Part-time employment

Working part-time

People today are living longer than previous generations. Many are using part-time work as a way of easing into semi-retirement before they fully retire.

Here we discuss some of the benefits of part-time work, how you can use super to help you manage the transition, and the implications for your Age Pension if you are still working when you reach Age Pension age.

Benefits of part-time work

Retiring from the workforce is a major life change, especially if you have been working full-time, but it doesn't need to be an all or nothing scenario. More Australians are choosing to go into semi-retirement by switching to part-time work before they fully retire.

Some of the benefits include:

Smart tip

Working part-time allows you to keep topping up your super.

  • Super conservation - Because you are still earning an income you won't need to draw as much from your super, if at all, so it will continue to grow.
  • Structure and purpose - Working part-time, for many people, is a way of keeping their mind active. Work gives our lives structure and purpose and allows us to identify with and interact with others.
  • Development of other interests - People plan when they want to retire but many forget to plan what they will do in retirement. Holding off on permanently retiring gives you a chance to develop interests and hobbies outside of work.
  • Not having to wait until Age Pension age - If you are not yet eligible for the Age Pension, working part-time allows you to semi-retire but still have some income.

See when you can access the Age Pension and your super.

Super and pension age calculator

Women, in particular, often benefit financially from working longer part-time. Career breaks and lower incomes mean many women do not have enough super to sustain a comfortable retirement.

Tax incentives

If you are aged 55 or over you may be able to take advantage of a transition to retirement strategy. This strategy allows you to supplement your pay with a draw down from your super, if you need to, after you have reached preservation age. You pay no tax on your super income from age 60 and your employer will continue to top up your super.

See our case study on transition to retirement for more information.

Part-time work and the Age Pension

If you are still working when you reach Age Pension age your income may reduce the amount of Age Pension you are entitled to. Singles can earn $172 per fortnight before their Age Pension reduces. It will drop by 50 cents for every $1 you earn over $172. Couples who are both eligible for the Age Pension can earn $304 a fortnight (combined) without affecting their Age Pension. It will also drop by 50 cents for every dollar of income over this limit.

These income thresholds may be increased under Centrelink's work bonus scheme

Part-time work is a great way to supplement your Age Pension. Check your situation with Centrelink.

Working part-time gives you the 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: 27 Aug 2018