Allowing pensioners to get back in the workforce could empower the cohort and solve the staff shortage crisis as 30,000 retail jobs remain vacant across Australia, the industry association says.
The Australian Retailers Association (ARA) is calling for the next government to make employment income exempt from the age pension income test so more pensioners can fill critical worker gaps.
Under current legislation, Australians receiving the pension can only work a minimal amount before their income is subject to heavy penalties: for every dollar earned over the $480 threshold, there is a 50-cent reduction to the fortnightly pension.
The pension income is also taxable.
As a result, only 2.9% of Australian pensioners (that’s 74,000 of the 2.6 million) receive income from employment, but more may feel emboldened to take up work if they knew their pension payments would not be garnished by their wages, ARA CEO Paul Zahra says.
“It provides pensioners with the opportunity to supplement their income if they wish, retailers with access to a willing and capable workforce to assist amid ever-present labour shortages, and the wider economy with a more empowered pension group that will be mobilised to spend by newfound employment opportunities.”
Zahra’s call has been echoed by National Seniors Australia (NSA) chief advocate Ian Henschke, who has long advocated for pensioners as a workforce shortage fix.
The NSA surveyed 4000 aged care pensioners and found one in five would consider re-entering paid work after retirement, while another 16% already have, mostly citing financial worries.
But, Zahra adds, many on the aged pension want to return to work out of a sense of social duty and responsibility. They’re a critical group that is so often overlooked by society, he says.
If the threshold was to change, Zahra says existing training programs would quickly skill up people returning to the workforce in retail. Indeed he says several of the country’s largest retail employers have already committed to upskilling staff.
The workforce could look completely different in a matter of months, Zahra says, particularly amid the trickle of overseas workers and students re-entering Australia in a post-pandemic world.
Unemployment has remained at 4% in March, and the Reserve Bank of Australia and Treasury are confident it will reduce 3.75% later this year — a 50-year low, according to Treasurer Josh Frydenberg when handing down March’s budget — but job vacancies in several industries are at an all-time high.
“We are in the tightest labour market in more than 50 years and without the usual numbers of overseas workers and students, these gaps won’t be filled using traditional recruitment methods,” he said.
“Retail has always been a powerfully diverse employment sector and we need to think more creatively about how we can mobilise new segments of our Australian workforce such as mature age workers and pensioners.”
Zahra says the next government formed after Saturday’s election should see the older cohort as a generation waiting to be unlocked in an economy that desperately needs them.
“We can’t have an economic recovery without a retail recovery and skills shortages along with supply chain challenges are enormous constraints on this segment of our economy,” he said.
“To this point, no broad solutions have been suggested, leaving a significant gap in productivity and growth for an already stressed workforce.”
Emma Elsworthy is Climate Editor at The Mandarin.
