On 10 February 2022, the Coalition introduced the Social Services Legislation Amendment (Workforce Incentive) Bill 2022 to incentivise recipients of the age pension, disability support pension and certain veterans' entitlements to undertake or increase paid employment.
Under this legislation, pensioners with employment income whose total income exceeded the income limit would 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 was at a level that they could return to the age pension, they would benefit from an abridged reapplication process that only required them to update their circumstances, including their income and asset information with Services Australia. The Coalition’s Bill also allowed for working age pensioners, disability support pensioners and certain veterans’ entitlement recipients, and their pensioner partners, to retain their pensioner concession card for up to two years after their payment ceases.
Following the recent federal election, the Coalition announced a Dutton government would support older Australians, who choose to work more by doubling the amount of income age pensioners and veteran service pensioners can earn without reducing pension payments. This would enable pensioners and relevant veterans’ entitlement recipients to earn up to $600 a fortnight through the Work Bonus and still receive the maximum amount of pension payment. This would benefit around 80,000 age pensioners and veterans who are choosing to work. Pensioners would continue to accrue unused pension work bonus amounts up to a maximum of $7,800 which can exempt future earnings from the pension income test. The increase would be reviewed annually.
The Bill, as currently drafted, enables eligible social security pensioners over age pension age, and certain veterans’ entitlement recipients over qualifying age, to benefit from a $4,000 increase to their work bonus concession balance, and a temporary increase to the maximum concession balance they can accrue, until 30 June 2023. While the Coalition welcomes this measure, it is only temporary. Pensioners should receive support beyond 30 June 2023.
Recommendation
The Coalition recommends the Government provide certainty to pensioners and amend the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022 to increase the work bonus from $300 to $600 a fortnight with a review every twelve months to ensure these sittings remain appropriate.