www.servicesaustralia.gov.au/work-bonus). The Work Bonus is available to all Age Pension recipients who earn employment income — no registration required. The PBS and Work Bonus should not be confused; they are entirely separate mechanisms.

Who may still have unclaimed Pension Bonus Scheme entitlements?

The relevant group today is people who registered for the PBS at any point before 1 July 2014, deferred their Age Pension claim, and met the work test during some or all of their deferral years, but have not yet claimed or did not capture the bonus when they did claim. Given that registration could have occurred as recently as 2014, someone who registered at, say, 64 in 2013 would now be in their late 70s — not as elderly as an earlier analysis of the cohort might suggest. The simple question to ask older clients and family members is: "Did you ever register for the Pension Bonus Scheme, or do you remember being told about a scheme that would pay you a lump sum for deferring the Age Pension?"

What is the Pension Bonus Bereavement Payment?

If a PBS member died on or after 1 January 2008 without having claimed their pension bonus, the surviving partner may be eligible for a Pension Bonus Bereavement Payment (PBBP) — a tax-free lump sum paid in lieu of the bonus the deceased would have received (DVA CLIK 5.6.10, https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme/5610-death-member-scheme/pension-bonus-bereavement-payment; DSS Guide 3.4.11, https://guides.dss.gov.au/social-security-guide/3/4/11). To qualify the deceased must have been registered in the PBS, have not made a successful claim before death, and the surviving partner must meet residence and means-test requirements at the time of claim. The PBBP must generally be claimed within 26 weeks of the partner's death. This is a frequently-missed entitlement in estate administration — executors and surviving spouses of older Australians who deferred their Age Pension should specifically check whether PBS registration existed.

What does identifying a Pension Bonus Scheme entitlement look like in practice?

Consider a notional example: Frank, 79, has been on the Age Pension since he claimed at age 70. He had run a small consulting business until age 69 and "remembers something about deferring his pension to get a lump sum back then" but cannot recall the details. His financial adviser asks Services Australia to check his historical records and the records show that Frank did register for the PBS at age 64 in 2010, accrued five qualifying bonus periods between ages 64 and 69, but his eventual Age Pension claim at 70 did not include the bonus claim — likely an administrative oversight at the time. The bonus, calculated against the prevailing Age Pension rate when he claimed in 2017, would have been substantially below today's maximum but still material. Where claim oversights of this kind are identified, the practical next step is to discuss with Services Australia whether a late or supplementary claim is possible. This is general information only; specific eligibility and recovery options depend entirely on the individual's records and the current SA position on retrospective claims.

A second example covers the bereavement angle. Consider Margaret, 82, whose husband Tom passed away three months ago at 84. Tom had been on the Age Pension for 12 years. Margaret recalls that Tom registered for "some kind of bonus scheme" in his late sixties but does not know whether he ever claimed. The PBBP claim window of 26 weeks is running. The first practical step is for Margaret (or the executor) to contact SA to check Tom's PBS registration status and whether any unclaimed bonus existed at the time of his death. If yes, a PBBP claim may produce a meaningful tax-free lump sum to Margaret — which, given the closing 26-week window, is time-sensitive.

What are the practical steps to identify and claim a Pension Bonus Scheme entitlement?

If there is any possibility that an older person or their estate may have a PBS entitlement, the steps are: contact Services Australia to check historical records for PBS registration; confirm whether any bonus periods were accrued; and, where the Age Pension has not yet been claimed, lodge the Age Pension claim with the bonus claim included. For people who have been on the Age Pension for years and never considered PBS, a check of their records may reveal whether anything was missed at the time of original claim. Where a PBS registrant has died, the surviving partner has a 26-week PBBP claim window and should not delay. A financial adviser familiar with legacy Centrelink programs, or the Services Australia Financial Information Service, can assist in identifying and pursuing residual entitlements.

Sources

Key takeaways

  • The Pension Bonus Scheme (PBS) paid a tax-free lump sum to people who deferred claiming the Age Pension past Age Pension age and continued to work. It closed to new registrations on 1 July 2014 — not in 2009 as sometimes misreported. People who registered between 1998 and 2014 and met the work requirements may still hold unclaimed entitlements.
  • The PBS work test required at least 960 hours of qualifying paid work per bonus period (12-month year), with at least 640 of those hours worked in Australia. Bonus periods accrued for each qualifying year, up to a maximum of five periods. At maximum accrual, the bonus is approximately $58,839.30 for a single person and approximately $44,468.60 each for members of a partnered couple.
  • The Pension Bonus Bereavement Payment (PBBP) is available to the surviving partner of a PBS registrant who died on or after 1 January 2008 without claiming their bonus. It is a tax-free lump sum paid in lieu of the bonus the deceased would have received. The PBBP must generally be claimed within 26 weeks of the partner's death — a time-sensitive entitlement frequently missed in estate administration.
  • The PBS is entirely separate from the Work Bonus — the current mechanism that disregards up to $300 per fortnight of employment income from the Age Pension income test. The Work Bonus replaced the PBS for new claimants from 2009 onwards and requires no registration. The two should not be confused.
  • For clients or family members in their late 70s or 80s who deferred the Age Pension and worked into their late 60s, the simple question is whether they ever registered for the PBS. If yes, a check of Services Australia records may reveal whether any bonus was missed at the time of original claim, or whether a supplementary claim is possible.

Frequently asked questions

Is the Pension Bonus Scheme still open?

No. The PBS closed to new registrations on 1 July 2014. However, people who registered before that date and met the work requirements can still claim their bonus when they lodge an Age Pension claim. The scheme is closed for new entrants but not yet fully paid out — some registrants from the 1998–2014 period have not yet claimed or overlooked the bonus in their original Age Pension application.

How much is the Pension Bonus Scheme payment?

The bonus depends on the number of completed bonus periods and the Age Pension rate at the time of claim. At the maximum five-year accrual, the bonus is approximately $58,839.30 for a single person and approximately $44,468.60 each for members of a partnered couple, as at 5 May 2026. The bonus is paid as a tax-free lump sum at the time of the Age Pension claim and does not affect the regular pension entitlement.

What is the Pension Bonus Bereavement Payment?

The Pension Bonus Bereavement Payment (PBBP) is a tax-free lump sum available to the surviving partner of a PBS member who died on or after 1 January 2008 without claiming their bonus. It is paid in lieu of the bonus the deceased would have received. The PBBP must generally be claimed within 26 weeks of the partner's death, and the surviving partner must meet residence and means-test requirements at the time of claim.

How do I find out if someone registered for the Pension Bonus Scheme?

Contact Services Australia directly and ask them to check the person's historical records for PBS registration. For living applicants, ask them directly whether they remember signing up for a scheme that would pay a lump sum for deferring the Age Pension. For deceased partners, the executor or surviving partner should contact Services Australia and ask specifically about PBS registration status. The 26-week PBBP claim window begins from the date of death, so this check should be done promptly.

A note on advice. This article is general information only and doesn't account for your personal circumstances. Everyone's situation is different — before acting, it's worth talking it through with a licensed adviser who knows your full picture.