A Private Senator’s Bill introduced to the Senate today aims to help pensioners tackle rising cost of living and inflation pressures, while delivering desperately needed workers for businesses across Australia.
The Social Services Legislation Amendment (Enhancing Pensioner and Veteran Workforce Participation) Bill 2022, introduced by Senator Dean Smith, incentivises age and veteran pensioners to contribute to the Australian workforce.
It makes a return to work, or an increase in working hours, financially and administratively viable for pensioners.
Senator Smith emphasised that the Coalition believes pensioners wanting to work and employers unable to find staff represent a solution to each other’s problems at a critical economic time.
“Australian businesses and communities are battling severe labour shortages, especially in remote and regional areas, and incentivising pensioners to work can help relieve this,” Senator Smith said.
“Treasurer Chalmers and the Albanese Government want to leave discussion of policies like this until their Jobs Forum next month, but the crisis requires more urgent attention and the Coalition’s proactivity is evidence that we understand that.”
The Bill follows an announcement by Leader of the Opposition Hon. Peter Dutton MP in June and builds upon the previous Coalition Government’s unpassed Social Services Legislation Amendment (Workforce Incentive) Bill 2022, as well as Senator Smith’s earlier advocacy on this issue.
It doubles the Age and Veteran Pension Work Bonus Scheme, the amount that can be earnt while still receiving a maximum pension payment, from $300 to $600 per fortnight.
Unused Work Bonus Scheme income continues to be accrued up to a $7,800 cap, exempting future earnings for pension income test purposes.
“Increasing the amount that pensioners can earn so significantly has the potential to make a meaningful difference to their finances and the prospect of returning to work a worthwhile option,” Senator Smith said.
“Older Australians and veterans deserve the opportunity to work, or work more, to support themselves in a climate of rising inflation and cost of living.”
The Bill also removes deterrents to working in existing pension rules and provides pensioners with greater flexibility.
Instead of cancelling the pension of workers whose income exceeds the income test for 12 weeks, as is current practice, their pension will be suspended for up to two years instead.
Pensioners who become eligible again during that period will only need to complete a simplified re-application process, in contrast to present arrangements requiring a completely new application.
The Pensioner Concession Card, now subject to the same 12-week timeframe as the pension, will also be kept by working pensioners earning above the income test for two years.
Pensioner partners of working pensioners will enjoy the same pension resumption and Pension Concession Card arrangements.
“Pensioners who have been put off by the possibility of losing their pension or Pensioner Concession Card, or the onerous process of re-applying from scratch, can rest assured of greater flexibility,” Senator Smith said.
“Making the Pensioner Concession Card available for a two-year period reflects the importance of the concessions it provides to our working pensioners.”
The Bill contains an annual review mechanism, and its provisions are subject to a 12-month sunsetting clause, unless otherwise determined by the relevant Minister.
“The temporary nature of the policy means it can be changed to reflect improving economic circumstances,” Senator Smith said.
“The Budget cost is modest compared to the crippling effect labour shortages are having on Australian businesses.
“Initiatives increasing pensioner workforce participation are supported by advocacy and industry groups, including COTA and National Seniors Australia.
“This is a good policy for our pensioners, for our economy and for Australia.”