Retirement is a time when many people look forward to enjoying the fruits of their labor with a steady pension income. But depending on the size of the pension income, it can be difficult to understand how much a pensioner can earn before it affects the pension in the following year. This article will discuss the details of pensioner earnings in 2021 and the impact on pension 2022.
Pensioner Earnings in 2021
Under the current rules, pensioners can earn up to $18,200 without their pension being affected. This amount is called the ‘deeming limit’ and is subject to change annually. Pensioners who earn more than the deeming limit will see their pension decreased on a dollar-for-dollar basis. For example, if a pensioner earns $19,000 in 2021, their pension will be reduced by $800 in 2022.
In addition to the deeming limit, pensioners can also receive certain types of income without it affecting their pension. These include certain types of government payments, such as the Age Pension, and payments from superannuation funds.
Impact on Pension 2022
The amount of income a pensioner can earn in 2021 will directly impact the pension they receive in 2022. If a pensioner earns more than the deeming limit, their pension will be reduced on a dollar-for-dollar basis. This means that the more a pensioner earns in 2021, the less their pension will be in 2022.
Furthermore, pensioners should also be aware that any income they receive from superannuation funds in 2021 will be taxed at the same rate as their pension in 2022. This means that a pensioner should be careful when withdrawing money from their superannuation funds, as it could reduce their pension in the following year.
Understanding how much a pensioner can earn before it affects their pension in 2022 is important for those looking to enjoy their retirement years. By being aware of the deeming limit and other types of income that will not affect the pension, pensioners can ensure that they receive the maximum amount of pension in 2022.