Advocates demand changes to age pension system

Jan 08, 2022
Seniors advocates have called on the government to make changes to the age pension. Source: Getty Images.

A peak seniors group has called on the Australian government to make changes to the age pension system in order to prevent seniors who want to continue working from being financially penalised.

According to data reported by National Seniors, 4.3m Australians are aged 65 and over, however, an OECD report highlights only 14.2% (610,000) are in the workforce compared to 19.44 % in the USA, and 24.8% in New Zealand.

National Seniors Chief Advocate Ian Henschke has called on the government to fix the income test that discourages seniors from participating in the workforce.

“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. This should be done as a two-year trial while we lack workers from overseas to test how effective it is.”

Henschke told The Australian that the tax on additional income made it pointless for older Australians to continue work.

“If you earn more than $240 a week, you lose fifty cents in the dollar,” he said.

“That means a single pensioner can only earn $7800 a year before they start losing their pension.

“And if they earn more than $32,000, including the pension, then they pay tax as well.”

The call for an exemption on the income assets test for seniors follows an announcement from the Minister for Employment, Workforce, Skills, Small and Family Business Stuart Robert in December 2021 that the 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,” he said.

National Seniors welcomed the announcement from Robert but claimed it “doesn’t go far enough”.

 

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

 

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