The Australian Retail Association (ARA) has joined the chorus calling for exemptions to the age pension income test to allow older Australians back into the workforce.

Whilst the unemployment rate has recently dropped to 3.9 per cent, labour shortages continue and the ARA have said pensioners hold the key to relieving retail staff shortages.

ARA CEO Paul Zahra said “making changes that exempt employment income from the Age Pension income test going forward would benefit everyone in our economy”.

“It provides pensioners with the opportunity to supplement their income if they wish, retailers with access to a willing and capable workforce to assist amid ever-present labour shortages, and the wider economy with a more empowered pension group that will be mobilised to spend by newfound employment opportunities,” Zahra said in a statement.

“Additionally, those on the aged pension are interested in returning to work from a sense of social duty and responsibility as well. They are a group critical to the fabric of our communities, and this generous sense of social duty should be freely welcomed, rather than significantly constrained by mechanisms such as the Aged Pension income test.”

Zahra said Australia hasn’t seen a labour market this difficult in over half a century.

“There are over 29,000 job vacancies in the retail industry. We are in the tightest labour market in more than 50 years and without the usual numbers of overseas workers and students, these gaps won’t be filled using traditional recruitment methods,” he said.

“Retail has always been a powerfully diverse employment sector and we need to think more creatively about how we can mobilise new segments of our Australian workforce such as mature age workers and pensioners.

“We would like to see this as a priority for the Federal government immediately following the election. Should the new government enact this considered change, a new workforce of pensioners can be unlocked and able to choose work that suits them in an economy that desperately needs their efforts.”

Australian radio presenter Neil Mitchell has supported the change to the pension income test and told his 3AW listeners that the government should “stop punishing seniors and retirees for working”.

“Let pensioners, part pensioners even, let them earn real money as casual workers in these desperate industries, and don’t cut their pension for doing that,” Mitchell said.

“There are nearly four million retirees in this country on part or full pensions. There are 2.6 million on the aged pension, that is 62 per cent of the population over the age of 65. It is a huge resource which we should exploit — a hidden army.”

The Federal Government recently announced the largest increase in social security payments in almost a decade in an effort to help recipients keep up with the rising cost of living.