More to give: Why some older Australians want to work
Australia is a poor performer when it comes to participation by older people in the workforce. We investigate what is stopping more seniors from doing jobs they love and what action needs to be taken to make sure people aren’t penalised for working later in life.
Did you know that Australia has one of the lowest workforce participation rates globally when it comes to mature age workers? According to OECD statistics, just 14.2 per cent of those over 65 and over are in the labour market. 1 While this is a significant increase on the 9 per cent of over 65s that were working in the mid-2000s, it compares to 19.4 per cent in the US, 24.8 per cent in New Zealand and 25.5 per cent in Japan. Just 84,000, or 3.4 per cent of the 2.6 million older Australians who receive the age pension have reported income from employment, according to Department of Social Services statistics. 2 This is because Australia’s social security system means that it’s difficult to work even part time and still receive the pension, as well as associated benefits such as the pensioner concession card. Pensioners can earn just $300 a fortnight in employment related income before it starts to affect their payments. 3 National Seniors Australia Chief Advocate Ian Henschke, who is calling for better income exemptions to encourage older people to work later in life, says this can mean even those with small amounts of savings who could use the extra cash will give up work so they don’t lose their pension. National Seniors has pointed out that in countries such as New Zealand with higher mature age worker participation rates, pensioners are not penalized for earning extra income if it comes from work.
“A targeted exemption will encourage the thousands of retirees who have little additional income to get back into the workforce to boost the economy and their own incomes,” Mr Henschke said in December last year. “This should be done as a two-year trial while we lack workers from overseas to test how effective it is.” 4 Being able to work more hours for longer could result in a larger number of retirees becoming financially secure and independent. According to 2017 ABS figures, less than 40 per cent of workers in their 40s believed they would be financially secure enough to fully retire age 65. 5 There are also social issues for seniors to contend with if they wish to remain in the workforce as they get older. About 30 per cent of Australians reported experiencing age-related discrimination at their job or while seeking a job, according to a 2017 study by the University of South Australia. 6 Australia’s pre COVID-19 employment figures showed a 28 per cent jump in the number of over 65s that were unemployed between 2018 and 2019. At the time, Mr Henschke commented that older Australians were facing blatant bias when trying to apply for jobs. “People find if they don’t put their age on an application they can get an interview but if they do they miss out,” he said. 7
6 • Viewpoint Edition 2 2022
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