A seniors advocacy group is calling for changes to age pension rules that would allow older Australians to continue working without being subject to financial penalties.

Under current legislation, Australians receiving the age pension are only able to work a certain amount before their payments are reduced.

National Seniors Australia Chief Advocate Ian Henschke told Today the proposed changes are “a sensible policy that will fix the budget, that will help Australia get out of its labour shortage at the moment.”

“When (seniors) work they pay income tax, super contributions tax, etc,” he said.

“Now we have all of the problems with labour shortages, and the solution from government is to bring in hundreds of thousands of people from overseas who can’t come here in many cases because their countries won’t let them go,” he said.

Australian radio presenter Neil Mitchell weighed in on the issue, telling his 3AW listeners “the federal government must stop punishing pensioners 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,” he 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.

Those receiving the Age Pension, Disability Support Pension and Carer Payment will now get an extra $20.10 a fortnight for singles to $987.60 and by $30.20 a fortnight for couples combined to $1,488.80.

Asset test limits have also been increased which will allow more senior Australians to access a part pension.

Minister for Families and Social Services Anne Ruston said the increase was “the largest increase since 2013.”

“Pensioners will see a 2.1 per cent increase to their payments,” she said.

“This is putting money in the pockets of all Australians who rely on our social security system and, in particular, older Australians,” she said.

Senator Ruston said the increases had taken into account “the actual expenses of senior Australians.”

“It gives us a higher weighting to fuel and transport costs in recognition of their significance to pensioners, which helps ensure the rate of the age pension maintains senior Australians’ purchasing power in the economy,” she said.

The age pension is the most common form of income support available to those aged 65 and over. According to the latest data from the Australian Institute of Health and Welfare, as of March 26 2021, approximately 2.6 million people received the age pension or 62 per cent of the population aged 65 and over.