Older Australians encouraged to remain in the workforce
The Minister for Family and Community Services, Senator Kay Patterson, has reaffirmed the Australian Government’s commitment to encouraging older Australians to continue participating in the workforce under its Pension Bonus Scheme.
Senator Patterson said she was investigating improving the scheme to ensure it is flexible and more appropriate to the life style choices made by Australian’s of age pension age.
Some of the changes being considered include:
- Expanding eligibility for the scheme to include people who are claiming the age pension or other income support payments but choose to return to work.
- Extending the time allowed for people to temporarily defer from the Scheme due to illness or other circumstances.
- Relaxing the 13-week claim period. Currently those that claim outside the 13 week timeframe lose the opportunity to receive a Pension Bonus.
- Allowing bonus recipients to bequeath a proportion of the bonus to their estate.
Senator Patterson said: “The Howard Government is continually working to ensure that Australian’s of age pension age are aware of this scheme and, to this end, a communication and education campaign is being developed.
“Approximately one-fifth of people over the age pension age who are working are registered in the Pension Bonus Scheme.
“A total of 7,407 bonuses were paid in 2003-04, an increase of 31 per cent over the previous financial year.
“The average amount of bonus paid in 2003-04 was $11,324, an increase of 53 per cent over the previous year.
“This amount is a lump sum tax-free bonus to those people of age pension age choosing to remain in the workforce.”
Registered members of the Scheme who receive maximum age pension after participating in the scheme for the full five years would, on current Age Pension rates, receive a tax-free bonus of over $28,000 if single or over $23,000 if a partnered person.
This tax-free bonus is considerable when you compare it against the fact that people in receipt of maximum rate pension average around $31,000 in personal savings.
“This means that after 5 years of participating in the Scheme, these pensioners can nearly double their lifetime personal savings,” Senator Patterson said.
This initiative builds on the Prime Minister’s recent comments promoting greater participation in the workforce and provides significant support and opportunity for mature age workers wishing to make the choice of continued participation after reaching age pension age.