New legislation aims to let age pensioners work more

New legislation is being introduced into parliament today to increase the number of hours age pensioners can work before their payment is cut.

The private member’s bill is being put forward by independent MP Rebekha Sharkie and is intended to address worker shortages in multiple industries, The Australian reports.

Older Australians could be the big winners. Under current rules, a single person on an Age Pension can earn up to $180 per fortnight, plus a further $300 under the Work Bonus scheme, for a total of $480.

Any money earned after that reduces their pension payments by 50 cents in the dollar. Ms Sharkie’s proposal seeks to increase this income test threshold.

Read: Lump sums and the Age Pension

As well as a being a boon to many Australians’ retirement savings, it’s hoped the change would help to fill the more than 480,000 vacancies across the country.

With skilled migration collapsing in the wake of the pandemic, Ms Sharkie says businesses are ‘crying out’ for more workers.

“In our seniors, we have an experienced workforce that, like many Australians, is facing cost-of-living pressures and wants the opportunity to earn a wage without being unfairly penalised,” she says.

“This is a single solution to two major issues that just makes sense.”

Read: What assets do I need to declare when applying for the Age Pension?

The proposal has the backing of major business groups, including the National Farmers Federation, Council of Small Business Organisations Australia, National Seniors Australia and mining magnate Gina Rinehart.

“In addition to income tax, their pension income is also taxable,” Ms Rinehart said in a statement.

“It means thousands of vulnerable working pensioners who have limited savings are being penalised at a tax rate that is higher than the wealthiest Australians in the top income tax bracket.”

Ian Henschke, chief advocate at National Seniors Australia, is also lobbying the federal government to have employment income exempted from the pension income test entirely, as occurs in New Zealand.

Read: Ageism keeping older Australians out of the workforce

“At the moment, it’s a giant disincentive not to work and it just doesn’t make economic sense … if you work more than one day a week and you lose 50 cents in the dollar,” he told Channel Nine.

He also said the fact that Australia punishes its senior citizens for working makes us wildly out of step with the rest of the developed world.

“We could look at the pensioners as a being a standing grey army ready to jump into action and fill those jobs,” he said.

“We’ve got American presidents in their 70s, we’ve got people like Sir David Attenborough in his 90s – still working.

“The Queen is still working and yet in Australia we say once you reach 66 and a half, we’re going to punish you if you decide to work more than one day a week.”

Are you pleased with the private members bill? Do you believe it will make a difference? If you’re an age pensioner, would you like to work more with penalty? Why not share your thoughts in the comments section below?

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Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. Great idea and long overdue. The big question is will the fat cats on big salaries with allowances that are more then the pension approve it? My experience is they’ll approve sanctions on pensioners for daring to try and make do and live a reasonable life, while giving themselves generous rewards.

  2. I am 67 & as yet not fully retired as I cannot afford to. I work 2 days a week & lose a lot of my pension. I would love to be able to still get the full pension, get my full pay & stay doing what I love. I work in aged care in the Dementia wing

  3. This is a no brainer. There is no need to INCREASE the amount a pensioner is allowed to earn before it affects their pension. All that is needed is to ABOLISH the restriction entirely, and allow a pensioner to earn as much as they like. Why? Because the tax department will handle this matter anyway. The more you earn, the more tax you will pay, and if you earn enough (a lot) you potentially could end up paying back your pension anyway. This is how NZ does it – they have no income test – they simply allow the income tax system to handle it. This also saves the government expense of administering the income test. Incidentally they don’t bother with an asset test either. Of course such a change might reduce the staffing costs of Centrelink!

    • The problem is that putting thousands of useless Centrelink people out of work will be a nightmare. Almost none of them could ever hope to get a real job outside Centrelink’s sheltered workshop.

      Sadly not one of the public servants I dealt with at Centrelink over the years would ever have got past the first five minutes in a job interview with me. As for Hank, well there is a special place for him in hell when his time comes.

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