Michael Sukkar (Deakin, Liberal Party, Shadow Minister for Social Services) Share this | Link to this | Hansard source

I thank the House for the opportunity to speak on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill, and I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes the severe workforce shortages across the country, record levels of job vacancies and almost a third of employing businesses having difficulty finding suitable staff;

(2) notes hiring and retaining employees remains a key challenge for small businesses; and

(3) calls on the Government to provide certainty by:

  (a) increasing the work bonus from $300 to $600 a fortnight to incentivise eligible pensioners to work more hours without penalty from 1 July 2023; and

  (b) reviewing this increase every twelve months to ensure these settings remain appropriate".

By way of background, I want to congratulate the government for adopting measures that were first introduced to this House by the former coalition government, which, on 10 February, introduced the Social Services and Other Legislation Amendment (Workforce Incentive) Bill to incentivise recipients of the age pension, the disability support pension and certain veteran entitlements to undertake paid employment or to increase their paid employment.

Under the coalition's legislation, pensioners whose employment income as total income exceeded the income limit would have their age pension suspended for a period of up to two years, rather than what was the case at the time, which is that it was cancelled after 12 weeks. If at any time during the two-year period their income was at a level where they could return to the age pension—rather than it being cancelled after 12 weeks—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 former coalition government bill also allowed for working age-pensioners, disability support pensioners and certain veterans' entitlement recipients and their partners to retain their pensioner concession card for up to two years after payment ceased.

As is known to the House, the bill didn't progress due to the election. But not long after the election, in an attempt to encourage the government to actually take these workforce shortages seriously and move quickly, which, sadly, they have not done, the coalition announced that a future coalition government would support older Australians who choose to work more, by doubling the amount of income that age pensioners and veterans service pensioners can earn without reducing pension payments. It was quite a bold thing to do in the immediate aftermath of entering opposition, but it was very clear to us at that time that the government was not acting with any sense of urgency in an area that we had seen workforce shortages exacerbated and the government on a go-slow.

This announcement, through which we made a gesture of goodwill to the government, giving them an idea that they could adopt—as, to their credit, they've adopted many other good ideas and measures that were put in place by the former government, would enable pensioners and of course relevant veterans entitlement recipients to earn up to $600 a fortnight and still receive the maximum amount of the pension payment. We estimated that this would benefit about 80,000 age pensioners and veterans who are choosing to work. Under our announcement, pensioners would continue to accrue unused pension work bonus up to a maximum of $7,800, which can exempt future earnings from the pension income test. This increase would be reviewed annually.

On 3 August: credit to Senator Dean Smith, who introduced a private member's bill to give effect to the policy announced by the coalition. The bill he introduced also includes extended qualification for pensioner concession cards and suspension of benefits and entitlements instead of cancellation, in accordance with the bill introduced by the former government, as I said, in early February. Additionally, in September the Senate agreed with Senator Dean Smith and the opposition bill, successfully amending the government's social services legislation to include the measures that were contained in Senator Smith's bill.

The first two schedules in this government bill replicate those two measures, so we are in an interesting situation whereby those measures, which were agreed to by the Senate and put forward by the opposition in an attempt to actually get the government to understand the urgency that is required here, were voted against by the government. Those amendments that were contained in the bill were returned from the Senate, yet we see them back here today in this bill. So, we will of course be supporting the bill, save for the amendment I've already announced, because these are measures that were introduced by the former government and indeed encouraged by us in opposition to get the government moving.

So, credit where it's due. Congratulations to the government. They've been slow and, sadly, the workforce shortages faced by Australians since the election in May have just gotten worse and worse. When I have spoken to a number of groups, particularly those representing senior Australians, they have been quite frustrated at the snail's pace that has been adopted by the government on an issue that I think even they concede is a very urgent one. The entire purpose of this bill is to help alleviate those workforce shortages by removing the disincentives for those on a pension to engage in the workforce even more. So, we will of course be supporting them, late though they are.

Schedule 1 of the bill, which relates to the suspension of benefits and entitlements instead of cancellation, will essentially allow for what I mentioned earlier, which is for age pensioners and veterans entitlement recipients to have their payments suspended for up to two years instead of cancelled. That is the essence of schedule 1. The schedule also provides for the same suspension period for partners of age pension, disability support pension and certain veterans entitlement recipients where the partner is receiving a social security pension or other veterans entitlement. This schedule also makes some minor changes to the existing suspension provisions for disability support pension recipients.

Schedule 2, again, we support. It extends the qualification for pensioner concession cards, and this will provide for working age pension, disability support pension and certain veterans entitlement recipients and their pension partners to retain their pensioner concession card for up to two years after their payment ceases.

Schedules 1 and 2 commence on the latter of 1 January 2023 or the day after the end of the period of one month beginning on the day that the bill receives royal assent. This highlights the urgency that we have tried to bring to this debate, the urgency that we have tried to impart on the government: these workforce shortages are acute and they've been acute for the last five months, since they have been in government. Sadly, we did not see that level of urgency from the government, but, again we will support them because it's better late than never.

Schedule 3, the pensioner work bonus temporary increase, will enable eligible Social Security pensioners over pension age and, again, certain veterans entitlements recipients over the qualifying age to benefit from a $4,000 increase to their work bonus concession balance, and a temporary increase to the maximum concession balance that they accrue until the 30 June 2023. In essence, it just means that pensioners will be able to earn more before the pension income test is applied and their payments are affected. Schedule 3 reeks of a government who saw the announcement that we made months ago and have sought to achieve the same effect in a different way, although there is one significant issue with what the government has announced. This is why I have moved an amendment here. These workforce shortages are not going to go away in a hurry, and levelling the playing field for pensioners and others on fixed incomes to do a little more work won't end the problems on 30 June next year. The problem with schedule 3, the problem with the temporary $4,000 increase, is that it in no way, shape or form takes into account what are clearly going to be ongoing issues into the new financial year. Had the government listened to the opposition, they would have put in place a longer term solution in accordance with what we announced, which would allow for the government to make a decision on a yearly basis. If there were continued workforce shortages or if the policy had to change for whatever reason, the government would have that flexibility to do that. Just giving this sugar hit between now and 30 June will give six months of respite, in a sense, to those pensioners who want to work more. It is a very short period of time, and I think it is very courageous for any government—or indeed any opposition—to assume that the issues that have brought this to the fore are going to be gone in six months time. So we encourage the government to support the amendments we've put in place, which will enable it.

In its prebudget submission last December, ACCI said it well when they noted there is an army of old workers with the skills Australia needs who'd like to work but don't participate in the workforce to the full extent because it reduces their pension. There are so many industries in Australia that are feeling the effects of these labour shortages, which is why we have implored the government to get moving with this and put this on the agenda, particularly in regional areas. As members throughout the House would know, regional areas have felt this in a more acute way than the rest of the country, partly because of depressed labour mobility and, of course, the reduced migration we have seen due to the pandemic over the last couple of years.

These are measures that are really important to businesses throughout our country, particularly in regional areas, and this highlights the problem that employers are still facing. Indeed, the ABS recently reported than almost a third of employing businesses are having trouble finding suitable stuff. I must admit I thought that was a bit low, when I compare that to the anecdotal evidence I get out there speaking to businesses, but, by any measure, the ABS saying a third of businesses are struggling is a huge wake-up call, and we hope these problems will be partly alleviated by this bill.

We know that about 80,000 age pensioners are supplementing their pension income with paid employment. That's part of the reason we made our announcement so shortly after losing government. Yes, it was partly to give effect to things that we had introduced in bill in February, but it was also to get the government moving to create that sense of urgency—urgency that we haven't seen. That announcement was on 26 June. We announced that we would support older Australians by increasing the threshold by which you would have your pension impacted from $300 to $600 a fortnight. It was essentially a very neat way of ensuring that people can double the hours and the amount of income without it impacting their pension.

We support the intent of schedules 1 and 2, which replicate what we put in place in a bill before the election, in February. With schedule 3, as our amendments highlight, there are huge inadequacies. It is being very slow, and the workforce shortages we have been dealing with, as highlighted today, have been here since the election. They've been getting worse since the election. We have had a government on the go-slow with these changes. Indeed, we have a government that voted against identical amendments the last time we sat. There's no obvious explanation why they would have voted against those amendments, supported by the Senate in the last sitting period, yet they will put these forward today. We won't do that. Measures that we supported last fortnight, we will support again. We won't show the same pigheaded this that the government has shown. Sadly, with the government not supporting those amendments when we had a bill return from the Senate with those amendments contained in them, Australians have suffered and waited even longer.

We have a Minister for Social Services who has, sadly, been on a go-slow here and who has, sadly, put in place in schedule 3 a measure that assumes that the workforce shortages and incentives that should be provided to pensioners now will be in place only until 30 June next year. For those pensioners who might be looking at putting in place more permanent work arrangements—going from one to two days on a more permanent level—they have that great uncertainty, under schedule 3 of this bill, of not being able to plan or commit to their employer in any serious way past 30 June. If the government thinks that the workforce shortage issues that have brought this to light are going to disappear by 30 June, they should come out and say it. They should show us what economic evidence they've got to back that up—evidence I've not seen.

