The great unretirement
New figures show nearly half of labour market additions are 55-plus, as older workers make the most of improved job flexibility and favourable workplace conditions.
Key Points
- 40 per cent of people who entered the labour force over the last three years are 55-plus.
- National Seniors Let Pensioners Work campaign to stop penalising pensioners for working wins results.
- Pensioners now can earn up to $11,800 before losing any pension.
The latest labour force figures should encourage over-50s who want to delay their retirement to keep working or return to the workforce and earn more for their retirement.
Demographers are stunned that 40 per cent of the nearly half a million people who entered the labour force over the three years to October were over the age of 55.
That means that nationally, almost one in five of all workers, or 19.6 per cent, are now aged over 55, up from just 11.4 per cent two decades ago.
KPMG urban economist Terry Rawnsley says the trend of older workers returning to paid work has been accelerated by improved job flexibility and limited travel opportunities over the past few years.
Mr Rawnsley says the trend was well under way before record-high inflation and cost of living pressures emerged this year. But if those economic pressures continued, he said, there could be an even bigger rise in older people going back to work to make ends meet.
“Our labour market is continuing to go gangbusters,” said Mr Rawnsley. “What we are seeing is a great unretirement, primarily driven by more favourable workplace conditions.”
National Seniors Australia is championing the move for more older Australians in the workforce. Our Let Pensioners Work campaign aims to stop Age Pensioners from having their pension payments cut because they work.
Our petition calls on the federal government to exempt employment income from the Age Pension income test, so pensioners with limited wealth can work without losing their pension and help meet critical labour force shortages. You can sign our petition at the National Seniors Australia website. Our Chief Advocate, Ian Henschke, warns that Australia is facing a workforce crisis with severe shortages of workers, particularly in healthcare and aged care.
He says efforts to boost participation are crucial and should include dumping the current punitive rate at which the pension is cut for more than one day’s paid work a week.
“Australia needs to see a lift in its productivity growth and its participation rates,” Mr Henschke said. “In particular, mature-age participation can play a key role in tipping the balance between the number of future retirees and the number of workers available to support them.”
He said an extra three percentage points increase in participation among workers aged 55 and over would result in a $33 billion boost to the national economy, equivalent to about 1.6 per cent of national income.
After pressure from our Let Pensioners Work campaign, the government announced an increase in the Work Bonus limit of $4,000 until June 2023. This was extended to December 2023 after further National Seniors advocacy. This means pensioners can earn up to $11,800 before losing any pension.
KPMG’s Terry Rawnsley says the pandemic has had a lot to do with seniors working more.
“For people who thought they might retire and travel around Australia, or travel abroad, that option was no longer on the table through the height of the pandemic, so many chose to simply keep working,” he said.
“The fact that workplaces have become more flexible in what has been a tight labour market, with working from home options readily available and more flexible working hours, seems to have made older Australians less inclined to retire, too.”
The Age reports Australia’s unemployment rate was 3.4 per cent in November 2022, the lowest in 48 years, with a labour force participation rate – measuring the proportion of the working-age population either working or actively looking for a job – at 66.8 per cent, the highest on record.
For further reading: The Age
