Returning to work after you’ve retired and accessed your super

Retired and feeling the urge to work again? There’s a bunch of reasons why you might want to go back to work but there’s a lot to get your head around before you hit the jobs board.

Retirement is a time that many Australians eagerly look forward to. You finally get to kick back and relax after decades of hard work.

But sometimes things change. What if you find yourself wanting to go back to work after dipping into your super? You might feel the need to earn extra income because of cost-of-living pressures, or you may be craving the sense of fulfilment and social connection that work can bring.

Whatever the reason, it’s important to understand the rules and implications before you decide to dive back in the workforce.

Can I return to work after I’ve retired and accessed my super?

You generally have the flexibility to return to work but it depends on your circumstances and how you accessed your super. If you already accessed your super before turning 65 and previously declared that you never intend to work again, your access to super at the time was conditional on this declaration. It is illegal to access super with a false declaration of intention and this is why it’s important that, at the time of the declaration, you genuinely didn’t have the intention to return to work.

If you are planning to retire or you are already retired and experiencing a change in your circumstances, such as wanting to re-enter the workforce, it may be a good idea to speak to a financial adviser.

Also, before you jump on the jobs board, there are a few things to consider. These include:

• your age, 
• when you stopped working, 
• financial position, 
• whether you're on the Age Pension, 
• whether you've reached preservation age, and 
• any potential tax implications.

Keep in mind that going back to work may have tax implications and, if you receive the Age Pension, it could impact your pension payment amount (see below). Speak to your tax accountant and/or financial adviser for advice on your personal situation.

If you retired and accessed your super when aged under 60

Preservation age is simply the minimum age at which you can access your super. The preservation age in Australia is 60 years old, and you will be able to access to your super so long as you have either:

• permanently retired from the workforce
• ceased an employment arrangement on or after the age of 60
• are over age 60 and have started a Transition to Retirement strategy
• turned 65, regardless of whether you’re still working or not. 

If you retired and accessed your super when aged 60-64

Ceasing work before 60

If you leave a job before turning 60 and want to access your super between the ages of 60 and 64, you must genuinely intend to never return to any gainful employment.

This means your access to your super may have been conditional on your declaration that you intended to never return to work in future for 10 hours or more per week, 

Ceasing work after 60

If you are aged between 60 and 64, leave your job and want to access your super, you may do so without having to declare any intention about your future employment.  

So, if this is you and you didn’t declare  any intention about future employment to your super fund, you can generally return to work without restrictions. 

If you accessed your super past age 65

You can access your super after age 65 regardless of your work status and don’t need to make any declaration on your retirement status. So if you were over 65 when you accessed your super, this doesn’t stop you from going back to work. You can return to work full-time, part-time, or casually. You can also change jobs or start a new business if you wish. 

How many hours can I work on the Age Pension?

The Age Pension isn't affected by the number of hours you work. Rather, the amount of income you earn in a fortnight can have an impact on your Age Pension. This is why you must report your income to Centrelink regularly.

According to the Services Australia website (as of 1 July 2024):

• for single people, you can generally earn up to $212 per fortnight before your pension payment gets affected.
• for couples, your combined income gets affected when it exceeds $372.

Going over these limits may not necessarily mean your Age Pension gets cut off, however if you’re thinking of going back to work, it’s important to understand the impacts your income will have on your pension amount.

If you earn too much in a fortnight, Centrelink won’t pay your pension payment for that fortnight. For most pensioners, here are the cut-off points as of 20 September 2024, though it may be higher if you get the Work Bonus (see below).

For other situations and for the latest income rules, visit the Services Australia website.

Remember, any Age Pension and Work Bonus related information in this article is general information only and is also not exhaustive. While the information is current as at September 2024, the rules may change in future. Before making a decision about returning to work, it’s a good idea to check the latest rules and speak with your financial adviser.

What is the Work Bonus?

The Work Bonus is a concession designed to allow pensioners to keep more of their pension payment while working and earning income. It basically reduces the amount of your income that gets assessed using the income test by Centrelink.

You may qualify for the Work Bonus if you meet all of the below criteria:

• you’ve reached Age Pension age,
• you get the Age Pension, Carer Payment or Disability Support Pension,
• you aren’t getting the transitional rate of pension.

If you’re eligible, the Work Bonus will automatically kick in, so you don't need to apply for it separately. The Work Bonus applies to income from both employment and self-employment.

How does Work Bonus work?

Every fortnight, you get $300 of Work Bonus, which will offset your assessable income for those 2 weeks. Any unused Work Bonus is accrued, up to a maximum amount of $7,800, so it can be used to offset future income.

• If you earn $300 or less in one fortnight, your income won’t affect your pension payment for that fortnight.
• If you earn more than $300 in one fortnight, any accrued Work Bonus balance will be used. The remaining income amount will be assessed using the income test.

For example, let's say you’re a single person earning $300 per fortnight from a part-time job. Without the Work Bonus, every dollar would be assessed as income, and this could reduce your pension payment. But with the Work Bonus, it reduces your assessable income to $0, allowing you to keep all of your pension payment for that fortnight.

Do I still get paid super if I return to work after accessing my super?

For most people, yes, you’re generally still entitled to receive super payments from your employer if you return to work after dipping into your super. It doesn’t matter if you’re working full-time, part-time, or casually.

The same rules around Super Guarantee rates still apply: your employer must contribute at least 11.5% of your earnings (for 2024-25) into your super fund and they must pay the contributions at least once every 3 months. From 1 July 2026, the Government has proposed that super contributions must be paid at the same time as your regular pay (this measure is not yet law).

Pros and cons of working after retirement

Choosing to go back to work after retirement is a personal decision. Many retirees consider returning to work for various reasons. It's essential to carefully weigh up the benefits and drawbacks so you can make sure it aligns with your goals and priorities. Below is a list of some of the general pros and cons but remember to look at your own circumstances and consider speaking with an appropriately qualified professional such as a licensed financial adviser and a registered tax professional before making a decision.