In the absence of that, we would encourage the government to support the amendments that I have moved, which would mean that the government will be able to provide a further incentive, post 30 June of next year and into the new financial year, that will provide pensioners with the certainty they need to be able to enter into some of those commitments that they might want to enter into with their employer, doing those extra hours without it impacting their pension. Otherwise, we support the bill, because in the end it contains all of the coalition's proposals, albeit months late. But, as I said, we will support them because it's better late than never.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Andrew Gee (Calare, National Party, Shadow Minister for Regional Education) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

(Quorum formed)

Justine Elliot (Richmond, Australian Labor Party, Assistant Minister for Social Services) Share this | Link to this | Hansard source

I also rise to speak on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022. I am very pleased to be speaking on this bill today because it really reflects and recognises the importance that this government places on our older Australians and the high respect that we hold them in. As members of this House, we would all have the privilege and honour of representing communities with older Australians. These are the people who built our nation. They've worked hard, raised their families, paid their taxes. They should be treated with dignity and respect, and that's exactly what the Albanese government is doing. We understand our older Australians and are committed to restoring dignity to them.

The fact is that it's only our government who will protect the pension, who'll support those in aged care, who'll provide cheaper medicines for our seniors and who'll also provide a means to be able to earn more whilst not impacting their pension. We know how important that is. Our commitment to providing older Australians with real support includes a whole suite of measures, one of which is our workforce incentive, or the one-off increase in the work bonus income bank. We want to ensure that our older Australians have the option—if they wish to or they want to—to take up work or work some more, and this bill will ensure that our older Australians have the option to take up shorter-term or intermittent work or that older Australians remain in the workforce without fear of losing access to their pension. We know that is a major concern, and that's why we're acting.

We also know that our seniors, our older Australians, have a wealth of experience. They have highly skilled working backgrounds, and that's why our one-off income credit will act as an incentive for them—for those who do want to work—whilst also allowing an immediate boost to the supply of workers. We know this will help in addressing the skills shortage as well. Of course, we know that throughout the country, particularly in regional areas like mine, it is indeed a real challenge. I know from speaking to many seniors in my area that they're very pleased with the government acting so swiftly on this. They think it's really important for those who would like to do some of that occasional short-term work but also for local businesses, which have really been very positive about this move and the difference that it will make, particularly in terms of the extent of the skills crisis that we see and particularly given how much more those of us in regional Australia are feeling it.

The government's Jobs and Skills Summit, which was held earlier this year, saw this government come together with all the states and territories, businesses, community leaders and unions to discuss ways that we could boost the labour supply in order to meet the current shortages. I really commend the Prime Minister and the Treasurer for hosting the really important Jobs and Skills Summit. That's the approach of this government: working with people right across the board to get outcomes. That's exactly what happened; from that summit there were indeed many positive outcomes, and one of the outcomes was that we announced that we'd give older Australians the option to work and earn more. We've heard that from older Australians and from many of their advocacy groups as well because we listen to what people in the community are saying and work with them. So, as I said, we provided this, and now, through the one-off increase in their work bonus income bank, pensioners will be able to earn additional $4,000 without losing any of their pension.

The bill strengthens existing incentives for people over age pension age to take up work or increase the number of hours they work if they want to do so. It's an option that they have if that's what they choose to do. At present, only around three per cent of age pensioners earn income from employment. By providing these incentives and providing opportunities to work more without penalty, even a marginal increase in the number of older Australians in work will benefit those who do want to work and, of course, our local businesses and local economies. It will assist so much. The $4,000 increase will be added to the work bonus income bank of pensioners. Specifically, this will increase the amount pensioners can earn from $7,800 to $11,800 before their pension is reduced. The one-off increase will give our older Australians the option to both work and keep more of their money, and that's what they've been telling us that they want to do.

The work bonus allows pensioners over the pension age to earn an extra $300 per fortnight from work before the income test is applied. The combination of the income-free area work bonus means, for example, a single age pensioner with no other income could earn up to $490 per fortnight from work before their payments began to reduce. Pensioners are able to build up any unused amount of the $300 fortnightly concession in a work bonus income bank, which is also vitally important. This amount can be used to exempt future earnings from the pension income test. It means that a pensioner could choose to do intermittent or seasonal work and still benefit from the work bonus. It's designed to fit the requirements of our seniors and what they have told us they need in terms of their work commitments or the opportunities that they would have.

As I said, from commencement, age pensioners, disability support pensioners and carer payment recipients over age pension age, as well as certain veterans entitlement recipients over qualifying age, will have $4,000 credited to their work bonus income bank. I know many in my community and throughout the country have really welcomed this as a very positive step by the government to provide those incentives for older Australians.

The second key part of the bill means that those on the pension do not have to reapply for payments for up to two years if their employment income exceeds the income limit. Currently, the case is that age pensioners with employment income whose total income exceeds the income limit have their pension cancelled after 12 weeks. Instead, what will actually happen now is that their payment will be suspended for a period of up to two years. If during the two-year period their income is at a level where it can become payable again, an abridged process would assist their return to the age pension. That is a much more reasonable and feasible way to move forward for our seniors. It is a much better way to do it. It also corrects the current system, where social security payments were cancelled after 12 weeks of exceeding the income limit, with people having to start the process again when they were eligible. Having this abridged version makes it a lot easier. What is really important is that, to further remove barriers for older Australians re-entering the workforce, pensioners will also retain access to their concession card. It is vitally important for them to be able to have this card to access so many services. We have listened and we have acted.

We are delivering on our commitment to support older Australians right across the board and we've been doing that since day one of the election of the Albanese Labor government. Firstly, we had the pension increase. It was the largest indexation increase to pension payments in more than 12 years, and it was very much welcomed by pensioners. Since we've been in government, as I said, we have already ensured that more of our older Australians can gain access to the seniors healthcare card allowing eligible seniors and self-funded retirees to receive a number of beneficial health concessions. This has been very widely welcomed, I know, in my electorate and, I'm sure, in electorates around the country, with so many more people being eligible to receive that seniors health card, which is so vitally important. It has been raised by many people in my community for a very long period of time.

We're also delivering cheaper prescription medicines. We know that the maximum cost of medications on the PBS has doubled since 2000, so we're ensuring that millions of Australians will pay 30 per cent less for PBS scripts—again, a major concern among our seniors. In addition, we've introduced legislation to help incentivise our pensioners to downsize by reducing the impact of selling or buying a new home. This measure will allow more time for recipients to complete the process of purchasing their new home without the proceeds of selling a home being subject to the assets test. Of course, the Albanese government is committed to freezing deeming rates at current levels for two years until the end of June 2024—another issue that had been raised with us by seniors.

Through our successful repeal of the cashless debit card, we have put a stop to the former government's harsh plans to force age pensioners onto that card. We have shown time and time again how committed we are to restoring dignity for our older Australians and actually delivering for them. We are doing that through so many measures, whether it be on the health front, the work bonus or providing incentives to downsize. We listen to our seniors and we act. I must say, after hearing some of the speakers in relation to this bill, that they had nine years and they didn't do anything. They didn't actually do anything. It has taken our government to correct a decade of Liberal-Nationals waste, mismanagement and incompetence. That is what we saw.

In fact, the opposition has no credibility when it comes to supporting our pensioners because we saw here time and time again that they routinely made cuts to the pension, froze the pension rates and short-changed pensioners with their deeming rates. We saw that on many occasions. In fact, Deputy Speaker Georganas, you and many members of this House would remember in 2015 that the Liberals and Nationals did a deal with the Greens to cut the pension for around 370 older Australians by changing the pension assets test. The pensioners certainly remember it. I remember the anger in the community at the time about the fact that that happened. So, when we see any of these members of the opposition standing up today to lecture us, I say: 'They had nine years. When did they do it?' They didn't. Instead what they did was make it harder for our pensioners through their cuts, which we constantly saw.

We are committed to constantly helping our older Australians whenever we can. Indeed, in all of those measures that I spoke about, and particularly in the area of aged care, we have acted so swiftly because it's only an Albanese Labor government that supports our older Australians. They were let down by a decade of mismanagement and waste under the former government, but we are committed to fixing that. The bill before us today works to support—and to better support—those seniors who do want to work. It gives them greater capacity to work and also expands the workforce at a time of labour shortages, and we know how vital it is to do that. We have listened to our older Australians. We always have. We've always fought for them and, since being in government, we have continued to deliver. These workforce incentives are the latest measure that we are absolutely committed to delivering. If pensioners do want to work more they can, and their pension will not be impacted.

