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Meaning of gainful work income


Gainful work is work for financial gain or reward (other than as an employee), where the work involves personal exertion (also termed active participation) on the part of the person concerned. The work may be carried on within or outside Australia.

The Work Bonus will not apply to any income associated with a return on financial investments or real estate investments, or for work of a domestic nature in the person’s own home.

Examples of gainful work may include:

·         owning and working in a plumbing business,

·         a sub-contractor in the construction industry,

·         providing bookkeeping services, or

·         owning and running a farm.


Example of income that may or may not be from gainful work:

A person receives a $10,000 distribution from a trust.  The Work Bonus will only apply to that amount to the extent that the person could show that they had performed work commensurate to the amount paid.

A person’s gainful work income’ for a pension period is the amount worked out using the following formula:

                                              annual amount /26

Annual amount  (defined in subsection 46AA(4BB) ) means the annual amount of ordinary income of the person that is earned, derived or received by the person from gainful work (within the meaning of section 46ABA) undertaken by the person, being the annual amount as last determined by the Commission.


This formula takes into consideration that a person who is not in an employer / employee relationship, and is earning, deriving or receiving income from gainful work, may earn an ordinary income that varies throughout the pension period.