Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I table an explanatory memorandum relating to the bill and I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Australian economy is grappling with inflationary pressures and many industries continue to suffer severe labour shortages following the COVID-19 pandemic, particularly in regional areas.

At the same time, those older Australians and veterans wanting to improve their living standard by working, or increasing their hours of work, are being actively discouraged from doing so by existing pension regulations.

In a period of economic uncertainty and rapidly rising living costs, each represents a practical solution to the other.

The Social Services Legislation Amendment (Enhancing Pensioner and Veteran Workforce Participation) Bill 2022 reinvigorates, and builds upon, the initiatives contained in the Social Services Legislation Amendment (Workforce Incentive) Bill 2022.

Reflecting the targeted, well-designed policy being pursued by the coalition to address current economic conditions, the bill makes workforce involvement as attractive and worthwhile as possible for Australian pensioners.

Around 80,000 age pension recipients are employed at present, or around three per cent of Australia's 2.5 million pensioners.

They make a vital contribution to the economy, passing on experienced knowledge and skills, and may already live or work in a town, or region, that is struggling to meet its labour needs.

The extra income received by working pensioners means they are better able to support themselves and their dependants in the face of increasing food, fuel and other living expenses.

In addition, they enjoy enhanced social connectiveness, mental and physical activity, and other non-financial benefits that a host of publicly funded programs are otherwise required to deliver.

Pensioners can currently earn $300 income per fortnight and still receive a maximum pension payment.

The bill doubles the Age and Veteran Service Pension Work Bonus Scheme, the amount that can be earned without impacting pension payments, increasing it to $600 per fortnight, or $1,200 for a couple.

Working pensioners will also continue to accrue unused work bonus scheme income up to a $7,800 cap, exempting future earnings for pension income test purposes.

Increasing the amount pensioners can earn every fortnight so significantly has the potential to make a meaningful difference to their household finances.

Crucially, it also makes the prospect of returning to work, or working additional hours, an economically viable option where it previously has not been.

Like its predecessor, the Social Services Legislation Amendment (Workforce Incentive) Bill 2022, the bill also removes other disincentives for working pensioners and provides them greater flexibility.

Current policy dictates that age pensions are cancelled where a recipient's total income exceeds the income test for a 12-week period, with pensioner concession card (PCC) access subject to the same test and timeframe.

This acts as a barrier to those working pensioners who want to avoid losing their pension or PCC, whose work might last for varying periods, or who are deterred by the requirement to complete a full new application every time they become eligible for the pension.

Under the bill, their pension will be suspended for up to two years instead, during which time they undergo a simplified process to resume the pension if their income falls to the prescribed level.

Both age and disability support pensioners will be able to keep their PCC for two years under these circumstances, as an acknowledgement of the enormous importance of the concessions the PCC offers working pensioners.

Pensioner partners of working pensioners will also enjoy the same pension resumption and PCC arrangements for a two-year period.

The policy changes outlined in the bill align with calls to encourage and support working pensioners from advocacy and industry organisations, including COTA and National Seniors Australia.

Opposition Leader Peter Dutton announced the work bonus scheme component of the bill in June of 2022, stating that older Australians should keep more of what they earn, and that it was needed to relieve pressure on a very tight labour market.

Both these justifications are, in fact, more pressingly true now than they were then.

The bill is good for our pensioners, it is good for our economy, and it is good for Australia.

I commend it to the Senate.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.