I commend the bill to the House.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

EVENS () (): I rise to support the amendment moved by the member for Deakin. As he outlined in his contribution, this amendment doesn't stand in the way of passing the bill. We of course support these three measures, although in schedule 3, we would really love to see more support than has been announced by the government in the recent budget. This comes at a time, of course, where inflation is at a frightening level: 7.3 per cent in the September quarter. It's pensioners and other people on fixed incomes who feel inflation the deepest and the toughest. The previous speaker was talking about the biggest increase in the pension in whatever period of time she quoted. As we know, the pension goes up linked to inflation, and so that the pension increasing because inflation is increasing is a zero-sum outcome; it is just keeping people's heads above water. That's why something happened under the coalition: it's a legislated outcome that happens automatically. Regrettably, under this government it is at the highest level ever because inflation is at such a significant level. That's something which is creating a lot of angst for pensioners and other people who are on fixed incomes, or for those who are on lower incomes. It's because inflation is the most terrible thing for people in those circumstances to have to battle.

Unfortunately, the Reserve Bank and, certainly, the budget papers indicate that inflation is only going to go higher than 7.3 per cent. It was 7.3 per cent in September and the pension was recently increased on inflation figures that might prove to be much lower than the sort of inflation that pensioners and seniors generally are going to have to battle with in the months and possibly even years ahead. Regrettably, every time all these forecasts get updated they are going higher and higher, and not just in this country but around the world.

So 7.3 per cent is tough; that is really tough. And, of course, it's higher than that for some of the staple items in the household budget—like groceries and energy. Energy is 56 per cent over two years. Unless the pension is going up by 56 per cent then the amount of money a pensioner spends in real terms on electricity is going to have to increase dramatically. When you're on a fixed income, that means your discretionary expenditure will have to drop commensurately. It means that there are a lot of things that pensioners in this country aren't going to look forward to doing like they could in the past if prices keep going up in such an out-of-control way, like electricity prices have been confirmed to in the budget by 56 per cent. If that forecast is anything like some of this government's other forecasts then no doubt the next time they update it it will be even higher.

So this is an important time to be doing all we can to help senior Australians—and pensioners, in particular—which this bill does in its three schedules. The first two, as the member for Deakin pointed out, have been lifted from the previous government. At the beginning of the year we put them into the parliament and the new government is adopting them, like many other pieces of legislation which we put through the parliament in recent times. They were introduced and lapsed in the last parliament. Schedule 1 is in regard to the consequences of breaching the income limit on the pension—not being thrown off the pension and having to go through the difficult process to reapply, which is up to two years, and get the pension again. Instead, a person will simply be able to update their circumstances with Services Australia when they are eligible for the pension again; they will be able to start receiving the pension again without that rigmarole. And schedule 2 keeps access to the concession card. People who were receiving the pension and who trigger the income limit because of higher income that they've earned then go off the pension for whatever period of time that might be, but they won't have the concession card taken away from them. That's a very important thing as well.

Schedule 3 is the new and significant element of this legislation. It increases the amount of income people can earn before triggering a loss of the pension or a step down from the full rate of the pension, depending on the circumstances. At the moment, you can earn $300 a fortnight and not have your pension affected. You can also accumulate that in a financial year up to $7,800. You can accumulate that and earn that amount of money before it affects your eligibility for the pension. What the government are doing here, with the intention of this coming into effect from 1 December, is saying that just for the period from 1 December through to 30 June 2023 we will allow you to earn an extra $4,000, which will be accumulated into that income bank. So instead of $7,800 you could potentially go up to $11,800. Between 1 December, when that would be applied, and 30 June you can earn, in this financial year, up to $11,800.

Of course, this is effectively putting in place a policy that was announced earlier in the year by Peter Dutton, at a time when unemployment is at historically low levels. I think the last time unemployment was at 3.5 per cent was the early 1970s. It is a time of extreme labour shortages in our economy; a time, as I have canvassed, that inflation is growing at such a rapid pace that it's putting an enormous amount of pressure on the household budget of everyone, pensioners in particular; and, equally, a time when unemployment is so low. The cost to the budget of unemployment benefit payments is reducing commensurate with that reduction in unemployment. So it is extremely common sense to help our pensioners who want to work and earn some extra money on top of their pension, to support them as best we can to do so and to help the businesses out there who equally have skill shortages. In many ways it's a win-win outcome.

I particularly acknowledge my constituent Mr Ian Henschke, who has been an excellent advocate for Australian seniors on this policy initiative going back way before the last few months. It has been something they have been calling for for a long, long time. I was very pleased when the opposition leader made the announcement of our first coalition policy being to support pensioners who want to earn more before it impacts their pension and obviously provide the equal outcomes for businesses, as far as getting more units of labour into the economy to address skills shortages. Ian has been working on this for a very long time. Through his hard work—and I would think also the fact that we made the announcement—the government subsequently decided that they would put in place a measure that sort of goes down this path.

As the member for Deakin made clear in his contribution, it's the view of the opposition—and I would've thought it was a pretty obvious point to make in the economic circumstances that we have right now—that this should not simply commence on 1 December and end on 30 June 2023, so run for seven months. We've said that we think the $300 a fortnight income limit should increase to $600 a fortnight, and that this needs to apply beyond 30 June 2023, into the future, with sensible periods of review every 12 months or so. I certainly don't think the principle and the point of this policy can be properly achieved by putting it in place in such a contracted period of time and bringing it to an end seven months after it starts. If we are trying to help pensioners who are having their cost of living skyrocket on them, who would like to re-enter the workforce and earn some extra money to help with those cost pressures and save for things that they want to help better enjoy their retirement—as we should absolutely support them to do—then ending this on 30 June is a very short-sighted policy position. It's also not really going to help as many people as it could to properly plan into the future for how they might structure the way in which they earn this extra money. A lot of people would probably avail themselves of seasonal labour opportunities.

If you cannot earn $11,800 a year, it might be that, particularly in regional communities, there are some seasonal opportunities that won't come about between 1 December and 30 June. They might be in a different part of the annual cycle, particularly in the agricultural industries et cetera, and bringing it to an end on 30 June means a lot of people that could be in a position to take advantage of it might not end up doing so because, by the time they put in place the plans and some changes around what they have going on in their lives to take up this opportunity, the opportunity will have been removed from them.

We clearly are going to have ongoing skills challenges in our economy, and we definitely will be having dramatic cost-of-living increases for a long time into the future. That was very regrettably confirmed both by the Reserve Bank, after their meeting last week, and in the budget papers two weeks ago. Both the Commonwealth Treasury and the Reserve Bank of Australia are projecting that inflation is only going to increase from its current levels, and, as I pointed out earlier, unfortunately every time we see these inflation projections and some of the other sub-projections about things like energy costs et cetera, they seem to ratchet up and up and up. For some time now we have not had any economic forecasts that are going anywhere but up when it comes to cost-of-living pressures.

This is a measure that of course puts pensioners in a position to earn more money to help them deal with that cost-of-living burden. We want to do all we can in this place to support them with those challenges, and if inflation is only ever increasing then more and more pensioners understandably are getting nervous about how they're meeting their costs. They're having to make sacrifices and take things out of their household budget, and that's something they shouldn't have to do. Retirement should be something that is enjoyed and that is not a time of financial stress. This measure, if it were extended beyond 30 June, would put people in a position to be able to earn some more money, which would take that pressure off. They may be able to more than take pressure off, which would put them in a position to do more things that they wouldn't be able to do within their existing budget just from the pension and then they'd contribute more to our economy

Employers, particularly those that require seasonal workforces et cetera, would see the opportunity of providing a pathway for people who are on the pension not to take on some permanent full-time role that would breach the income cap but instead to do some seasonal work perhaps or some duties on a weekly basis. Whatever the structure of it might be, increasing the cap from $7,800 to $11,800 just for a five-month period—so $4,000 in a five-month period—is a lost opportunity to provide a lot more benefit to our economy from this policy and to give pensioners the ability to plan with much more certainty into the future about how they manage their finances.

The second reading amendment makes the point about going from $300 to $600 a fortnight and not bringing these measures to a close at 30 June 2023 but instead extending the ability for pensioners to keep earning that higher rate, which is being ever eroded anyway by inflation. By increasing the cap from $300 to $600 when inflation is at 7.3 per cent and possibly going to eight per cent or higher, we see , frankly, that pensioners need this support. They need this option and they need the certainty of it extending well beyond 30 June. I commend this second reading amendment to the chamber. As I say, we support the three schedules to this bill, but we wish that schedule 3 would go further.

(Quorum formed)

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

Stephen Bates (Brisbane, Australian Greens) Share this | Link to this | Hansard source

I move:

That all words after "reading" be omitted with a view to substituting the following words:

"the House calls on the Government to lift the rate of all income support payments above the poverty line".

Late last month was anti-poverty week and, across the country, activists, campaigners and community members came together to highlight the fact that in Australia, right now, one in eight people live in poverty, and for children that figure increases to one in six.

For those living on Centrelink payments, 62 per cent of recipients are either skipping meals or eating less than they need. In a country as wealthy as Australia, this is simply unacceptable. The Senate Community Affairs Committee launched its inquiry into the extent and nature of poverty in Australia, hearing from community organisations and public housing residents. I want to commend my colleague Senator Rice for her advocacy on this issue and work chairing that inquiry.

