Trevor Evans (Brisbane, Liberal Party, Assistant Minister for Waste Reduction and Environmental Management) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Many industries across Australia are currently experiencing labour shortages due to the COVID-19 pandemic. Regional areas, as well, are suffering from staff shortages as a result of depressed labour mobility between regions and reduced migration.

The Social Services Legislation Amendment (Workforce Incentive) Bill 2022 will help to incentivise recipients of age pension, disability support pension and certain veterans' entitlements to undertake or increase paid employment.

Pensioners who choose to engage in some paid employment during their retirement typically have higher incomes and are able to support a higher standard of living than those who don't. They also gain significant non-financial benefits, including stronger social connection, staying mentally active and keeping physically fit.

Pensioners who choose to work during their retirement make a valuable contribution to Australia's economy and community. At present, around 80,000 age pensioners are supplementing their pension income with paid employment.

This bill encourages retired pensioners who would like to re-enter the workforce to do so, and provides further incentives for those who are already working to increase their hours.

Under current policy settings, age pensioners with employment income have their age pension cancelled if their total income exceeds the pension income test limit for more than 12 weeks. They also lose access to their Pensioner Concession Card (PCC) after 12 weeks.

These policy settings can act as a disincentive for age pensioners to work. Many age pensioners want to work but do not want to lose their pension status and have their PCC cancelled for earning too much. They also do not want to complete a full application to have their age pension and PCC reinstated.

This measure increases the flexibility of the pension for those people over age pension age who want to work by allowing age pensioners to move more easily between the age pension and periods of work.

From 1 April 2022, pensioners with employment income, whose total income exceeds the income limit, will have their age pension suspended for a period of up to two years, rather than cancelled after 12 weeks. If at any time during the two-year period their income is at a level that they can return to the age pension, they will benefit from an abridged reapplication process that only requires them to update their circumstances, including their income and asset information with Services Australia.

Pensioners will also be able to retain their PCC for longer. Currently, age pensioners who earn above the income limit keep their PCC for 12 weeks. Working disability support pensioners retain their card for 52 weeks. This measure increases and aligns the amount of time age pensioners and disability support pensioners are able to retain their concession card to two years. The PCC provides access to a range of Commonwealth health concessions, including cheaper prescriptions under the Pharmaceutical Benefits Scheme. Allowing working pensioners to keep their PCC for two years reflects the value pensioners place on their concession cards and recognises older Australians often have additional medical needs, even if they are able to work.

Importantly, when recipients of age pension, disability support pension and certain veterans' entitlements take up work and their partner is also a pensioner, they will both keep their PCC and both will be able to easily resume their pension payments within the two-year period.

This measure complements existing work incentives. For example, the income-free area lets a single age pension recipient have up to $180 per fortnight in employment or other income before their payment is affected. In addition, the work bonus allows age pension recipients to have an extra $300 per fortnight in employment income before their payment is affected. This means in total, a single age pensioner with no other income can earn up to $480 per fortnight from work before their payment begins to reduce.

The government values the contributions of all senior Australians and is committed to supporting pensioners to have a higher standard of living in retirement. It is also committed to addressing the current workforce shortages affecting many Australian businesses. This measure assists with both those goals. It provides greater flexibility in the age pension for those who wish to work and will help to provide additional labour supply for those industries who require it.

I commend this bill to the House.

Debate adjourned.