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Let pensioners work!

Allowing pensioners to work will help them keep up with the cost of living and help with crippling labour force shortages – help us make it happen.

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Sign our petition

Our petition calls on the Federal Government to exempt employment income from the Age Pension income test, so pensioners with limited wealth can work without losing their pension and help meet critical labour force shortages. Complete the petition below.

By signing this petition, you consent to receive communications from National Seniors Australia. 

The issue

The Age Pension income test punishes older Australians who need work.

What we are calling for

We recommend employment income be exempt from the income test for pensioners with limited savings or assets.

The benefits

Increases income and savings of pensioners, social and emotional benefits from workforce engagement and no regular reporting of employment income.

The issue

Key Points

  • Only 14.2% of Australians 65 and over are in the workforce compared to 24.7% in New Zealand.
  • The Age Pension income test punishes older Australians who need work.
  • Government should exempt employment income from the income test for pensioners with limited means
Let pensioners work: The case for change

According to the Department of Social Services, only 2.9% of pensioners (74,000 of the 2.6 million) receive income from employment. With key sectors, such as home care, hospitality, agriculture and tourism, struggling to attract and retain qualified staff, we need to tap Australia's large resource of mature workers.

However, for every $1 work income over $480 per fortnight ($12,480 pa), a pensioner loses 50c of their fortnightly pension. With pension income also taxable, many question why they should bother working.

This situation is acute among pensioners with limited savings. They can only work one day per week without penalty. In contrast, pensioners with adequate savings (whose pension is determined by the assets test) can work more without affecting their pension. 

The present income test penalises those with the most to gain from ongoing workforce participation.

In New Zealand, pensioners are not penalised for earning additional income.

If Australia had a participation rate of over 65s similar to New Zealand’s 24.8%, it would result in an additional 450,000 available workers.

What are we calling for?

Case study

Heather is 68. She works casually as a registered nurse with home care provider My Care Solution. She'd be happy to work additional hours. Her employer would welcome her increased availability. Heather wants to work more hours to boost her income. But she finds the 50c in the dollar punitive and the Centrelink reporting burdensome.

Heather would be willing to increase her availability if she knew she wasn't going to be penalised. This would also help her grow her relatively low superannuation balance.

We recommend employment income be exempt from the income test for pensioners with limited savings or assets.

Exempting employment income for these pensioners with limited savings would allow them to work. 

This would help Australia meet worker shortages and retain skilled and qualified staff while there is uncertainty about immigration.

The exemption could be applied economy-wide or, alternatively, it could be targeted at specific sectors e.g. health and aged care, tourism, agriculture and hospitality, and geographic areas e.g. regional Australia where demand is high and labour supply is low.

Fairness in Retirement

Sign up to our Fairness in Retirement campaign to let pensioners work

If you have not done so already, you can show your support for thousands of older Australians who want to work and boost their retirement income by joining our campaign and signing our petition below.

The benefits

For pensioners:

  • increases both income and savings of low-wealth pensioners, particularly women
  • provides social and emotional benefits from ongoing workforce engagement
  • removes any need for regular reporting of employment income via Centrelink.

For the economy:

  • by encouraging ongoing workforce participation this will addresses workforce shortages
  • additional worker availability will reduce inflationary pressures
  • pensioners earning additional income would pay additional income tax, offsetting additional pension costs. 

A single pensioner who earns $75,000 in addition to their $25,000 pension would have a taxable income of $100,000 and pay $25,000 in tax. They would have paid for their pension by working and would have $7,500 in additional superannuation to fund their retirement!

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As a not-for-profit organisation, your membership directly funds our Advocacy and Research work. It helps us fight to fix pension poverty, tackle the cost of living and health care, improve aged care and fairness in retirement income.

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Donate to our advocacy campaigns

Your gift today can help fix pension poverty, rebuild the retirement income system and provide more home care places so that older Australians can live safely and make ends meet.

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