The first hearing heard devastating evidence. The Victorian Council of Social Service reminded the committee that by far the most effective policy to combat poverty would be to raise the rate of JobSeeker. They told the inquiry that the rate of JobSeeker is so low that it traps people in poverty. It's no longer a safety net. It's not a springboard to prosperity; it is now a cage. I would like to share some stories of people, who have shared their stories with me, about what it's like to live on income support in Australia:

I am 61 years young and have been on JobSeeker for a year or so. I have had two skin cancer operations, both of which required several months off in the last 12 months leaving me unable to work for months at a time. I was working as a casual doing around 30 hours a week before that earning good money.

Trying to live on the Centrelink payments is impossible. After paying rent there is barely anything left—not to mention gas, electricity, phone/internet, water, fuel/car, after which I was left most weeks only able to afford scraps for food. Meat has been out of the question as were most other items and you can forget anything like clothes and underwear etc.

It is the most undignified way to live that I have ever experienced and brought with it a deep feeling of shame, worthlessness and anxiety.

I am good with money and sticking to budgets but this was something that could not be balanced which meant using my credit card for simple things like Christmas and Birthday Presents for my Grandchildren—this also accumulated great shame, depression and despair. I have worked my whole life and been an active part of my children's and grandchildren's lives as well as the community but I am too scared to go anywhere unless I absolutely have to now because I need to be so frugal even when it comes to using fuel.

I am sure I am not the only who has fallen on hard times out of no fault of their own and has been put through this humiliation.

I'd like to share one other story:

I'm currently on JobSeeker while studying to join the mental health workforce. My disabilities are chronic, without cure, and I've had to stop taking medication for my mental conditions because the impact on my body conditions was too high.

Every week I'm assessing whether the priority is to buy enough protein to sustain myself, or if I need to make room in the budget for my specialist appointment. I want to get to the bottom of my mobility issues.

I want to finish my studies and placements so that I can support the wellbeing of my community.

(Quorum formed)

I think it is quite telling that the coalition would interrupt a story about people's poverty for a quorum call in this place. I will finish the story of my constituents by saying that they haven't been able to save money since they were laid off at the start of 2020. Only due to the generosity of their friends are they mostly still debt free:

Scraping by on income support and the measly $50 of 'rent assist' makes me feel like our government has forgotten what people need to survive in the economy they've created.

These stories aren't unique to JobSeeker but affect recipients of the age pension and all income support.

Despite the clear and present need, the government has not substantially increased the age pension or the rate of JobSeeker in its budget. At the same time, the cost of Labor's stage 3 tax cuts has blown out to $254 billion over 10 years. Make no mistake: poverty is a political choice. It's a choice the Liberal government made for a decade, and now, after its first budget in as many years, it's seemingly the same choice that Labor is making. They've made a political choice to keep people subsisting on income support payments below the poverty line. They are choosing to keep struggling Australians in poverty at the same time that they vote to give themselves a $9,000 tax cut.

But, despite the bipartisan commitment from the old parties to keep people living in poverty, there is a different way. At the last election the Greens took a clear, concrete proposal to provide a guaranteed liveable income for everyone on income support. This would lift all income support rates, including the age pension, to $88 a day. It would abolish cruel, punitive measures like compulsory income management and work for the dole that make it harder for people to access income support. The Greens do not believe we should live to work. In reflection of these values, we believe we must bring the retirement age back down from 67 to 65 so that every Australian pensioner can have access to income support above the poverty line. We'll keep fighting to ensure that no older Australian is left behind. So yes, we will be supporting this bill, because it makes it easier for people to access income support, and we welcome the Labor Party's commitment to taking the small step to support age pensioners.

I want to also thank National Seniors Australia and the other countless advocates who have pushed for a better income support system. The Greens stand with you. We will keep pushing for an increase to income support payments so that they are all above the poverty line.

And I just want to respond to some comments made earlier by the minister that I believe were not a fair reflection on the approach the Greens have taken to the age pension. I want to put it clearly on the record that we took policies to this election that would see an increase to the age pension to $88 a day and earlier access to the age pension, from the age of 65. If anyone in here wants to match these policies, we would welcome that. We want to see an income support system that provides more support, and that's something we will keep fighting for—for age pensioners, for people on JobSeeker, for people on the DSP and for everybody else.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Elizabeth Watson-Brown (Ryan, Australian Greens) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

The original question was that the bill be now read a second time. To this the honourable member for Deakin moved as an amendment that all words after 'That' be omitted, with a view to substituting other words. The honourable member for Brisbane has now moved, as an amendment to that amendment, that all words after 'reading' be omitted, with a view to substituting other words. The question for the House now is that amendment moved by the honourable member for Brisbane to the amendment moved by the honourable member for Deakin be disagreed to. I give the call to the honourable member for Cowper.

Pat Conaghan (Cowper, National Party, Shadow Assistant Minister for Social Services) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022 and to support the amendment by the member for Deakin. Arguably, the silent generation and the baby boomers are the hardest-working generations since the industrial revolution. They built this country. We see feats like the Harbour Bridge, the Opera House and the highways around Australia, and many of the people who built those are now our pensioners. And not all of them want to be retired. Not all of them want to play golf or travel around in a campervan, and not all of them who are currently on pensions can afford to do so.

Among those in these two hardworking generations that I talk of—the silent generation and the baby boomers—many are facing tough times, with cost-of-living pressures and increasing fuel prices. Many of them still rent. But what you can say about those generations is that that their work ethic generally was second to none. They got out there and they worked hard. They didn't complain. And, unlike some generations, and I include mine, they didn't have their hand out. They never stuck their hand out and asked for something from their governments. They got up, they dusted themselves off and they got on with it. They worked hard to get ahead. But some of those who worked to support this country and who built this country do rely on their pension, and that is why I support this bill—because they deserve to be able to go out there and put a little bit more money into their pocket to combat the cost-of-living pressures that they're facing today or just to give themselves something nice, a treat, or even to buy Christmas presents for the grandkids.

When you talk to employers in the electorate—and no doubt around Australia, in the electorates of all the members who are contributing today—if you go into a retail shop, a cafe or a restaurant, or industry, the first thing that employers will say to you is 'We cannot find workers; we cannot find enough workers for the floor, skilled or unskilled.' The previous speaker, the member for Brisbane, referred to teachers. We can't find them. And yet they're there, willing to work, but can't because their pension won't allow it. Well, this is a step in the right direction.

I would have liked to have seen a much larger step in the right direction to enable twice the amount—$600 a fortnight rather than the proposed $453—but, as I said, it is a step in the right direction. In Cowper alone, there are some 130,000 eligible voters. Over 30 per cent of those 130,000 are over the age of 67. That's in my electorate alone, so think how many people across Australia would be willing to work. We have a workforce shortage in the agricultural sector—180,000 people. We're seeing farmers plough their fruit and vegetables, their horticultural products, back into the ground because they can't find people to pick it. They can't find the workers who want to go out there.

I've spoken to plenty of pensioners. In fact, over the weekend I was at the Kempsey Riverside Market, and a fellow came up to me and said, 'When is the government going to pass this bill so I can go out and get some work—because it's been four months, five months.' Fortunately we'll be able to do it today, but unfortunately it won't be the amount that he was looking for. I'm sure we all have these stories of pensioners saying, 'I want some more money in my pocket.' And I do commend the government for taking up what was our bill previously and with a relatively bipartisan approach.

Employers know what they will have in pensioners with that work ethic. They know they'll show up, they know they're going to be as honest as the day is long and they know that, at least for part of the time, they'll be able to fill those job shortages—rather than somebody who should be working on the business being there working in the business. I was talking to a lady in a bottle shop the other day, and she was telling me she was on her 17th day straight of doing 12-hour shifts. She was in her late 50s. She said, 'Pat, I just cannot find anyone.' Everywhere I go—and I'm sure you have the same, Deputy Speaker Buchholz—you'll see the signs in the windows: vacancy. My 15-year-old son put four resumes in for four jobs and got all four of them. That's how desperate they are. I wouldn't let him take all four jobs; he's got to do his schoolwork first!

There was another issue raised previously, and it was something I hadn't turned my mind to, but it was an excellent point, and that is the mental health and wellbeing of pensioners from getting out into the community. I know that many of them do volunteer work. Many of them need that camaraderie and need that community support. By getting involved in work, working with other staff members, it actually gives them a form of confidence and will to get out there and be part of the community. In terms of the mental health aspect this can only be a positive thing.

This is based on the coalition's proposed bill, some four months ago, to double the amount of income that age pensioners and veterans can earn without reducing their payments, which in real terms means an increase of potential earnings from $300 to $600 per fortnight, which would go a long way for the pensioners. I do commend the government for recognising that this is a good thing. It's a commonsense thing. It really is. You have a workforce shortage. You have people who want to work. Let's put them together. It won't solve the problem. As I said, we are 180,000 people short in the agriculture sector and that's not looking across at all the other industries and sectors.

