Emma McBride (Dobell, Australian Labor Party, Assistant Minister for Mental Health and Suicide Prevention) Share this | Hansard source

I rise to speak in support of the Social Services and other Legislation Amendment (Workforce Incentive) Bill 2022, and I am so pleased to see so many members of the government in the chamber at this time, because it just shows how important this is to the government and to members like me, representing places on the Central Coast of New South Wales, and people representing electorates right across Australia.

Right now, many industries are struggling to find workers with the right skills to fill vacancies. It's something I hear day to day, including in the health and care sectors. We also have many older Australians who are highly skilled, capable, experienced and keen to work more hours or to rejoin the workforce. Unfortunately, they face many barriers and penalties to working or to working more hours. Deputy Speaker Buchholz, as you'd be aware, this was one of the key issues raised during the government's Jobs and Skills Summit. We're determined, as an incoming government, to listen—to listen widely—and to be inclusive in our decision-making. This was one of the key issues that was raised, and we heard that age pensioners are often overlooked for work.

There is ageism in the workforce, with only around three per cent of Australia's 2.5 million age pensioners currently earning income from employment. It's clear that if we want to address these skill shortages, including in regional parts of Australia, then this needs to change so that senior Australians who want to work or to work more can do so without the risk of losing their pension, can continue to contribute with their experience and their expertise in meaningful ways in many parts of the economy. By providing incentives and increasing opportunities for them to work more without penalty, we could see more older Australians take up work, which would both benefit them and benefit local economies and the businesses that employ them.

I want to speak now about the electorate I represent, Dobell, on the Central Coast of New South Wales. It's known as a very popular place for retirees to live. One in five people in the community that I represent is aged over 65, and nearly 22,000 are receiving the age pension. There are also carer payment and disability support pension recipients who are over age pension age. I have been having an ongoing conversation with Paula Martin, the regional director of the New South Wales business chamber on the Central Coast. She provided me with the latest Business NSW report. According to the latest NSW business conditions report, 95 per cent of Central Coast businesses are reporting labour shortages. That is across sectors, across industries, from manufacturing through to hospitality. Shortages are increasingly being reported in middle- to senior-management roles as the Central Coast competes with Greater Sydney and the neighbouring regions for skills.

She pointed out to me that the fastest-growing roles, borne out in the report, in demand across the Central Coast are professional, management, sales and marketing roles, with an increase of over 50 per cent demand year-on-year for these roles locally. What she pointed out to me was that these are roles which older Australians—senior Australians with experience, expertise, skills and knowledge—could take up. She gave me an example of someone who returned to the workforce recently and the contribution that they're making in a middle-management role: mentoring, coaching and genuinely contributing to build the capability of that workforce and that business.

The report also went on to identify, in the latest labour force data, that the Central Coast has at this point in time the lowest workforce participation rate of over 65-year-olds in Greater Sydney. The report says that there are 83,900 people in the greater Central Coast who are over 65 years of age, of which 6,700 are currently employed. What she emphasised to me, and what this report shows, is that, when this legislation is passed, of any region in Greater Sydney, the Central Coast can gain the greatest impact of any increase to productive working hours of mature-age Australians. That will be good for those individuals, good for our local economy and good for the greater economy overall.

The measures in this bill will strengthen existing incentives to pensioners who are over age pension age and who want to take up work or to increase the number of hours that they already work. In communities like mine there are so many people with the skills, experience and expertise who do want to work more but who currently have been held back by some of the penalties and disincentives that are in place. Through increasing the work bonus through the social security income test, with its income-free area and proportional withdrawal rate, combined with the work bonus, pensioners are better off financially if they earn additional income rather than relying solely on income support. A pensioner can earn an amount of income before their pension is reduced, which is known as the 'income-free' area. For each dollar of income over the income-free area the single pension is reduced by 50c. For a couple, each individual pension is reduced by 25c a fortnight for each dollar the couple earns over the income-free area. In addition, the work bonus allows pensioners over the age pension age to earn an extra $300 per fortnight from working before the income test is applied.

The combination of the income-free area and the work bonus means that a single age pensioner with no other income could earn up to $490 per fortnight from working before their payment is reduced. That's significant; it will make a significant difference for the individual and their household. Pensioners can build up any unused amount of the $300 a fortnight concession in a work bonus income bank. This amount can be used to exempt future earnings from the pension income test, which means that a pensioner could choose to do occasional seasonal work and still benefit from the work bonus.

At present, the maximum work bonus income bank balance a person can accrue is capped at $7,800. This bill has two key policies designed to encourage pensioners to work more if they want to. The first is an increase in the work bonus income bank. Age pensioners, disability support pensioners and carer payment recipients over the age pension age, as well as veteran entitlement recipients over qualifying age, will have $4,000 credited to their income bank. The maximum work bonus income bank will increase accordingly, taking the maximum balance from the current cap of $7,800 to $11,800. An eligible pensioner who is currently working and has already benefited from the full value of the work bonus concession, will have their income bank increase from zero to $4,000. Eligible pensioners who do not currently work and already have the current maximum income bank balance of $7,800 will also have their income bank topped up by $4,000. This makes good sense. It's good for the individual person of age pension age and it's good for our economy, and I'm really keen to see what it will mean for the local economy in communities like mine in regional Australia. Because the $4,000 increase will be added to each eligible pensioner's Work Bonus income bank upfront, every pensioner will be able to have an extra $4,000 of employment income disregarded from the income test from the start of this measure.

