Thanks but no thanks

In March 2021, as the COVID-19 pandemic was starting to change life as we knew it, 71-year-old pensioner and retired registered nurse, Sheila, visited her GP.

She saw hardworking staff run off their feet as they tried to cope with the increasing demand for vaccinations and other pressures.

She also saw the need for her to come out of retirement, put on her personal protective equipment and help her local clinic manage the influx of patients and the anxiety the virus brought with it.

Fast forward three years, Sheila’s now 74 and still working at the clinic.

While the demand for COVID-related medical treatment has decreased, the clinic is as busy as ever.

Patients continue to need triaging and treatment for a range of issues from wound dressings to flu vaccinations.

Sheila loves her work and the difference she makes to her patients, clinic, and community. Her expertise is needed and valued. But she works only 10 hours a week, over two days.

She could and would like to work more – up to 20 hours a week. But, under the current social security rules, she is financially penalised for doing so.

If Sheila works more than 10 hours a week, she loses 50 cents from her pension for every extra dollar earned, and she pays income tax. The pension bonus of one day is followed by the pension penalty the next.

Not only is it hardly worth it, it’s hard to take.

It’s disappointing for Sheila, who raised three children as a single mother, had very little opportunity to save money, and rents in public housing.

As an older worker with two adult children with special needs, the extra income makes a real difference to her life.

You could argue that working beyond the bonus is better than nothing, but is it fair?

National Seniors Australia helped win an increase to the work bonus by $4,000, boosting the amount you can earn from $7,800 to $11,800, but this is due to finish at the end of this year. It still allows workers to earn just $226 a week before their pension penalty kicks in.

Rather than showing appreciation for answering the call for more nurses during the pandemic – at a time when many people stayed at home to protect themselves – and for continuing to help fill current workforce shortages, our pension system says, “Thanks but no thanks.”

Treasurer Jim Chalmers’ latest Intergenerational Report estimates there will be fewer workers to underwrite essential services and a doubling of the number of care workers needed over the coming 40 years.

If this is the future, shouldn’t we encourage older people like Sheila to stay in or rejoin the workforce?

That’s why National Seniors is calling for a reduction in the pension income test taper rate from 50 cents to 32.5 cents in the dollar for employment income to address: a) workforce shortages and b) income poverty.

It should be trialled in the health, disability, childcare, and aged-care sectors so pensioners, like Sheila, can work more where demand is high.

Most people agree the system needs reform. It’s not logical or ethical in a society desperate for skilled workers – especially nurses – to offer them a bonus one day, only to penalise them every day after that.