I do commend the government. But I would urge them to support the amendment by the member for Deakin. I will support it, even if the government won't support the amendment, because we need to get on with it. We need to give some sort of certainty to those pensioners and veterans out there that they can actually earn some more money, most importantly, to combat these rapidly increasing costs in life. It has been four or five months now, but I am sure that pensioners watching this or listening to this or being involved in this would also urge the government to do the very same thing. Let's not give them a lukewarm, weak cup of tea. Let's give them nice, hot, strong coffee and get it all moving.

Importantly, and I will say it again, I do urge the government to reconsider the strength of this bill as soon as financially viable. I certainly hope it goes further than the sunset clause in the bill. We have to provide that certainty to pensioners and we have to provide that certainty to our employers, not just for the next six months or 12 months but for the next 10 years, for the next decade, to ensure that we can work through these times that are coming that are going to be very difficult. It is going to be difficult for businesses. It will be difficult for the average punter. Prices are starting to rise. We've seen that significantly in gas, petrol and electricity. For a pensioner it must be very difficult under normal circumstances, but where you see electricity prices going up 57 per cent that must be terrifying, knowing that you have a limited amount of money coming in every fortnight and knowing that those cost-of-living pressures are going through the roof. I do commend this bill. I do urge the government to support the amendment by the member for Deakin. I hope that they take it very seriously and think about the pensioners when they do so.

Dai Le (Fowler, Independent) Share this | Link to this | Hansard source

I rise to speak on the proposed amendments to the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022. I acknowledge the government's proposal to incentivise pensioners and disability support pension recipients to stay in the workforce in light of these recent workforce shortages. I think this is a step in the right direction. However, I think what this bill does is a drop in the ocean compared to what the government should be doing to get pensioners back into the workforce.

We are in a cost-of-living crisis. With the rising cost of fuel, food and petrol, it comes as no surprise that many pensioners are feeling the pinch. (Quorum formed) Many pensioners want the opportunity to earn more income to maintain a comfortable standard of living. According to a recent survey by the Association of Superannuation Funds, only six per cent of respondents believe that the age pension level of about $40,000 a year is enough to retire on. Thirty-three per cent believe a comfortable retirement standard of $65,000 a year would be enough. It's clear that Australians think the pension alone is not enough to help sustain the increased cost of living.

However, under this new work bonus scheme, pensioners could accrue a total income bank of $11,800 a year in which they are able to take seasonal shifts. This gives a potential income of $491 a week for pensioners if they were to work every week for six months, which is about two shifts a week. This scheme was originally meant to last for seven months until June 2023. While this is a good solution for short-term and seasonal workers, it doesn't do much in the way of incentivising seniors to stay in the workforce and to keep consistent shifts.

National Seniors Australia have argued that the six-month scheme is far too short to encourage uptake and that it requires time for the government to effectively communicate these new changes to both pensioners and businesses. Our business community, which is comprised of 98 per cent small businesses, would also require the necessary multilingual resources to inform the senior and pensioner communities of these new work opportunities. However, I'm happy to say that after consultations with my office and that of the member for Mayo, Rebekah Sharkie, the government heard our concerns. The pilot scheme will now be amended to extend until December 2023.

In an electorate like Fowler, where nearly 77 per cent of residents use a language other than English at home, there must be a plan to ensure they're not forgotten by this new scheme due to lack of communication from the government. A one-year pilot program would be long enough to educate and inform my pensioners and businesses, who hail from many different cultural backgrounds, but would also give ample opportunity for new pensioners to take up the scheme. This is definitely a step in the right direction. However, more can be done to incentivise seniors to re-enter the workforce.

National Seniors Australia also raised that the $4,000 limit is far too low to truly incentivise seniors to participate overall, and is not nearly high enough to incentivise pensioners to navigate the complexities of Centrelink. The Department of Social Services has also reported that the original six-month pilot may only result in an uptake of 1,000 extra workers a year, which is a ridiculously slim figure considering we have over 470,000 job vacancies around Australia. What my constituents are calling for are consistent work opportunities, not only so they can put food on the table and increase their quality of life but also so they can be productive citizens and feel like they're part of the community in which they live.

I refer to my constituent, Katherine Allen, who is 29 years of age, has three kids and is on a disability support pension. She has expressed her desire to work and contribute to the local economy. However, she has found that getting consistent work would reduce her pension to the point where it would be impossible to support her and her three children. With three mouths to feed, she says it's more financially viable to stay on the pension rather than to work and has spent her time volunteering for local community groups instead. We must take a look at the entire pension system as a whole, instead of focusing on small schemes that only benefit a few.

It's unfair that pensioners like Katherine are scared of having their pensions taken away just because they want to give back to the community by working at their local cafe or giving a few extra days to a nursing home. If a pensioner were to use up the $11,800 workforce income bank, they're still allowed to earn $190 a fortnight on top of that. However, even this barely equates to a single day's work. If they exceed the $190 limit then their pension is reduced by 50c for every dollar earned over the income limit. This is a small incentive for pensioners to take on a long-term job, if they fear they could have their pensions docked for working extra hours. This would only drive pensioners to work in what the ATO refers to as the 'shadow economy'—working cash-in-hand jobs that are unregulated and untaxable. I know this is very much the norm in the community of Fowler, where many prefer cash-in-hand jobs, as they're deterred by the complex reporting mechanisms of Centrelink and aren't willing to risk their pensions for a few sporadic shifts over the year.

The government must look to invest more into overhauling the pension scheme so that people aren't afraid to work. In saying this, I appreciate the measures taken in schedules 1 and 2 of the bill to ensure that a pensioner's concession card is suspended for two years and not cancelled if their total income earnings taper their pension to nothing. This means that if a pensioner were to lose a consistent source of income or, for whatever reason, chooses to get back on the pension, they should be able to transition back seamlessly through a less-complex system rather than having to go through the process of reapplying for a new pension with Services Australia. This also means that a pensioner is able to access their concession card to access cheaper health services and medicines, which I know that pensioners fear they could lose access to should they take on additional work.

With more and more GPs now having to turn away from bulk-billing, basic health-care services are becoming less affordable for pensioners. The first point of contact with a health issue is now becoming less accessible. GPs in my area who still choose to bulk bill are being so inundated with patients that locals have to wait weeks just to see them. The Australian Medical Association have told me that some of their doctors are at the point where they must stop bulk-billing to run a financially sustainable medical centre, but they refuse to do so as many of their elderly patients would opt to avoid seeing the doctor altogether if they needed to pay out-of-pocket costs.

The repercussions of stopping bulk billing in a low socio-economic area like Fowler are detrimental to the overall health and wellbeing of our pensioner community. With cost-of-living pressures, we cannot expect seniors and pensioners to break their budget just to get simple healthcare services. Giving pensioners the option to work would alleviate so much of the cost-of-living pressures they face today. These changes to the pension are imperative to ensure they can afford to access the health care they deserve, particularly as they grow older. I would like to reiterate that the government must ensure that both pensioners and businesses are informed of this new system, and they must be given the resources and assistance they need for a smooth transition to come off the pension.

It's great that the government is extending this scheme until December 2023, but it also should look to include JobSeeker recipients as part of this scheme. Fowler has the fifth-highest number of JobSeeker recipients in the country. A program like this could incentivise many to come off JobSeeker, to work a few days where they can earn some income and embed themselves in the local community and economy. In fact, 43 per cent of jobseekers are unable to work full time and have partial capacity to work due to disability or sickness, according to the Department of Social Services. However, some recipients are not eligible for the disability pension. These individuals should be given the option of entering the workforce for part-time or casual work to top up their family budget or put away savings for a rainy day, especially in these tough economic times.

I understand the reasons behind why the government is only holding out this program to a limited group. I understand that there is an immediate skills shortage that needs to be tackled. However, there is also a cost-of-living crisis that will go beyond the next 12 months. I hope that the government will consider extending the scheme indefinitely for specific sectors which face ongoing workforce shortages, including the health and disability sectors. In the care sector alone there are currently 74,000 job vacancies, according to the ABS. I know that in my electorate of Fowler aged-care facilities not only need workers but need workers who can assist our non-English speaking residents. With many bilingual pensioners who are ready and willing to work, it only makes sense that they should be given the opportunity to assist other elderly patients who struggle with English and would feel more comfortable dealing with a nurse who can speak their language. The government could do better for CALD communities, and allowing pensioners to work in this sector could alleviate the strain our healthcare system is currently under and also cater to the unique needs of my electorate.

I know this scheme is one small step towards keeping our economy going, but in my opinion the government needs to think bigger. I refer to a community member Brian Caw, who contacted my office imploring the government to allow seniors to work. He was concerned his superannuation could run out in his lifetime, leaving him without a sustainable income as he gets older. Brian believes that, if he were given the opportunity to work, it would not only allow him to afford the bare basics but also improve his quality of life by getting private health insurance or joining a gym. He says, 'Actively deterring potentially hundreds of thousands of people wanting to continue to contribute to the workforce is to the detriment of all.'

