Huge change set for Aussie incomes

Seniors and veterans could soon be able to work more, and subsequently earn thousands of dollars extra, before their pension payments are impacted.

In a bid to boost workforce participation and overcome chronic skills shortages, the Albanese government will on Wednesday introduce a new bill to permanently enable pensioners to earn $300 a fortnight before their pension payments are affected.

The change delivers on a policy commitment outlined in the government’s employment white paper released in September.

Under the proposal, any unused portion of $300 income credit will be kept in a Work Bonus income bank.

This income bank can then be used to offset future earnings that would be otherwise assessable under the pension income test.

The measure is expected to cost $42.4 million over the next four years, and if passed means that pension recipients, new and existing, will have a starting income credit of $4000.

The maximum Work Bonus income bank will remain at $11,800, which was outlined as a temporary measure at the Jobs and Skills Summit last September, up from the previous threshold of $7800.

Minister Rishworth said, if passed, the legislation would provide additional incentives for pensioners to re-enter the workforce by reducing barriers to participation.

“Many older Australians are choosing to supplement their Age Pension with paid work – and good on them,” Minister Rishworth said.

“We need to make sure that the system is incentivising older Australians to work if they want to. No one should be financially disadvantaged by staying in the workforce longer, or returning to the workforce after some time away.”

Prior to the Jobs and Skills Summit, the policy had been championed by seniors groups, veteran advocates and employer organisations.