Newstart Allowance - Tommy's Story
Tommy East is a 61 year old single man. He had worked as a foreman in an engineering company, supervising a team of 56 staff, until he was made redundant in 2003. As Tommy is aged over 60, when he had received Newstart Allowance for more than nine months he became eligible for a higher rate that includes Pharmaceutical Allowance.
Talking to Centrelink staff Tommy learnt that he could start working and still have the security of Newstart payments. Centrelink referred Tommy to the Job Network, which assisted him to look for a range of opportunities, not just in the engineering field. His Job Network member provided him with job search training and also sent him to a short training course in food handling, which helped him find a job in the catering industry.
At first, Tommy only worked one day a week but now he is working 20 hours per fortnight. He is learning a new trade in food preparation and cooking methods through his part-time work. He feels more confident because of the help he received from his Job Network member and believes that he will soon go on to full-time employment.
The graph below shows how working makes a real difference for Tommy, especially if he had Working Credits when he started his job. Under the income test Tommy can earn some income without any reduction in his Newstart Allowance. As Tommy’s income grows there will be some further reduction of his payment but overall he will be better off having a job. In fact, because he is single, over sixty years of age, and has been on payment for more than nine months, Tommy has a more generous income test before the payment cuts out altogether.
Having a job again has turned Tommy's life around. Instead of feeling that his future was gloomy, he now feels that he has a second chance in a rewarding career. He is meeting new people and learning new skills and has regained his self-confidence.
Please Note:The tax rates in these scenarios are estimates only. You may be entitled to tax offsets that can be claimed as an end of year tax refund.
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