The Treasurer said time and time again that we need to cut corners to make up for the nearly $40 billion budget deficit that the previous government has left them. However, incentivising seniors to work is a ripe opportunity that would bring in a huge amount of revenue in income tax. In fact, a study by Deloitte shows that, if we only had an additional five per cent of Australians over the age of 55 back in the workforce, it would boost our economy by $48 billion. If we look towards countries like New Zealand, where pensioners are able to work freely as much as they want without impacting their pension, it would encourage participation in the workforce and improve our economic standing as well. Deloitte's economic modelling found a policy of an opt-in exemption from the income test would be cost neutral if only 8.3 per cent more pensioners re-entered the workforce or worked longer. Beyond this, it would be revenue positive. Pensioners in Fowler are suffering in this cost-of-living emergency. (Time expired)

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

My electorate of Lyne has, at least the last time I checked the website of the Department of Social Services, more pensioners that are receiving income assistance than any other electorate, so this bill is of critical importance to many in my electorate. I support the bill, but I have a few questions about it, particularly in light of the comments made by the previous speaker.

The concept that the work bonus amount is increased to $300 per week was a coalition initiative brought about by the workforce shortages as a result of COVID shutdowns and the loss of a lot of our workforce, who returned to their home countries. There are plenty of pensioners receiving the age pension or the disability support pension who would like to work. The disincentives are that if they earn too much then they will earn far less on their pension, so this increase to $300 is welcome. What we argued for is that it should go up to $600 on top of the existing $180 so that they would be able to earn $790 a fortnight without affecting their pension. I think that's a great idea because there are plenty of people who could easily exceed the $300 increase on top of the existing $180, particularly if they're doing seasonal work.

Seasonal work in agriculture and horticulture is very intensive work and some of these places are huge concerns. They might pay $3,000 a week if you're a good worker. I think they should be able to earn this rather than keeping it at this artificial income bank limit which, admittedly, is increased. It should be able to be earned at any time in a calendar year, because then we would have many more people who are receiving the age pension who would be quite happy to go off and work intensively in the harvest. That's when a lot of the regional Australian workforce is critically short. This is rather than leaving fruit on the vine or tree and having things rot which, unfortunately, has happened in this last season because there were not enough horticultural harvest workers. That's a tragedy. Increasing this by $600 a fortnight would basically take it up to the tax-free threshold.

I would have no problem if we were to introduce a scheme like they have a New Zealand. Their workforce participation by pensioners is way in excess of what it is in Australia. When you think about it, it would be good for the economy and, if they're on the age pension, but then working, they go up to the tax-free threshold and, if they earn more, they pay tax. At the moment, there's a disincentive because people start losing their pension. Let's think about it: if they're working and earning money and paying tax, then they're working to pay themselves a pension through their taxpaying. Why doesn't Treasury love that idea? It would make so much sense: businesses would be better off, the economy would be better off, the pensioners would be better off and the tax department would be better off.

But there's this idea that it's a punitive measure to take the person's pension entitlement away just because they want to go and earn extra money. There are a lot of non sequiturs in this argument, but we are left with what's being proposed. Pressure from the Leader of the Opposition, and from us before the election, to increase this work bonus allowance has borne fruit and is coming in. But I urge the government not to limit it to the end of 2023 but to keep it going ad infinitum, because we're going to have workforce shortages for years—until the normal flow of youth visas and temporary migrants who come here for a year or two and who work in various jobs in regional Australia is restored. I don't know any industry that has a full workforce at the moment in regional Australia—whether it's in on-farm or off-farm jobs; in factories or in small businesses; in retail or hospitality or tourism, you name it, there are shortages everywhere. There are so many people who are retired teachers, or just people who have worked in blue-collar jobs, who would love to earn a bit extra but don't want to work all the time. You could have people doing locums in schools, in nursing—in all sorts of industries that are critically short of skilled and trained staff. It also facilitates a lot of people who might come into a business in a training role, because a lot of people with trade skills can be of great value to a business. When you take on apprentices, you don't really get a lot of value out of them because you're tying up a productive worker in supervising them. But if you had highly skilled tradespeople coming back from retirement to do on-the-job training with apprentices, it would be good for the business, good for the retiree pensioner and good for the apprentices—they get the benefit of hands-on supervision without the pressure to just get the job done.

There are a lot of good things in this bill, but I must say we could look at this whole issue in a different light. I understand the financial departments think it is a bit of a rort but, really, the minuscule number of people who are working is a testament to how negatively it is seen. The good thing is that if they do exceed the work, they will just have their pensions suspended, not cancelled as under past legislation. That is a good initiative, and we supported that when we introduced it in the first place. I thank members of the Senate who brought this on again and led to it coming back into this House for review.

The provisions that apply to disability support pension workers is also generous—otherwise, you'll have many of these people on DSPs just surviving on the pension and not contributing at all. Obviously, if they have qualified for a DSP, they will not be able to work full-time, but when you have no workers, someone there for a day or two is a lot better for a business than having no one. In hospitality in my region, some cafes and restaurants don't open on weekends—and we're in a tourism hub—because they haven't got enough workers. It's across the board. There is a chronic and acute shortage in regional Australia. With the next picking seasons, we will have many more pensioners—the silver wanderers in caravans—turning up to work on farms during harvest because they feel they're not going to go ahead two steps earning work but then have their pension drop off over a cliff.

I commend this bill to the House, although I do recommend that the government now keep an eye on this and extends it forever. It's a step in the right direction, and when the Treasury realises how much extra growth in the economy we get because we have people working again, it may take our advice and extend it up to the full tax-free threshold, rather than this artificial low level that it's stuck at now.

Andrew Wallace (Fisher, Liberal National Party) Share this | Link to this | Hansard source

I rise to speak on the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022. At the outset I will say that, on the face of it, the government supports this bill, with a second reading amendment calling on the government to increase the work bonus to $600 a fortnight from 1 July 2023. This is, yet again, a bill whereby essentially the government is copying some good ideas from the coalition, both when we were in government and now whilst we are in opposition.

I want to talk a little about the good people of Fisher. Fisher is still regarded as a rural seat. Some people might find that a little bit hard to believe, with the great places of Mooloolaba, Kawana—I know the member for Braddon is having a bit of a chuckle, but we have significant farming and agricultural pursuits in the good seat of Fisher. We have a great deal of strawberry farmers, pineapple farmers and macadamia nut farmers. We have cattle farmers, like the good member for Braddon sitting here at the box. He's not the only cattle farmer in the country, although he pretends he is; he might say he's the best! But the good people of Fisher are a very good growing, agriculture community, and I'm very proud to represent them.

But what a lot of my farming constituents are telling me—and in fact a lot of business people—is that they just cannot get staff. We're seeing cafes closing. We're seeing cafes open for only certain hours of the day. We're seeing many businesses where the business owners are absolutely being pushed to the point of exhaustion because they are having to work longer and longer hours because they just simply can't get staff. We're seeing the destruction of crops because they can't be picked.

These are very real issues, and when you look at the No. 1 burning issue that's troubling Australians at the moment it is of course cost of living. Australians are really feeling the pinch right now. When we find a situation where employers can't get the workers that they need to be able to run their businesses, we're heading towards dangerous times in this country. It is just so incredibly important that, as a parliament, we look at all avenues to try to free up that labour marketplace to get as many people as we possibly can into employment. Those who might be listening to this—thank you!—and who are at an age where they've retired may not want to work, and that's fine. But equally, many people who are on the age pension or veterans pensions, who are certainly on a fixed incomes, with the rising cost of living, are having trouble making ends meet. And that is axiomatic. We know from the budget just last week that our electricity prices are set to increase by 56 per cent over the next two years. Gas prices—and these are figures based on the government's own numbers—are tipped to increase by 44 per cent over the next two years. The price of diesel is absolutely out of this world at the moment. Petrol is around $1.75 a litre on the Sunshine Coast. Diesel, for some unbelievably unknown reason, is somewhere around $2.35 or $2 40 a litre.

If you're a retired person who might enjoy going up to Fraser Island on occasion, as many people in Fisher do, then you probably own a four-wheel drive—a diesel four-wheel drive—and you're paying $2.35 a litre to put diesel in it. These cost-of-living pressures are set to increase and to increase significantly. So, as I said, we need to do everything we can in this place as an opposition to work collaboratively with the government to try to ease the cost of living for Australian families. I recently did my 'Tour de Fisher', where I rode my pushbike around the electorate—in lycra, I might add—for my state colleagues. I have to say that almost every person I met—

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

A tour de Fisher?

Andrew Wallace (Fisher, Liberal National Party) Share this | Link to this | Hansard source

I do it over a week, member for Dobell. I talk to over 130 constituents and almost all of them talk to me about the rising cost of living. When I was interviewed by a local radio station a couple of days later, they said, 'What's the burning issue on the Sunshine Coast?' I said this: 'The burning issue is cost of living, cost of living, cost of living.' Everybody—and I mean everybody—is feeling the pinch at the moment.

