Working pensioners need more ‘choice and control’, says HESTA

Despite an increase to the payment rate for the Age Pension coming into effect over the weekend, HESTA has maintained its calls to reduce income test and work bonus threshold barriers in support of retirement-aged members of the workforce.

In addition to recent research from the super fund that found older Australians receiving the Age Pension are disincentivised from returning to or continuing in the workforce due to effective marginal tax rates of 60 to 80 per cent, a new member survey reveals retirements are primarily funded by superannuation and supported by a combination of the Age Pension (43 per cent), employment income and household savings.

“While this increase will help ease cost-of-living pressures, our research shows significant barriers remain for pensioners who want to continue contributing to the workforce,” HESTA chief executive, Debby Blakey, said.

“The current system hasn’t kept pace with this modern reality of retirement, and doesn’t effectively support retirees who want to continue contributing to their communities and the economy.

“We continue to call for the Work Bonus payments thresholds to be indexed to Average Weekly Ordinary Time Earnings (AWOTE). This isn’t just about allowing retirees to work without facing extreme effective tax rates, it’s about recognising and supporting the various ways people want to experience their retirement years.”

The member survey also confirmed the top reasons why retirees re-entered the workforce, which was also recently highlighted by UniSuper research released in August, mainly revolved around maintaining social interaction (28 per cent), alleviating financial pressure (26 per cent), and gaining fulfillment and purpose (23 per cent).

“Our research shows that retirement today is deeply personal and multifaceted. People are seeking social interaction, purpose, and fulfilment through work, as well as financial benefits,” Blakey said.

“Many of our members want to continue making valuable contributions to the health and community services sector, bringing decades of experience and mentoring capabilities that are invaluable in addressing workforce shortages.”