Working past Age Pension age: the tax, super, and Centrelink picture

Working past 67 — Australia's current Age Pension age — is increasingly common, and the financial framework around it is more favourable than most people realise. The Work Bonus, continuing superannuation contributions, the Senior Australians and Pensioners Tax Offset, and the flexibility of Age Pension claim timing all combine to support continued work for those who want to do it. Understanding the structure helps make the retirement decision deliberate rather than simply defaulting to a generic age.

How does the Work Bonus help Age Pensioners who continue working?

The Work Bonus is the key concession for Age Pensioners who continue working. Up to $300 per fortnight of employment income is excluded from the Age Pension income test, meaning an Age Pensioner earning $300 per fortnight or less from employment pays no income test penalty on those earnings — the Age Pension is unaffected. Unused Work Bonus accumulates in a balance up to a maximum of $11,800, which can offset higher-earning fortnights such as a lump sum bonus, overtime, or seasonal work. The accumulated balance does not expire at the end of the year; it carries forward and can be used when employment income spikes.

For a worker reducing to two or three days a week and earning around $400-600 per fortnight, the Work Bonus shelter of $300 per fortnight means only a modest amount of earnings is assessable under the income test, and the accumulated balance from quieter fortnights can offset that when it applies. The practical effect for many part-time workers is that their Age Pension remains largely intact.

What is the tax position for workers past Age Pension age?

For workers past 67, the tax position is often more favourable than during their peak earning years. The Senior Australians and Pensioners Tax Offset is available to Age Pension recipients and others meeting the criteria; in 2025-26 the SAPTO single threshold is $35,813, raising the effective tax-free threshold substantially above the standard low-income tax offset level. At modest part-time earnings, the combination of SAPTO and standard offsets means many workers past 67 pay little or no income tax on their employment income.

The tax on employment income that does arise is also offset by the ongoing tax-effectiveness of concessional super contributions. Salary sacrifice or personal deductible contributions reduce taxable income in the year of contribution, with the contribution taxed at only 15% in the fund instead of the marginal rate on employment income.

What super contributions can be made past Age Pension age?

Employer superannuation guarantee contributions continue for any employee receiving wages regardless of age. There is no age limit on the employer's SG obligation.

Voluntary concessional contributions — salary sacrifice and personal deductible contributions — are available to age 74 inclusive. For members aged 67 to 74, the work test applies: the member must have worked at least 40 hours within a period of no more than 30 consecutive days during the income year, or must qualify under the work test exemption (total super balance below $300,000 and work test met in the prior year). Workers who are genuinely continuing to work will almost always satisfy the work test. After 75, voluntary personal contributions are no longer permitted; employer SG continues.

For members with total super balances below $500,000, unused concessional contribution cap from prior years can be carried forward. Late-career workers continuing past 67 with some accumulated unused cap can make substantial concessional contributions in a single year if income and cash flow support it.

Non-concessional contributions are also available under 75, subject to the total super balance rules. For members under 75 who have come into an inheritance or received other one-off funds, a non-concessional contribution can move those funds into the tax-advantaged super environment.

How does phased reduction of work hours interact with the Age Pension?

Most workers continuing past 67 reduce their hours rather than maintaining full-time intensity. Moving from five days to three or four, transitioning to project or consulting work, or taking on a reduced role in the same organisation is the more common pattern than full-time continuation. The Work Bonus structure aligns well with this pattern. Modest part-time earnings in the Work Bonus shelter preserve Age Pension entitlement while providing supplementary income and the non-financial benefits of continued engagement — identity, structure, social connection — that matter to many older workers.

The phased reduction often extends over several years. A worker who moves to three days at 68, drops to occasional consulting at 71, and fully retires at 74 has had seven years of supplementary income, continuing super accumulation, and gradual rather than abrupt transition.

How should the decision to work past Age Pension age be approached?

Whether to continue working past 67 is a question about health, preference, capability, and financial position — not a question with a universal right answer. The financial framework is designed to support continuation for those who want it, not to compel full retirement at a fixed age. For workers whose health and capability permit continuation, and whose employer or clients support flexibility, modelling the financial position at different retirement dates — the Age Pension interaction, the super balance at different ages, the tax position — gives a clear picture of what the decision means financially. That modelling often shows that continued work, even at reduced hours, makes a meaningful difference to the retirement income position and to the sustainability of the balance over a long retirement.

The question worth asking is not "should I retire at 67?" but "what do I want my 67-to-75 period to look like, and what structure best supports it?"