Allowing retirees to joint the aged care workforce without pension penalty a win-win

The nation’s retirees should be able to return to work without losing pension and other retirements – and pay tax like everyone else – to help fix a critical workforce shortage in the aged care sector.

HammondCare CEO Mike Baird, a former NSW Premier, called for reforms to pension and superannuation rules to allow pensioners with limited wealth to go back to work in industries facing worker shortages, including aged care.

Mr Baird, who called for a change in a speech to the Aged and Community Care Providers Association (ACCPA) national conference, said it was time to make it easier for older people of pension age who want to work to do so.

“Given that the aged care sector is crying out for workers, while also facing an upcoming tsunami of demand, I believe it’s high time we make it easier for older workers to step back in from retirement,” Mr Baird said.

Reform to make it easier for retirees to work in the aged care sector was part of an “hourglass” solution for workplace shortages that aimed to get more younger workers, such as school leavers, into the sector as well.

“Even though one in five retirees would consider re-entering the workforce – a valuable group of people with a lifetime of skills and experience – there are several barriers for them to negotiate,” he said.

“Apart from ageism and sometimes a need to upskill, especially digitally, the bigger ones are the pension and superannuation rules.”

The nation’s retirees should be able to return to work without losing pension and other retirements – and pay tax like everyone else – to help fix a critical workforce shortage in the aged care sector.

Mr Baird said broadly speaking pensioners lose about 50 cents of their fortnightly pension for every dollar earned over the income threshold. Working too much over consecutive fortnights can lead to the pension quickly reducing, and reinstating the pension is never as quick.

Medication subsidies can be lost, and partner pensions may also be reduced or lost.

“One solution could be to exempt employment income completely for aged care workers (and other sectors that have a critical workforce shortage) from the aged pension income test,” he said.

“This would mean that pensioners with limited work can work without losing their pension, and without a reporting burden (although taxation would still apply on as normal).”

Mr Baird said the outcome would be a win-win with older workers supplementing their income while helping make the future of aged care “look a whole lot brighter”.

A recent report by the Commonwealth Committee for Economic Development, Duty of care: Meeting the aged care workforce challenge, estimated the aged care sector needed at least 17,000 more direct aged-care workers each year in the next decade just to meet basic standards of care.

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