Pensioners may be the solution to job vacancies, but the pension penalty is too high
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If we received a dollar every time we heard someone say, ‘I can’t afford it unless I go back to work, then I will lose my pension,’ we’d probably be millionaires, if not billionaires. And we wouldn’t be surprised if you would be too. So when we stumbled upon this opinion piece written by Cherie Romaro we asked ourselves, why isn’t this front and centre news?
Day in and out we hear that Australia's unemployment is at an all-time low, yet we are facing one of the biggest labour shortages we’ve ever seen. Australian businesses are struggling to get employees on board so much so that they are offering people sign-up bonuses like an additional $50 just to show up to work, or $1,000 for starting a new job.
At the same time, there are millions of Australians on full or part pensions who are deliberately working just enough hours every fortnight, so when they submit their earnings to Centrelink they aren’t penalised, regardless of whether they could or want to do more work. It’s simply not worth the risk of losing the pension, because at the end of the day, that extra hour, shift, or day’s worth of work, isn’t enough to cover the pension that they lose as a result of doing the extra work. We’re sure many of you have faced this dilemma in the past and we’ve seen some discussions about it on the forum.
Pensioners may be the solution. Image source: Shutterstock.
We know pensioners can earn up to $300 a fortnight or $7,800 a year without impacting their entitlements. That’s $150 a week and we all know $150 isn’t getting anyone too far nowadays. In fact, you’re lucky if $150 is consistently covering your weekly grocery shop for a two-person household. Not to mention, if you earn more than that $300 a fortnight, you’re of course penalised, and receive a lower pension.
Australia is in desperate need of workers in sectors ranging from health, education, hospitality, agriculture, and many more, and instead of talking about bringing pensioners back into the workforce without any penalties, we are talking about bringing workers in from overseas. Now, we at the SDC want to make it known, that we have nothing against bringing overseas workers to Australia, what we do not understand, is why, if we have millions of Australians here, ready and willing to go to work, but can’t because they will get penalised, are we not just changing this penalty? New Zealand has been doing it for years!
And there are so many benefits to doing so. If you could rejoin the workforce without any penalties, or with at least a reduced penalty, you would pay tax on their earnings AND would likely spend more, which boosts the economy. Not to mention, you bring skills and experience that no one in the current workforce has. Your potential to mentor younger generations is quite literally priceless.
The benefits do not end here (of course, they don’t) Ms Romaro makes an extremely good point when she says that ‘there is proof that older people being socially interactive and working longer delays mental and physical decline, which dramatically affects costs of our aged care and health systems.’ So not only would pensioners being in the workforce boost the economy, it could reduce the stress on our aged and healthcare systems, which in turn boosts the economy even more.
We absolutely loved this statistic that Ms Romaro pulled from Deloitte Access Economics, so much so that we would like to conclude with it. ‘If we had an additional 5 per cent of Australians over the age of 55 back in the workforce, it would boost GDP by $48 billion.’
What do you think about pensioners having to deliberately work less to avoid financial penalties? Do you do this yourself? If the government changed the penalty or got rid of it, would you work more than you currently do? Some pensioners may not wish to rejoin the workforce but shouldn’t we leave that decision in their capable hands?
Day in and out we hear that Australia's unemployment is at an all-time low, yet we are facing one of the biggest labour shortages we’ve ever seen. Australian businesses are struggling to get employees on board so much so that they are offering people sign-up bonuses like an additional $50 just to show up to work, or $1,000 for starting a new job.
At the same time, there are millions of Australians on full or part pensions who are deliberately working just enough hours every fortnight, so when they submit their earnings to Centrelink they aren’t penalised, regardless of whether they could or want to do more work. It’s simply not worth the risk of losing the pension, because at the end of the day, that extra hour, shift, or day’s worth of work, isn’t enough to cover the pension that they lose as a result of doing the extra work. We’re sure many of you have faced this dilemma in the past and we’ve seen some discussions about it on the forum.
Pensioners may be the solution. Image source: Shutterstock.
Australia is in desperate need of workers in sectors ranging from health, education, hospitality, agriculture, and many more, and instead of talking about bringing pensioners back into the workforce without any penalties, we are talking about bringing workers in from overseas. Now, we at the SDC want to make it known, that we have nothing against bringing overseas workers to Australia, what we do not understand, is why, if we have millions of Australians here, ready and willing to go to work, but can’t because they will get penalised, are we not just changing this penalty? New Zealand has been doing it for years!
And there are so many benefits to doing so. If you could rejoin the workforce without any penalties, or with at least a reduced penalty, you would pay tax on their earnings AND would likely spend more, which boosts the economy. Not to mention, you bring skills and experience that no one in the current workforce has. Your potential to mentor younger generations is quite literally priceless.
The benefits do not end here (of course, they don’t) Ms Romaro makes an extremely good point when she says that ‘there is proof that older people being socially interactive and working longer delays mental and physical decline, which dramatically affects costs of our aged care and health systems.’ So not only would pensioners being in the workforce boost the economy, it could reduce the stress on our aged and healthcare systems, which in turn boosts the economy even more.
We absolutely loved this statistic that Ms Romaro pulled from Deloitte Access Economics, so much so that we would like to conclude with it. ‘If we had an additional 5 per cent of Australians over the age of 55 back in the workforce, it would boost GDP by $48 billion.’
What do you think about pensioners having to deliberately work less to avoid financial penalties? Do you do this yourself? If the government changed the penalty or got rid of it, would you work more than you currently do? Some pensioners may not wish to rejoin the workforce but shouldn’t we leave that decision in their capable hands?
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