Zali Steggall (Warringah, Independent) Share this | Hansard source

Australia's support system and tax system should make it easier, not harder, for our older Australians to keep working. But, instead of rewarding their contribution, the Work Bonus now punishes them with sudden tax hits, pension losses and complex rules. At a time when we are relying on their skills and experience, the system is pushing them away. That's wrong, and it undermines the very workforce we need to strengthen. We need to tackle age discrimination in the workforce and have more incentives in place for older Australians to continue working where they can and if they want to.

I met recently with Mary and Joseph, two Warringah local residents. They're hardworking age pensioners who are living this reality. Mary teaches English at TAFE. She rents, owns no assets beyond an old car and cannot live on the pension alone. When extra classes are available, she's happy to take them, but every additional dollar above the income limit reduces her pension by 50c. Worse, if she crosses the income threshold of just $52,759, even by just a few hundred dollars, she's hit with a tax bill in the thousands and goes backwards. The stress of these unpredictable penalties make her hesitate to take on extra work when it's available.

This is not an isolated case. It reflects the broader systemic failures of this system. Other TAFE teachers have reported similar struggles—feeling forced to retire despite rising rents and living costs. We hear a lot in this place about the need for productivity and the fiscal impact of an ageing population. This means that we need a more flexible support and welfare system that works for our changing economy, ensuring older Australians can work without the fear of unpredictable tax bills. This should include the flexibility to manage rising rents, cost-of-living pressures and reduced retirement savings. We must act to keep our system fair by lifting and smoothing-out de facto thresholds; reviewing income-test taper rates; aligning pension, Work Bonus and tax settings; and ensuring that the ATO hardship provisions are flexible for low-income welfare recipients. A fairer system will deliver greater dignity, choice and help strengthen our economy.

I've written to the government and the minister about this issue that we have to be able to smooth out. It just makes no sense that, when we have shortages, the people who are willing and able to continue contributing by taking on those extra shifts go backwards because as soon as they go over that threshold, the tax bill they get hit with is in the thousands, which they simply can't meet because of the cost of living and everything else being tight. I urge the government; I hope the minister will respond and meet with me to discuss this very urgent issue.

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