Benefits ringfenced as pensioners, jobseekers start working

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Australians will be offered more incentives to keep working while they receive the Age Pension or income support as part of a federal jobs plan that warns of looming skills shortages that will sap economic growth.

Older Australians will gain a permanent increase in the “work bonus” that helps them earn income from jobs without cutting their Age Pension, lifting the benefit to $11,800 and scrapping an earlier plan to end a one-off boost in the rate at the end of this year.

Others on income support will be able to retain Commonwealth concession cards and other benefits for six months – double the previous period – when they take up a job, ensuring they do not lose help suddenly if they rejoin the workforce.

A program permitting pensioners to keep more of their payments while working has been made permanent. Credit: iStock

While the work bonus does not operate as a payment, it gives pensioners an incentive to work by allowing them to keep more of their pension when they earn money from a job. It operates in addition to the pension “income-free area” that is worth $204 a fortnight for single pensioners.

When the $300 fortnightly work bonus and the $204 fortnightly “income free area” are combined, the government says a single pensioner over Age Pension age with no other private income can earn up to $504 a fortnight and still receive the maximum pension rate.

The work bonus can be accrued through the year and has had a maximum value of $7800 a year, but the government added a $4000 bonus after its jobs summit last year to take the amount to $11,800 a year.

While this was due to end on December 31, the employment white paper commits to making that increase permanent. The permanent total of $11,800 is worth about $454 a fortnight, increasing the amount that a pensioner can earn without losing the full pension.

The help for people with concession cards is expected to benefit about 138,000 recipients each year and will cost taxpayers $42.8 million over the next four years.

It will apply to those on JobSeeker, Youth Allowance, Austudy, ABSTUDY, Parenting Payment, Age Pension, Disability Support Pension and Carer Payment.

Treasurer Jim Chalmers has outlined a series of jobs policies in recent days, ahead of the release of the employment white paper with Prime Minister Anthony Albanese in Adelaide on Monday.

In a warning about the need to expand the workforce and fix labour shortages, the paper says 500,000 people are unemployed and are available to work, 1.3 million people want to work but are not actively looking and 1 million would like to work more hours but are under-employed.

“The shifts underway in the global and domestic economy have been fundamentally reshaping
Australia’s labour market, and set up an important moment for reform,” the paper says.

Over the next decade, it says, more than 90 per cent of new jobs will require post-secondary qualifications.

As well, projections from Victoria University show that digital and technology jobs will grow by 21 per cent by 2033.

The paper also emphasises the need for reforms to increase productivity, a key factor in lifting salaries at a time when real wages have fallen due to high inflation.

“Rather than repeating previous waves of reforms, Australia’s productivity agenda needs to respond to current economic circumstances and identify modern strategies to advance enduring policy goals,” the paper says.

“This agenda focuses on driving higher productivity growth by promoting economic dynamism and resilience, investment in physical and human capital, delivering quality care more efficiently, and realising the opportunities of the net-zero transformation.“

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