One in five retirees want to work – and it could help solve staffing shortages

Allowing retirees to re-enter the workforce could empower the cohort and solve the staff shortage crisis as 30,000 retail jobs remain unfilled across Australia, according to the industry association.

The Australian Retailers Association (ARA) is calling on the next government to exempt employment income from the age pension income test so that more retirees can fill critical gaps in workers.

Under current law, Australians who receive the pension can only work a minimum amount before their earnings are subject to steep penalties: for every dollar earned above the $480 threshold, there is a reduction of 50 cents on fortnightly board.

Pension income is also taxable.

As a result, only 2.9% of Australian pensioners (or 74,000 out of 2.6 million) receive employment income, but more might feel encouraged to take up work if they knew their pension payments would not be grabbed by their salary, ARA CEO Paul Zahra said.

“It offers retirees the opportunity to supplement their incomes if they wish, retailers to have access to a workforce willing and able to help in the face of a pervasive labor shortage, and to the wider economy with a more empowered retirement group that will be mobilized to spend on new employment opportunities”.

Zahra’s appeal was echoed by National Seniors Australia (NSA) chief counsel Ian Henschke, who has long advocated for pensioners as a solution to the labor shortage.

The NSA surveyed 4,000 older retirees and found that one in five would consider returning to paid work after retirement, while 16% have already done so, citing mostly financial worries.

But, adds Zahra, many retirees want to return to work out of a sense of duty and social responsibility. They are a critical group that is so often overlooked by society, he says.

If the threshold were to change, Zahra says existing training programs would quickly train people returning to the retail workforce. Indeed, he says that several of the nation’s largest retail employers have already committed to developing their staff.

The workforce could be completely different in a few months, Zahra says, especially amid the trickle of overseas workers and students returning to Australia in a post-pandemic world.

Unemployment remained at 4% in March, and the Reserve Bank of Australia and the Treasury are confident it will reduce to 3.75% later this year – a 50-year low, according to Treasurer Josh Frydenberg during the handover from the March budget – but vacancies in several industries are at an all-time high.

“We’ve been in the tightest job market for over 50 years and without the usual numbers of international workers and students, these gaps will not be filled by traditional recruitment methods,” he said.

“Retail has always been a very diverse employment sector and we need to think more creatively about how we can engage new segments of our Australian workforce, such as mature workers. and retirees.

Zahra said the next government formed after Saturday’s election should view the older cohort as a generation waiting to be unlocked in an economy that desperately needs them.

“We cannot have an economic recovery without a retail recovery and skills shortages as well as supply chain challenges are huge constraints on this segment of our economy,” he said. .

“So far, no one-size-fits-all solution has been suggested, leaving a significant gap in productivity and growth for an already stressed workforce.”