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Boosted Work Bonus Unlocks Extra Income for Older Australians

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Boosted Work Bonus Unlocks Extra Income for Older Australians

 

Older Australians seeking to work without impacting their pension are greeted with positive news as the new year brings a significant enhancement to pension working rules. Effective January 1, the Work Bonus receives a substantial increase of $4,000, establishing a permanent annual limit of $11,800. This adjustment, resulting from ongoing pension working rule reforms, allows working pensioners to gain an additional $2,000, eliminating barriers for those eager to work in later life.

Understanding the mechanics of the enhanced Work Bonus is crucial. Thankfully, there’s no need for a separate application; individuals only need to declare their income, and the myGov/Centrelink portal provides convenient online access it.

Key Points of the Enhanced Work Bonus:

  • Under existing rules, the first $300 of fortnightly work income is pension income test-exempt, with the unused portion accumulating in a Work Bonus income bank.
  • The $4,000 permanent increase is added to the $7,800 annual limit, enhancing flexibility for individuals who work intensely in shorter periods. The extra $4,000 is applied at the start of the year.
  • As of January 1, 2024, the permanent increase allows individuals to earn $453 per fortnight without impacting their pension, potentially enabling them to take on extra shifts.
  • The Work Bonus operates alongside the pension income free area, enabling eligible pensioners to earn up to $657 per fortnight.
Boosted Work Bonus

Effective January 1, it receives a substantial increase of $4,000, establishing a permanent annual limit of $11,800.

Illustrative Examples:

Single Pensioners:

  1. John: An age pensioner working as a school crossing supervisor earning $400 a fortnight. Only $100 is counted under the pension income test, ensuring John receives the maximum Age Pension rate.
  2. Julie: An age pensioner working as an accountant for three fortnights, earning $6,000. With her Work Bonus income bank higher than her income, none of the $6,000 is assessed under the income test, allowing Julie to retain $6,700 for future earnings.

Couples:

  • Carol and Rob: A couple receiving the Age Pension. Carol’s work income of $700 and Rob’s self-employment income of $220 result in a combined assessed income of $400 a fortnight, leading to a $20 reduction in their combined pensions.

The enhanced Work Bonus provides a significant income-boosting opportunity for older Australians while maintaining pension eligibility.

For more information, individuals can contact Services Australia through Centrelink offices, phone (13 23 00), or online at Services Australia.

 

For more seniors news, click here.

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Business Closures Reach Four-Year High Amid Cost Pressures

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Business Closures Reach Four-Year High Amid Cost Pressures

 

By Ian Rogers

Business insolvencies in Australia have hit a four-year high, with rising costs and financial pressures forcing many companies to shut their doors. According to debt-monitoring firm CreditorWatch, the business failure rate rose to 5.04% in October 2024, nearing the peak of 5.08% seen during the height of the COVID-19 pandemic in October 2020.

On an annual basis, insolvency rates are now 25% higher than pre-pandemic levels.

Why Are Businesses Struggling?

CreditorWatch identified three main reasons for the increase in insolvencies:

  1. Higher Cost of Living: Consumers are tightening their spending, particularly on discretionary items, affecting business revenues.
  2. Higher Cost of Doing Business: Rising electricity prices, insurance premiums, rent, and wage increases have put pressure on operating costs, especially for smaller businesses.
  3. Tax Debt Recovery: The Australian Taxation Office (ATO) is actively pursuing $35 billion in unpaid tax debts, with many affected businesses in the hospitality and construction sectors.

Sectors Most Affected

  • Hospitality:
    • This sector had the highest failure rate, averaging 8.5% over the past year.
    • CreditorWatch predicts the rate will climb further to 9.1% in the next 12 months.
  • Construction:
    • The construction sector’s failure rate averaged 5.3%, though it appears to be stabilizing.
    • Long-standing cost pressures and reduced activity due to high interest rates have strained many businesses.

Both sectors also face the highest levels of tax debt and defaults, further limiting their financial viability.