When you've got people who are feeling the pinch, which is just about everybody, and you've got businesses that can't get staff, it stands to reason that we do what we can to try and get as many pensioners, age pensioners or veterans who are on a pension, back to work, if that is what they would like to do. Certainly, many of them are saying that is exactly what they want to do.

The bill amends the social security law and Veterans' Entitlement Act 1986 to encourage age pension, disability support pension, carer payment and veterans entitlement recipients over age pension age to engage in paid employment. This includes suspending the benefits and entitlements instead of immediate cancellation, allowing for a more streamlined step-up or step-down from the incentives. It means extending the qualification for pensioner concession cards and temporarily increasing the pensioner work bonus.

Once again, this policy reflects measures proposed by the coalition in government. On 10 February 2022 the coalition, when it was in government—I remember those glory days—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 the coalition's 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. After the election, the coalition announced that a Dutton government would support older Australians who chose to work more by doubling the amount of income that age pensioners and veteran service pensioners could earn without reducing pension payments. This would enable pensioners and relevant veteran entitlement recipients to earn up to $600 a fortnight work bonus and still receive the maximum amount of pension payment. This would benefit 80,000 age pensioners and up to 22,000 residents of Fisher—my electorate has the largest demographic. 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.

This coalition policy makes it further worthwhile for older Australians to pick up an extra shift or work extra hours and help small and regional businesses deal with labour shortages. Back then, the coalition called on the Albanese government to implement the policy immediately, to help relieve pressure on a very tight labour market. And all we got from the government was silence. It took the Jobs and Skills Summit to drag the Albanese government belatedly into this policy space. While welcoming the government's long overdue announcement of an increase in the work bonus income bank balance, we said it was too little, too late.

On 3 August Senator Dean Smith introduced a private senator's bill to give effect to the policy announced by the coalition. The bill also included extended qualification for pensioner concession cards and suspension of benefits and entitlements instead of cancellation, as per the bill introduced by the former government on 10 February. Additionally, in September, the coalition successfully amended other government social services legislation in the Senate to include the measures contained in Senator Smith's bill. This legislation is yet to return to the House of Representatives.

The first two schedules in this government bill replicate the measures in the coalition's bill introduced in February and in Senator Smith's bill. We take issue with the lesser financial incentive though. The government's alternative is a financial incentive less than the increase the coalition's policy would provide, and it's only a temporary measure, due to expire on 30 June 2023. So not only is it less than—half, in fact—what the coalition put forward only a couple of months ago; it is a temporary measure. That's why the coalition is calling on the government to increase the Work Bonus from $300 to $600 a fortnight to incentivise eligible pensioners. Increasing the amount pensioners can earn every fortnight will make a meaningful difference to household finances, and the coalition calls on the government to increase the fortnightly Work Bonus from $300 to $600 from 1 July and provide certainty by actually making it ongoing. By all means have a review, as is often the case in this place. Write into the legislation that, after 12 or 24 months of the operation of the act, a review could be undertaken to determine whether it's still necessary and whether it's still of utilitarian value. But at this stage we would suggest that this is something that we should be looking at continuing.

Now, whilst we will support this bill, with amendments, it demonstrates two things. Firstly, it demonstrates that this Labor government does not have a real plan to address the cost-of-living pressures faced by Australian families and their businesses. I talked a lot about that at the commencement of my speech. Secondly, even in opposition, the coalition is delivering for our most vulnerable, including our veteran community. It was the case with Veterans' Affairs reforms. It was the case with downsizing incentives and with PBS co-payments. When it comes to health care, social care, employment support and veterans' care, it has always been the coalition that has had a plan to support Australians in need. Meanwhile, Labor cut services in the regions. We saw that in the budget just a couple of weeks ago. They slashed progress made in first responder and veterans' mental health support. And, boy, I can't wait to get 15 minutes in the debate on the appropriations bill to talk about those two issues.

This is a government that is all talk and smoke and mirrors. We'll continue to hold them to account, backing good policy—which is usually our policy that they're copying—but we will fight them tooth and nail to ensure that Australian families and their businesses get the best out of this parliament, because they deserve nothing less.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I rise in support of this bill, the Social Services and Other Legislation Amendment (Workforce Incentive) Bill 2022. I'm pleased that the government has listened and chosen to amend the bill to extend the legislation to 31 December 2023. Previously, as we know, it was scheduled to end on 30 June 2023. For those of us in regional electorates, we also know that that, hopefully, gives us just one more harvest where we might incentivise pensioners and make it easier for them to potentially work in the harvest, because this is an incredibly difficult time of the year to get workers in regional Australia.

Providing incentives for older Australians to engage in additional work is a concept that I strongly support and one that I have advocated for, I think some could say, rather vigorously. On the first day of August this year, I moved a notice of motion calling on the government to introduce an opt-in scheme to increase the income test threshold for pensioners with limited savings as an incentive to engage in paid work. This was undertaken after receiving countless requests from constituents for changes and extensive consultation with National Seniors Australia. The message received was very simple, many people who are on the age pension want to work. They might not want to work full-time, but a couple who are travelling might want to do blocks of work. With Australia's unemployment rate historically low at just 3.5 per cent—it is the slowest rate, certainly, in my lifetime—we're effectively in full employment. This is a good thing, but it has created an increasingly tight labour market with high demand for engaging and retaining workers, particularly in the regions. When it's cherry season, when it's apple season, when it's strawberries season we need as many hands as we can possibly get. It becomes incredibly difficult for employers to find and attract staff.

On a weekly basis I am reminded by local businesses desperately looking for staff that this is not just in horticulture and agriculture, this also extends to the care sector as well. In Australia workforce participation rates for people aged 65 years and older are among the lowest in developed nations. We are currently at 14.2 per cent. This compares with the OECD average of 15.3 per cent. Sweden is 19 per cent. The United States is 19.4 per cent. Our New Zealand neighbour is 24.8 per cent, and that's really significant considering we're just across the ditch and yet our percentages are so different, our participation is so different.

Workforce participation among pensioners with limited savings is even lower at just three per cent. The data and anecdotal evidence strongly suggest there is an underutilised workforce available to us. However, older Australians are prematurely leaving critical sectors such as aged care, allied health, teaching and student support, because of the penalty associated with working and the consequence of a reduction in pension entitlements. A serious concern for pensioners is the anxiety and stress caused by dealing with Centrelink every fortnight. This is unnecessarily disincentivising pensioners and their engagement in the workforce.

According to the Australian Bureau of Statistics, there are 107,000 people aged 60 to 69 who are no longer in the labour force, not retired and not currently employed but wanting to work part-time. But they're not engaging because of the fear of having a debt, the fear of potentially receiving a letter saying, 'We're cutting off your pension.' I am sure many people in here have assisted older people with applying for the pension. This is not an easy process and it takes a long time, so their fear is very real and I understand that.

National Seniors Australia found, in their recent survey, that one in five pensioners would consider re-entering the workforce, and this was prior to the latest inflation and cost-of-living increases. Recent increases to power prices, the projected inflation and the even greater power costs will substantially impact the budgets of all Australians, and particularly pensioners who now have even less money to dispose of.

This bill will give those pensioners who want to work the opportunity to do so without unfair financial penalty. This is so good for regional Australia.

I was hoping that the government would lift the threshold even more because, when older people are travelling around Australia, they're often in their caravan and so they're staying in our regions for a considerable period of time and many of them do want to work. I know that when they do work, whether on mango farms or in the care sector or helping out in the schools, they have the qualifications and they have the knowledge. I just don't think we utilise this wonderful workforce, this wonderful group of people who want to work. The best thing about the region is, if they're saying for months at a time in a particular region—maybe down in my electorate or up in Queensland or over in WA—they spend more of their money back in the region, so they're helping to grow the local economy.

This bill, while I do support it, I think it could go much further. I guess I'm flagging that my advocacy will not stop here. I'm also flagging that I will be supporting the opposition's amendments because I think they're very sensible amendments. We really want to make it as easy as possible for older Australians who still want to be connected to the workforce to be part of helping to remedy the great challenges we're having with respect to workforce shortages at the moment. I'm pleased to support this bill and very pleased that crossbench initiatives such as this are taken up by the government.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

The Social Security and Other Legislation Amendment (Workforce Incentive) Bill 2022 delivers one of the government's commitments to address Australia's market challenges through practical and targeted solutions consistent with its announcement at the Jobs and Skills Summit in early September. It strengthens existing incentives for people over age pension age to take up work or increase the number of hours they work, if they wish to do so. At present only around three per cent of age pensioners earn income from employment. By providing incentives and increasing opportunities to work more without penalty, even a marginal increase in the number of older Australians in work will benefit individuals and businesses.

