2.1
There was general support for the Social Services Legislation Amendment (Workforce Incentive) Bill 2022 (the bill) by inquiry participants; however, some submitters raised broader issues and concerns regarding workforce participation and Australia’s social security system.
Support for the bill
2.2
The submissions to the inquiry were broadly supportive of the measures contained within the bill. For example, the Australian Council of Social Service (ACOSS) noted that the bill:
… will provide greater incentive for people receiving the age pension, disability support pension and veterans’ entitlement recipients to engage in paid employment. It is a progressive measure to allow pensioners who obtain employment to retain pension eligibility and pensioner concession card entitlements for two years.
2.3
In his submission to the inquiry, Mr Benjamin Cronshaw highlighted the benefits for individuals:
By being able to return to their pension if they lose their work, or it falls back under a certain threshold, they can have more stability and security in their lives. It also allows people to keep their pensioner card for two years, which removes another potential disincentive to work. These are a couple of simple measures, but they seem to be good ones.
2.4
Given this, Mr Cronshaw concluded that such measures are 'good in the economic recovery we are going through during the COVID‑19 pandemic'.
2.5
Also expressing support for the proposed reforms, Carers Australia stated the following to the committee:
We are pleased to see the extension from 12 weeks to two years before people on the age pension and some veterans’ pension and payment entitlements face cancellation of these, and lose qualification for their pensioner concession card in circumstances where the taper rate on their earnings reduces their pension income to zero.
2.6
Clubs Australia highlighted that workforce shortages have been an ongoing challenge for the club industry and have been exacerbated by the pandemic. It noted that these shortages have forced clubs to lower dining capacities, cancel functions, and reduce operating hours. Given this, it expressed its support for the bill as it considers that the reforms will 'enable age pensioners and certain veterans’ entitlements recipients to work in clubs without jeopardising their entitlements'.
2.7
Notwithstanding this general support for the measures contained within the bill, inquiry participants provided further reflections on workforce participation by carers and senior Australians, and the overall equity and adequacy of Australia’s social security system. These issues are discussed briefly below.
Carers and workforce participation
2.8
The peak non-government organisation for carers in New South Wales, Carers NSW, highlighted that a number of carers of Age Pension age continue to receive the Carer Payment, and argued that these individuals 'should be included in opportunities or incentives that aim to support people receiving pensions to participate in paid employment, supplementing their pension income, if they choose to'.
2.9
Carers NSW was unsure why Carer Payment recipients were not included within the bill’s measures aimed at supporting individuals into paid employment and, hence, argued that the reforms should be extended to include these individuals to ensure that they are not financially disadvantaged.
2.10
Carers NSW also submitted that the existing rule restricting Carer Payment recipients to participate in a maximum 25 hours of activity per week to undertake training, education, unpaid voluntary work, or paid employment, before their payments are impacted, may also act as a disincentive for older carers to participate in employment. Supporting this argument, it referenced a 2013 report published by the Australian Law Reform Commission which recommended that the Guide to Social Security Law be amended to indicate that the existing 25-hour rule be more flexibly applied.
Senior Australians and workforce participation
2.11
Although supportive of measures which suspend benefits and entitlements, instead of cancelling them and extending the qualification of the Pensioner Concession Card, the peak consumer body representing older Australians, National Seniors Australia contended that the changes will not provide an adequate incentive for older Australians to re-join the workforce.
2.12
While noting that the measures in the bill were a 'step in the right direction', the national peak body representing carers, Carers Australia, argued that they do not go far enough in removing barriers for pensioners to engage in employment. Specifically, the organisation noted that it did not understand why the Work Bonus, available to pensioners over 65, was not also available for those on the Carer Payment and people under the age of 65 on the Disability Support Pension.
2.13
Given this, Carers Australia suggested further policy consideration on other constraints to pensioners taking up employment to increase their income and maintain their workforce connection.
Equity and adequacy of social security
2.14
Although supportive of the bill, ACOSS also advocated for greater equity in the social security system and recommended that the Australian Government establish a social security commission to provide ongoing advice to the parliament on the adequacy of income support payments and other settings.
Committee view
2.15
The committee commends government reforms which promote employment and aim to assist the Australian economy as it recovers from the ongoing effects of the COVID‑19 pandemic and natural disasters.
2.16
The committee considers that the bill contains practical and progressive measures which will improve incentives for people receiving the Age Pension, Disability Support Pension, or various veterans’ entitlements to engage in paid employment. By allowing these individuals to return to the pension more easily in the future, the measures will reduce the disincentive to work for these people while also improving their financial stability and security, and engagement within their communities.
2.17
The committee also supports the extended qualification period for the pensioner concession card to allow for working pensioners to retain this vital support for up to two years.
2.18
The committee notes the concerns raised by peak carer bodies to the inquiry and considers that there is merit in exploring options to amend the social security law to remove disincentives for Carer Payment recipients of age pension age to engage in paid employment.
2.19
The committee recommends that the bill be passed.
Chair