The second key policy area of this bill is making it easier for pensioners who work to resume the age pension. Age pensioners and equivalent Department of Veterans' Affairs payment recipients with employment income whose total income exceeds the income limit will have their payments suspended for a period of up to two years, rather than cancelled after 12 weeks, which is what currently occurs. This will make it much more straightforward for a person to be able to start work or to work more hours, and then, during the two-year period, if their income is at a level where they become payable again, an abridged process would assist their return to the age pension, to reduce that admin burden on them, which is currently a disincentive for people to participate more if they want to. Abridging and streamlining the reapplication process for age pension payments provides a genuine incentive to engage in paid work for age pensioners who do not want to regularly complete application forms following periods of paid employment.

I also want to go to another initiative of the government. From my personal experience as a pharmacist, running a department in a hospital and hearing from local people, many people say to me that, even if they are working, older Australians often have additional medical needs. One of my constituents, Phil, is the president of a local surf club, Toowoon Bay Surf Life Saving Club, that I'm a member of. Phil often tells me when I'm down on patrol that healthcare costs are the hidden cost of retirement. It's something that he has experienced personally and that many other older Australians experience. He contacted me about the pensioner concession card. What it does is provide access to a range of Commonwealth healthcare concessions, including cheaper prescriptions under the Pharmaceutical Benefits Scheme. Phil said to me that this will make such a significant difference to older Australians. It will give them peace of mind. With rising costs of living, when they're trying to work out their household budget, this is something that will give them peace of mind. They will know that health care, which is one of the biggest concerns and costs that older Australians have, will be more affordable.

If age pension and disability support pension recipients with employment income are suspended because their income is too high, they'll also be able to keep their pensioner concession card for up to two years. Currently, age pensioners lose access to their pension concession card after 12 weeks, and working disability support pension recipients, after 52 weeks. When a recipient of age pension, disability support pension or certain veterans entitlements is employed and has sufficient income for a pension to no longer be payable and when their partner is also a pensioner, they'll both keep their pensioner concession cards for two years. As I said, Phil contacted me about this. I know this is something that impacts so many older Australians, and it will give them peace of mind to know that their health care is affordable. In this situation, both will be able to easily resume their pension payments within the two-year period if their income reduces to the point where they are payable again.

The other thing I want to go to before I finish is the benefit of workforce participation on someone's mental health and wellbeing. We know that workforce participation improves a person's quality of life, and that's on top of any financial benefits or benefits to their super. For pensioners in paid work, getting more income and additional super can help deal with cost-of-living pressures. But it can also boost their mental health and wellbeing. Beyond Blue have said that around 10 to 15 per cent of older Australians experience depression or anxiety. It's significant that one in 10 older Australians might, in that period of retirement, feel depressed or anxious. We know that, in retirement, finding purpose and making meaningful connections are critical to our mental health and wellbeing, as they are across our life. This is a part of this measure that I think really needs to be spoken about because, for some people, this may mean taking up a part-time job or working a few more hours, and the benefit that that will have to their own mental health and wellbeing is significant. So another part of this is the benefits to someone's mental health and wellbeing, and, given the cumulative impacts of natural disasters and COVID, any measure that the government can take to help boost older people's mental health and wellbeing is one that must be supported.

I'll return now to a conversation I had with Paula Martin, regional manager of the New South Wales business chamber on the coast. Paula joined a jobs and skills summit that the member for Robertson and I co-hosted at the Central Coast Leagues Club ahead of the national Jobs and Skills Summit. Paula said, 'Businesses also stand to benefit from the skills and experience of older Australians, who have much to contribute to the workforce, especially in industries where there are significant shortages, including in teaching and health.'

Paula went on to say that mature-age Australians can help businesses with management skills, mentoring and training and that businesses will benefit from using the knowledge and experience of mature-age Australians to help them develop management experience and upskill their existing workforce to really build that capability of workforces. There is a current shortages of trainers. She goes on to say that we can better leverage the experience and support of this cohort and pass on that experience to others.

As well as this being a measure that will help older Australians return to the workforce or work more hours, if they want to, the benefits they'll get financially, including to their super, it will also boost people's mental health and wellbeing. As I said earlier, and as the government's spokesperson on mental health and wellbeing, we know the significant impacts on older Australians through the COVID pandemic, through isolation, through that loss of connection, and if this measure means that someone is more likely to be able to return to work or pick up more hours, it is something we all should support.

Our government values the contribution that older Australians have made and continue to make to our economy and to the social fabric of Australian society. They continue to contribute as workers, volunteers, advocates, carers, elders, grandparents, good friends and neighbours. On that point, I give a shout-out to my neighbour John, who waters my plants when I am here in Canberra. He is a good neighbour.

Through the measures in this bill, we will support those pensioners who still wish to participate in paid work to do so. I commend the bill to the House.

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