National Seniors Australia has welcomed the announcement of a $4,000 income credit by the federal government at the end of the Jobs and Skills Summit. It is an important first step in addressing jobs and skills shortages in the workforce.

The $4,000 income credit is on top of the existing $7,800 Work Bonus.

It is a short-term measure available for Age and Service Pensions from December 2022 until 30 June 2023 (Disability Support Pension recipients are also included). Once legislated, pensioners can earn an additional $4,000 before their pension reduces.

National Seniors is encouraged the Summit seriously considered our campaign to let pensioners work and address the jobs and skills shortage.

We hope pensioners will respond to this move and return to work, should they choose to, and in turn ease labour shortages.

While we welcome the move, we will continue to campaign to simplify our complicated pension system to encourage older Australians to participate in the workforce.

We hear from our members every day that the biggest disincentives for aged pensioners and veterans to re-enter the workforce is the onerous reporting of any income earned to Centrelink. Or the fear of losing their pension if they get it wrong.

Unfortunately, the new ‘income credit’ doesn’t change this. It still puts the onus on aged pensioners to report their income to Centrelink, which is a major disincentive for pensioners to work. Many pensioners find the current system punitive and demeaning, especially those with limited wealth from which to draw an income in retirement.

As such, we will continue to work with the government, opposition and cross-bench parties and MPs to make the pension system simpler and fairer.

The New Zealand system, where pensioners can work as much as they want without losing their pension, remains the benchmark.

It speaks volumes that in New Zealand, 25 per cent of people aged 65 and over are still engaged in work, while in Australia, it is just 15 per cent.

We urge the government to use the workforce crisis as an opportunity to test how best to reform the pension system to benefit the whole economy.

Allowing pensioners with limited wealth to work more, and augment their pension, is a step in the right direction. National Seniors is working with Deloitte on modelling to show the costs and benefits of pension reform. This will be presented to the government for consideration.

For further reading, visit our campaign page Let Pensioners Work.