These business networks say that age pensioners face significant barriers when re-entering the workforce, particularly with the current Work Bonus scheme.
A pensioner can earn an average of $480 a fortnight, or $12,840 a year, before their Age Pension payments are reduced at a marginal tax rate of at least 50 percent. For example, this is one day a week of work on the minimum wage before their pension is impacted.
If the Work Bonus scheme was more flexible, it would incentivise greater participation from pensioners, bring more workers into the job market, and also address the skills shortages in some sectors.
Chief Executive of the Australian Chamber of Commerce and Industry (ACCI), Andrew McKellar, says that Age Pension workers are an untapped market of skilled workers that are available to fill roles but are restricted by the current Age Pension regulations.
"There is an army of older workers, ready and willing to return to the workplace. However, skilled aged pension recipients have very little incentive to re-enter the workplace," explains Mr McKellar.
"In raising the Work Bonus threshold, pensioners would be allowed the opportunity to earn more, while businesses who are struggling to find staff would have access to workers, filling thousands of job vacancies.
"As the National, State and Territory Chambers of Commerce, our united demand reflects the fact that businesses right across the country are crying out for workers. This is a simple step the Federal Government must take to grow our workforce, boost our productivity and drive our economic recovery."
The ACCI alliance says that businesses of every size in every industry are experiencing the "worst skill and labour shortages in more than two decades" and without access to workers, businesses will not be able to compete in the global economy.
Additionally, the new COVID-19 Omicron variant has also delayed the international borders reopening to skilled migrants, working holidaymakers, and international students, which is where older skilled workers would be able to boost the labour force.
This call to action includes the ACCI, Business New South Wales, Chamber of Commerce Northern Territory, Chamber of Commerce and Industry Queensland, Business South Australia, Tasmanian Chamber of Commerce and Industry, Victorian Chamber of Commerce and Industry, and Chamber of Commerce and Industry Western Australia.
Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, announced on Tuesday that the Federal Government was removing some barriers to work for older Australians as part of its new principles-based approach to building Australia’s workforce.
"We must look at how we can remove barriers to employment participation, especially for women, our mature workforce and for disadvantaged groups, so that as we recover from COVID-19 we have a pipeline of skilled workers in a range of critical industries," says Minister Robert.
"To go some way in removing barriers and disincentives for older Australians who want to continue to pitch in. We are going to be making it easier for working pensioners to resume the Age Pension.
"This initiative will support age pensioners who choose to re-enter the workforce or increase their work hours by making it easier for them to return to the Age Pension if their payment is reduced to nil due to their income exceeding the income limit."
Peak body for older people, National Seniors Australia, has welcomed the ACCI's call to remove working barriers for older pensioners as well as the Government's recent announcement of increased support for mature workers.
National Seniors says that pensioners can help to meet the shortage of workers in Australia, however, this will only work if the Government fixes the income test that can discourage them from working.
While the organisation supports the ACCI’s call for an increase to the Work Bonus and Minister Robert’s extension of the Pensioner Concession Card for those who lose the pension due to work, they don't believe the actions go far enough.
Chief Advocate for National Seniors, Ian Henschke, says, "National Seniors is calling for an exemption to the income test for pensioners with limited savings.
"A targeted exemption will encourage the thousands of retirees who have little additional income to get back into the workforce to boost the economy and their own incomes.
"This should be done as a two-year trial while we lack workers from overseas to test how effective it is."
National Seniors believes that mature aged care workers are an untapped resource, which other countries are utilising but Australia isn't.
Of 4.3 million Australians over 65, only 14.2 percent are working compared to 24.8 percent in New Zealand, 25.48 percent in Japan, and 34.34 percent in Korea.
National Seniors points out that pensioners in New Zealand do not get penalised for earning additional income through work, and if Australia had the same uptake of mature workers, it would add 455,000 people to the workforce.