Potential plan for seniors to return to work and keep their pension

The new proposal follows increased pressure from business and senior lobby groups on the Federal Government to allow more pensioners back into the workforce without losing their benefits.

So does that mean you can jump back into work if you are on the Pension? We explain it below.

What work restrictions are currently in place?

A single person on the Age Pension can earn a total of $180 a fortnight and a couple on the Age Pension can earn $336 a fortnight before their pension rate is impacted.

Anything over those thresholds will lead to your pension payments being reduced by 50 cents for each dollar.

As you may notice, $180 isn’t a lot, and you can easily earn this amount doing one day of work over a fortnight.

You can learn more about working while on the pension in our article, ‘How does paid work impact on the Pension?’

What might change?

The Federal Government created a proposal that would give pensioners aged 66 years and six months and over the option to partake in work and complete extra hours without losing money from their age pension.

The plan has received the endorsement of Opposition Leader Peter Dutton, with plans for the proposal to be discussed during the Jobs and Skills Summit in September.

Mr Dutton had previously stated that allowing seniors to work without financial penalty would “help relieve pressure on a very tight labour market” as well as “put downward pressure on inflation and interest rates”.

How will this help pensioners?

National Seniors, peak body for older people, has been actively advocating for pensioners to be allowed to work more hours without having their income support impacted in their campaign, Let Pensioners Work.

The organisation wants older pensioners to be able to undertake more work if they want to, which would give an additional financial boost or ‘top up’ for those on the Age Pension, as well as assist with critical workforce shortages across the country.

Chief Advocate for National Seniors, Ian Henschke, says the current Pension system is like having a “handbrake on that stops people from working”, and Australia needs to take it off to get the car moving as almost 20 percent of seniors are struggling to live off of the Pension alone.

He says National Seniors is backing the plan, confirming they are not forcing older people back into work, but that it was about choice.

“At the moment we have a system that discourages [pensioners] from working, and we need one that encourages working and rewards workers significantly,” Mr Henschke says.

“When there’s 500,000 job vacancies in Australia, and some of the most critical of those jobs are in aged care, you have to start looking at how you can use our resources.

“Older workers often have experience looking after their own family, so they’ve got lived experience and often make very good workers because they understand the needs of older Australians.”

A parliamentary inquiry examining the matter is expected to deliver its report next month.

Would you jump back into the workforce if you had the opportunity? Tell us in the comments below.