Broader Financial Challenges

The report highlighted a rise in business-to-business payment defaults, indicating that more companies are struggling to pay their bills. Arrears have increased across most industries, reflecting the cumulative impact of rising costs and economic pressures.

Ivan Colhoun, CreditorWatch’s chief economist, remarked “Unfortunately, higher costs and interest rates are leading to more arrears and business failures. It’s an expected but unfortunate consequence of the current environment.”

Will Interest Rate Cuts Help?

The Reserve Bank of Australia (RBA) is unlikely to cut interest rates at its December meeting. Rates have remained steady at 4.35% since November 2023, with economists expecting the first cuts in the first half of 2025.

While inflation fell to 2.8% in the September quarter and unemployment held steady at 4.1% in October, the RBA has signalled it won’t reduce rates until inflation drops further or unemployment rises.

Mr. Colhoun noted that even if rates are cut, the effects will take time to materialize. However, lower inflation could provide some relief by reducing cost-of-living pressures and encouraging consumer spending, potentially boosting businesses in the medium term.

Future Uncertainties

While consumer and business confidence have shown modest improvement in recent months, challenges remain:

  • Global Risks: A potential shift in U.S. trade policy, including proposed tariff increases on major Australian trading partners, could create additional uncertainties for businesses.
  • Tax Debt Recovery Delays: The impact of delayed tax cuts and ongoing tax collection efforts could exacerbate financial strain for some businesses.

The Road Ahead

While some sectors show signs of resilience, the rising insolvency rates underscore the need for continued government and industry support. Businesses in hospitality and construction, in particular, will require targeted relief and reforms to navigate these challenging conditions.

The long-term outlook hinges on broader economic stability, interest rate adjustments, and efforts to reduce operational costs for struggling businesses.

 

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Business Confidence Surges as Inflation Declines, Hitting a Two-Year High

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Business Confidence Surges as Inflation Declines, Hitting a Two-Year High

 

By Robert Heyward

Roy Morgan Business Confidence rose sharply in October 2024, increasing by 12.4 points to 106.7. This marked the most positive sentiment in over two years, driven by falling inflation and growing optimism about the Australian economy and business investment.

Key Drivers of the Increase in Confidence

The October rise in Business Confidence coincided with significant declines in inflation:

  • Monthly inflation: Dropped to 2.1% in September, as announced in late October, down from 2.7% in August and 3.5% in July.
  • Quarterly inflation: Reached 2.8% for the September quarter, its lowest level since March 2021 and within the RBA’s target range of 2–3%.

This decline in inflation has improved economic sentiment and heightened expectations of future interest rate cuts, aligning Australia with trends seen in central banks overseas.

Roy Morgan Monthly Business Confidence Australia

Roy Morgan Monthly Business Confidence Australia

Improved Sentiment Across Key Indicators

  • Financial outlook:
    • 46.3% of businesses (up 5.2 percentage points) expect to be better off financially in a year.
    • Only 20.6% (down 4.4 points) anticipate being worse off.
  • Economic outlook:
    • 59% of businesses (up 6.8 points) expect “good times” economically over the next year, the highest level since February 2022.
    • Confidence about the economy over the next five years also rose, with 35.6% expecting “good times” (up 4.4 points).
  • Investment sentiment:
    • 42.9% (up 6.9 points) believe the next 12 months is a “good time to invest” in growing their business.
    • Only 35.2% (down 10.4 points) consider it a “bad time to invest,” the lowest level since June 2021.
Business Confidence by State in October 2023 vs October 2024

Business Confidence by State in October 2023 vs October 2024

State-by-State Analysis

Business Confidence improved across most states, with New South Wales leading at 111.6, followed by Queensland (105.7), Western Australia (105.2), Victoria (104.4), and South Australia (102.4).

Tasmania (89.0) was the only state with confidence below the neutral level of 100, reflecting political instability within its Liberal-led government.