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. Pensioners are able to earn an amount of income before their pensions begin to be reduced in the income-free area. For each dollar of income over the income free-area, the single pension is reduced by 50c. For couples, each individual pension is reduced by 25c a fortnight for each dollar of income the couple has earned over the income-free area. In addition, the work bonus allows pensioners over age pension age to earn an extra $300 per fortnight from work before the income test is applied. A combination of the income-free area and work bonus means a single age pensioner with no other income could earn up to $490 per fortnight from work before their payment begins to reduce.

I've listened to many of the speakers this evening on this legislation and the amendment, and I think some important points have been made. I note the member for Mayo referenced retired teachers in this space and I see them as potentially quite useful in schools, given the current staff shortages. Particularly, as it's my background, I would make the suggestion that highly skilled teachers who have retired might return to fill some of the chronic shortages we have around literacy and numeracy specialists. They might find work in a situation with a very small group of students or even one-on-one in a mentoring or coaching role. It would be good to have that kind of experience and knowledge and the years and years built up around literacy learning back in schools—not necessarily on a full teaching day because I don't know that even I could return to a full teaching load, at my young age! A full teaching load is extraordinarily stressful. In a high school you could potentially have 300 students across that week, so when it comes to report writing that means you're going to write 300 reports. There's a good reason why lots of teachers take time out of schools earlier than workers in other industries perhaps. But this would give us an opportunity to bring people back into those specialist roles in schools, potentially, and bring back their expertise, their insight and their many, many years of looking at ways to support students to make those next steps in literacy and numeracy which are critical in our schools. So, I can see this really working in that profession.

And I assume there are many other areas where someone on an age pension might relatively return to the workforce. Of course, I by no means would support the notion that this would mean we'd have age pensioners climbing trees. I think that would be very short-sighted in terms of people's physical capacities. I'm also of a mind to think carefully about those people who've worked in hard manual labour all their lives. I wouldn't want to create an expectation that they would return to hard manual labour past retirement. They might, however, find other work for those hours a week that they chose to and to create incentives where that might be possible. Some of the changes of late, whereby workplaces are more open to people working from home, might also suit some people who are wanting to take up these incentives.

The bill has two key policies that are designed to incentivise pensioners to take up work if they wish to do so. The first is temporarily increasing the work bonus income bank. The government has listened to the concerns of key community stakeholders and our parliamentary colleagues in this place and the Senate that seven months is not enough time to assess the effectiveness of this policy change. Today the government has amended the bill so that a temporary increase to the work bonus income bank would cease on 31 December 2023. This extension results in a minor increase in the cost of the measure of around $2.5 million.

I think with this measure, which came out of the Jobs and Skills Summit, the government is meeting the commitments it has made. We're hoping that, for pensioners who want to take up this opportunity, this bill will support them more readily to do so and will make the difference in terms of when they go over the incentive limits—that the bill actually shapes that so that it's less punitive for people and works in a way such that they might re-engage with the age pension if they get beyond the income point where they lose the pension. So, thought has been put into ensuring that this bill allows people on the age pension to re-engage in the workforce or to continue to work, to take up hours in the workforce and not be punished financially, through their pension. It's a bill that's thoughtful. It's a bill that allows the best of both worlds. As I said, the proportion of people on the age pension who are currently doing the hours of work is at three per cent, and some increase in that could potentially be expected with these incentives in place.

It is a hallmark of this new government that we are prepared to listen, that we are prepared to take things on board. That was seen in the Jobs and Skills Summit, where this first came up. The Jobs and Skills Summit created a space where many people gathered to share ideas about how we could best deal with the jobs and skills shortage. One of the responses can be seen in this bill, but obviously many other ideas came out of the summit.

The consultation with community stakeholders has been quite detailed, and this government and this minister have listened intently to the ideas coming from others. That means that recipients of the age pension and certain veterans' entitlements who have employment income and whose payments are suspended because their income is too high will also keep their pensioner concession card for up to two years. This is an important point, because losing that pensioner concession card would be an absolute disincentive because, often, as we heard the member for Dobell say earlier, ageing comes with an increase in health costs. So keeping that concession card for a two-year period is something that's very thoughtful in this bill.

I would like to thank the minister for her work in making sure that this bill supports pensioners and supports them in thoughtful ways by ensuring that, if they do choose to take up work or increase the hours that they're working, the impact of that has been considered and things have been put in place in this bill to ensure that they are not negatively impacted.

Amanda Rishworth (Kingston, Australian Labor Party, Minister for Social Services) Share this | Link to this | Hansard source

In summing up, I'd like to thank all members who have been part of this debate today. I think this has been a very constructive debate in which people have clearly indicated a common desire—that is, to support our pensioners to be able to work more, particularly at a time when we've heard that, right across the country, there are skill shortages, and those skill shortages in some places are quite acute. That is why the government has put forward this bill. It does deliver on one of the government's commitments: to address Australia's labour market challenge through practical and targeted solutions.

This was, as I said, an issue that came up at the Jobs and Skills Summit early in September. The Jobs and Skills Summit was a particularly important gathering in which we were able to examine a range of different solutions, and this is one of the solutions because it strengthens the existing incentive for people over age pension age to take up work or to increase the number of hours they work if they wish to do so.

The bill also provides that age pensioners and those receiving equivalent Department of Veterans' Affairs payments will no longer have their pension cancelled after 12 weeks if their income, where it includes some income from employment, exceeds the income limit. Instead, their payments will be suspended for up to two years. An abridged reapplication process will be made available to them should their income no longer preclude them from those payments.

Pensioners whose payments are suspended will keep their concession card for two years, instead of it being cancelled after 12 weeks. So they will retain access to a range of benefits, including cheaper prescription medication. Certainly, in my time recently as the Minister for Social Services, I know that being able to keep that pensioner concession card is really important—being able to retain this and the range of benefits. It's not only Commonwealth benefits; of course, the benefits that the state governments have to offer are really important.

The benefits of this measure also extend to partners of age pensioners, disability support pensioners and equivalent veterans payment recipients, as long as their partner is also receiving the age pension. This measure will strengthen the incentive for older Australians to work, so it is critically important.

I would say at this point that, quite obviously, the government won't be supporting the second reading amendment moved by the opposition. We believe that the proposal that we are putting forward is the right proposal for the right time. This is a time limited proposal, particularly in the area of workforce shortages, when there is an acute need for labour, and we want to provide that upfront income bank to really give that a boost right now. But I foreshadow that we will be moving a government amendment in this place in the consideration in detail stage, which is likely going to happen tomorrow. This is as a result, really, of us listening to the concerns of many in this place. I do note the member for Mayo and the member for Kooyong, as well as Senator Rice in the other place, who did make the point around the length of time. I will be talking to that amendment, but I do foreshadow an amendment in consideration in detail that will provide for this Work Bonus incentive to be extended and be available for 12 months.

This is the way the government has listened and has found what I think is a good, sensible amendment that we will move in consideration in detail, but we won't be supporting the opposition second reading amendment. It doesn't fit with our policy. Neither will we be supporting the Green's second reading amendment, while very noble, to increase the rate of all income support recipients. It's not something that we will be supporting as part of this bill. This is really a sensible proposal, because, of course, at present, only around three per cent of age pensioners earn income from employment, but by providing this incentive and by increasing opportunities to work—even this most marginal increase—a number of older Australians will benefit. Obviously, individuals benefit. I was having a brief conversation with the member for Mayo, who was talking about the great outcomes that happen. My mother, indeed, retired only last year. I probably don't want to give her age away in this place, but she definitely saw the benefit of working after retirement age. So this is an important piece of legislation, and we look forward to voting on this tomorrow. I know that we won't have a vote until tomorrow morning.

In regard to the proposal before us, we have amended the bill, as I said, to have a temporary increase to the Work Bonus. We foreshadow the amendment for that bank, which will cease on 31 December 2023. This extension results in a minor increase to the cost—around $2.5 million over the year—but all of us, I'm sure, will be focused on making sure that pensioners will be communicated with about this. This increase in their income bank is really important because it will allow for that flexibility as well in that upfront bonus.

This is, I think, a really important bill. In addition to keeping the card, this does provides it upfront. I do want to talk a little bit about the benefits of that Work Bonus income bank upfront, because one of the constraints in having an increase in how much you can earn on a fortnightly basis is that it doesn't perhaps take into account some of the seasonal aspects of work. I really like the Father Christmas example. That is a very intense amount of work in a short period of the year, and, of course, without the income bank flexibility, you wouldn't necessarily get to do that sort of intermittent work over the years. That's where I think the bank is particularly important. It will be, as I said, provided upfront, so if pensioners have been waiting and it has been a disincentive for their pension, there will be a real opportunity now, as soon as this bill gets royal assent, for them to be able to go out there and take up those work opportunities.

This complements a range of measures that we have put in place to support senior Australians through our seniors pensioner card, which really came into effect, and I would encourage senior Australians who may not have been eligible before to get on that website and see if they're eligible. This is just another plank in this government's proposal to make the lives of our pensioners and seniors better.

Debate interrupted.