Providing an incentive for older Australians to return to the workforce could assist in combating the skills shortage the nation now faces, a major business group say.
The Australian Chamber of Commerce and Industry, with backing of state and territory chambers or commerce, is calling for the threshold on the work bonus scheme to be increased so people can earn more before their pension is reduced.
Under the scheme, a pensioner can earn an average of $480 a fortnight - or $12,840 a year - before their payments are reduced, at an effective marginal tax rate of at least 50 per cent, ACCI says.
This is the equivalent of only one day a week at the minimum wage before their pension is reduced.
"There is an army of older workers, ready and willing to return to the workplace. However, skilled aged pension recipients have very little incentive to re-enter the workplace," ACCI chief executive Andrew McKellar says said in a statement on Wednesday.
"In raising the Work Bonus threshold, pensioners would be allowed the opportunity to earn more, while businesses who are struggling to find staff would have access to workers, filling thousands of job vacancies."
ACCI says businesses of every size and industry across the country are experiencing the worst skill and labour shortages in more than two decades.
The new COVID-19 Omicron variant has delayed the reopening of the international border to skilled migrants, working holiday makers and international students.
Even when the borders do reopen, there will be fierce competition for skilled workers, the ACCI says.
Employment Minister Stuart Robert said the Morrison 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,' Mr Robert said in an address on Tuesday.
The Australian Hotels Association welcomed additional support for pensioners wishing to work more hours without being financially penalised for doing so.
The association's CEO Stephen Ferguson said with dire labour shortages being felt across Australia's hotels and hospitality venues, any measures to assist mature Australians into work, should they wish to do so, should be embraced.
"Increasing the flexibility of the age pension system will help those who wish to move between work and the pension without facing unnecessary financial penalties," Mr Ferguson said.
Australian Associated Press
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