Industry Performance

The most confident industries in September and October included:

  1. Public Administration & Defence: 160.1 (+48.9 points year-on-year).
  2. Education & Training: 127.3 (+6.7 points).
  3. Finance & Insurance: 121.6 (+20.7 points).
  4. Recreation & Personal: 112.0 (+16.9 points).
  5. Professional, Scientific & Technical Services: 111.0 (+11.9 points).

At the lower end, industries like Transport, Postal & Warehousing (72.6), Mining (78.3), and Agriculture (85.7) reported subdued confidence, with the Transport sector consistently lagging throughout the year.

Business Confidence for Top 5 and Bottom 5 Industries in September & October 2024

Business Confidence for Top 5 and Bottom 5 Industries in September & October 2024

Commentary from Roy Morgan CEO Michele Levine

“Roy Morgan Business Confidence surged in October, reaching its highest level since April 2022,” Ms. Levine said.

“This increase was driven by improved optimism about the economy and growing sentiment that the next 12 months is a good time to invest in business growth. The rapid decline in inflation, combined with expectations of potential interest rate cuts, has fostered greater positivity among businesses.”

Ms. Levine also noted strong performances across major states and industries but highlighted the need for targeted support in lagging sectors such as Transport, Postal & Warehousing, and Tasmania’s struggling economy.

Conclusion

Roy Morgan Business Confidence is now just 4.5 points below its long-term average of 111.2, signalling a steady recovery in sentiment as inflation declines and businesses prepare for a potentially favourable economic environment.

For more detailed insights, the Roy Morgan Business Confidence Report is available via subscription.

 

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NSW Businesses Poised to Shine at Global Expo in China

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NSW Businesses Poised to Shine at Global Expo in China

 

By Robert Hayward

The NSW Government is backing 29 businesses from the food, beverage, and health supplement sectors as they prepare to showcase their products at the China International Import Expo (CIIE) this week. The six-day trade show, China’s premier import-focused event, draws dignitaries and exhibitors from over 150 countries, offering NSW companies a direct connection to buyers, distributors, and potential customers throughout China.

As NSW’s largest two-way trading partner for nearly 20 years, China continues to be a top consumer of the state’s agricultural exports, valued at $3.6 billion for 2023/2024. NSW’s wine exports have also surged since the removal of import tariffs earlier this year, signalling continued growth opportunities, especially for the state’s premium food and beverage sector.

Last year’s CIIE saw NSW businesses secure $40 million in export deals, and the NSW Government is once again committed to facilitating new opportunities for expansion and success. Among this year’s exhibitors is Mrs Toddy’s Tonics from Sydney’s Northern Beaches, which will present its range of plant-based beverages, already stocked in Australian supermarkets.

Other participating businesses include Pablo & Rusty’s Coffee Roasters, Australian Vintage Wines, Balance Water, and Noumi. The CIIE will take place in Shanghai from 5–10 November 2024.

For more information about the event and the full list of NSW businesses that’ll be exhibiting visit here.

Minister for Industry and Trade Anoulack Chanthivong said:

“The China International Import Expo is a leading event on the global trade calendar and offers unparalleled opportunities for NSW exporters to connect with buyers and distributors in China.”

“We are excited to once again showcase the best from across NSW at this prestigious import-focused event, including meat from the Riverina, wine from the Hunter Valley, spirits from Wollongong, and health supplements made in Sydney.”

“China has a strong appetite for produce made in NSW, which is globally recognised for its high quality and safety standards, with demand only set to grow.”

Mrs Toddy’s Tonics Co-Founder Sophie Todd said:

“We’re thrilled at the opportunity to introduce a proudly Australian, female-led brand to China, and look forward to showcasing the Mrs Toddy’s Tonic range on the international stage.

“We know that Chinese consumers are becoming more health conscious and are turning to products with natural ingredients, so there’s enormous potential for a business like ours to establish a presence in this lucrative market.”

 

For more local news, click here.

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