Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Senior Australians are on board to help meet the shortage of workers in the economy, but only if the federal government fixes the punitive income test that discourages them from participating in the workforce.
The Australian Chamber of Commerce and Industry, with backing from state and territory chambers of commerce, is calling for an increase to the threshold on the work bonus scheme so people can earn more before their pension is reduced.
Under the scheme, a pensioner can earn an average of $480 a fortnight – or $12,840 a year – before their payments are reduced, at an effective marginal tax rate of at least 50 per cent, ACCI says.
This is the equivalent of only one day a week at the minimum wage before their pension is reduced.
“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,” ACCI chief executive Andrew McKellar said in a statement on Wednesday.
“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.”
The ACCI says businesses of every size and industry across the country are experiencing the worst skill and labour shortages in more than two decades.
The new COVID-19 Omicron variant has delayed the reopening of the international border to skilled migrants, working holiday makers and international students.
Even when the borders do reopen, there will be fierce competition for skilled workers, the ACCI says.
Employment Minister Stuart Robert said the Morrison government is committed to providing strong incentives and support for older job seekers to remain engaged in the labour market.
‘Aged pensioners who choose to re-enter the workforce or increase their work hours will benefit from an easier return to the Age Pension if they exceed the income limit due to their employment, and will be able to keep their Pensioner Concession Card for two years,’ Mr Robert said in an address on Tuesday.
National Seniors Australia supports the call for an increase to the work bonus and the extension of the pensioner concession card, but chief advocate Ian Henschke said this doesn’t go far enough.
“National Seniors is calling for an exemption to the income test for pensioners with limited savings,” he said.
“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.”
He said this should be done as a two-year trial while there is a of lack workers from overseas to test its effectiveness.
The Australian Hotels Association welcomed additional support for pensioners wishing to work more hours without being financially penalised for doing so.
The association’s CEO Stephen Ferguson said with dire labour shortages being felt across Australia’s hotels and hospitality venues, any measures to assist mature Australians into work, if they wish to do so, should be embraced.
“Increasing the flexibility of the age pension system will help those who wish to move between work and the pension without facing unnecessary financial penalties,” Mr Ferguson said.