Part-time employment

Working part-time

People today are generally healthier, more active and living longer than previous generations. Many are able and willing to mix semi-retirement and part-time work. According to a report by the National Centre for Economic and Social Modelling at the University of Canberra, 2 in 10 Australian men aged 60 to 64 and almost 6 in 10 women are transitioning to retirement by working part-time.

In this section, we look at some of the benefits of part-time work, the government incentives to encourage you to do so, and the implications for your age pension.

Benefits of part-time work

Smart tip

Working part-time allows you to top up your super.

Full-time work may feel too much, but that doesn't mean you have to give it up completely. A 2009 Australian Bureau of Statistics report found that 1.1 million people who work full-time intend to switch to part-time work before retiring. At present, the average retirement age is 57.5 years but this is expected to rise rapidly. Use our calculator to work out when you will be entitled to the Age Pension and superannuation.

Super and pension age calculator

The main reason why people work past 55 is because they need the money. Working longer has two benefits. You draw less on your super in the early years of retirement. You also have the chance to top up your savings.

Women, in particular, could benefit from continuing to work past 55. Due to career breaks and lower incomes, many women do not have enough super money to sustain a comfortable retirement.

For many people, working part-time is a way of keeping our minds active. Work also gives our lives structure and purpose and allows us to identify with and interact with others.

Government incentives

The Australian Government has a number of incentives in place to encourage people to continue working past the retirement age.

The mature age tax offset encourages older Australians to keep working. It entitles you to an extra $500 each year if you are over age 55. See the Australian Taxation Office's mature age worker tax offset overview for more information.

Another policy which encourages older people to keep working is transition to retirement. This allows you to draw down an income from your super when you reach preservation age, even if you continue to work. You pay no tax on your super income after age 60 and can continue to top up your super from your work income.

How part-time work affects your age pension

If you are single and your income from all sources is more than $160 per fortnight, your age pension will drop. It will go down by 50 cents for every $1 you earn over $160. For a couple who are both on the age pension, the limit is $284. It goes down by 50 cents for every dollar of income over this limit.

Part-time work may fit in well with the age pension. Check your situation with Centrelink.

Working part-time gives you an opportunity to boost the amount of money you have when you do decide to retire. There are government incentives in place to encourage you to work, but keep in mind the income you earn can affect your age pension.

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Last updated: 14 Jan 2015

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