Part-Time Business in Retirement: Can You Run a Side Hustle on the Pension?
For many Australians, reaching retirement doesn’t mean giving up on work completely. Some people want to stay active, while others look for ways to supplement their income. A common question is: “Can I run a small business and still receive the Age Pension?”
The answer is yes — but you need to understand the rules around Age Pension eligibility, the income test, and how the Work Bonus applies. If you’re considering a side hustle, it’s also important to know how to apply for Age Pension, when to apply for Age Pension, and what Age Pension requirements and documents are needed when you lodge your claim.
Age Pension Eligibility and Small Business Income
When Centrelink assesses your Age Pension eligibility, it looks at both your assets and your income. If you decide to start a part-time business in retirement, Centrelink will include your net profit (after expenses) under the income test.
👉 Example: If your business earns $12,000 in sales but you spend $4,000 on supplies, only $8,000 is counted as income.
This means that having a side hustle won’t automatically stop you from qualifying, but your earnings could affect the amount of Age Pension you receive.
The Work Bonus and How It Helps
One of the most useful Age Pension supports is the Work Bonus. It reduces the amount of employment or self-employment income that Centrelink includes in the income test.
The first $300 per fortnight of income from work is not assessed.
Any unused amounts build up in your Work Bonus “income bank,” up to $11,800.
This allows retirees to earn more from a side hustle without losing as much of their Age Pension.
This is especially helpful for those running seasonal or part-time businesses.
When to Apply for Age Pension if You Have a Side Hustle
If you’re approaching pension age, you can lodge your claim up to 13 weeks before becoming eligible. When deciding when to apply for Age Pension, make sure you’re prepared to declare your expected business income as part of your application.
Being upfront about your side hustle ensures there are no delays in assessing your claim and avoids overpayments that might need to be repaid later.
Age Pension Requirements and Documents Needed
To meet the Age Pension requirements, you must provide details about:
Your age (currently 67 or older).
Residency (generally at least 10 years living in Australia).
Income and assets, including any small business income.
When applying, the Age Pension documents needed may include:
Identification documents (driver’s licence, passport, or birth certificate).
Bank account details.
Evidence of your business income and expenses, such as invoices, tax returns, or activity statements.
Having these documents ready makes the process smoother and faster.
Final Word
Running a part-time business in retirement is not only possible but can be rewarding. With careful planning, you can meet all the Age Pension requirements, report your income correctly, and use the Work Bonus to your advantage.
If you’re unsure about how to apply for Age Pension, when to apply for Age Pension, or which Age Pension documents are needed, seeking advice early can help you protect your entitlements while still enjoying the benefits of your side hustle.