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Monday, 18 June 2018
Page: 3060

Pensions and Benefits

Senator BROCKMAN (Western Australia) (14:43): My question is to the Minister representing the Minister for Social Services, Senator Fierravanti-Wells. Could the minister outline how the Turnbull government is providing more choice in retirement, particularly for age pension recipients?

Senator FIERRAVANTI-WELLS (New South WalesMinister for International Development and the Pacific) (14:44): I thank Senator Brockman for his question and interest in this important subject. It's a very good question, Senator Brockman, because in this year's budget the Turnbull government announced $258.6 million in initiatives to support the incomes of those in retirement. This includes new means test rules for pooled lifetime retirement income stream products as well as an increase in and extension of the pension work bonus and an expansion of the Pension Loans Scheme.

Senator Brockman asked me about more choice, and I'd particularly like to focus on the pension work bonus. This is an important measure which will deliver older Australians more choice in their retirement. With this change, the coalition is improving the pension work bonus by increasing the work bonus by $50 a fortnight to $300 a fortnight. This means that the first $300 of employment income each fortnight will not be counted in the pension income test and it means that eligible pensioners will get more benefit from working.

The current pension work bonus was set at $250 per fortnight when it was introduced in 2011 and has not been increased since. I'm advised that, under this measure, about 88,750 social security pensioners and 1,000 allowance recipients will receive an increase in their payments from 1 July 2019 and about 1,150 people will become eligible for the social security pension for the first time. Around 3,000 Veterans' Affairs pensioners will also benefit.

But it's not only older Australians who benefit by their participation in the workforce, as the Council on the Ageing noted— (Time expired)

The PRESIDENT: Senator Brockman, a supplementary question.

Senator BROCKMAN (Western Australia) (14:46): Minister, how does the pension work bonus assist people in regional areas, particularly during seasonal employment?

Senator FIERRAVANTI-WELLS (New South WalesMinister for International Development and the Pacific) (14:46): The Turnbull government's changes to the pension work bonus will be of great interest, especially to older Australians in regional areas. In addition to the changes to the income limit, the accrual amount will increase to a maximum of $7,800, up from $6,500. This will mean that people in regional areas, if they are working in industries that are seasonal, will be able to bank up any unused part of the fortnightly $300 and accrue it and exempt future earnings. Not only is this good news for people in seasonal rural industries; it is great news for older Australians, who might be able to more fully take advantage of opportunities during retail peaks like Christmas and Easter.

As I was saying in relation to COTA, it has said to fight ageism in the workforce we should:

… tap into the experience of older Australians and provide financial flexibility in retirement—

(Time expired)

The PRESIDENT: Senator Brockman, a final supplementary question.

Senator BROCKMAN (Western Australia) (14:47): Minister, how will people who are self-employed benefit from this change?

Senator Cameron interjecting

Senator FIERRAVANTI-WELLS (New South WalesMinister for International Development and the Pacific) (14:47): I'll take the interjection from Senator Cameron—at least we're looking after pensioners, not like what you want to do with your hand in the old pocket. Those people have worked very, very hard for their retirement and you want to go in there and take the money out of their pockets.

Opposition senators interjecting

Senator FIERRAVANTI-WELLS: Yes, tell us about it! As for self-employed people, the good news is that our budget measures will extend the work bonus to include earnings from self-employment. Extending the work bonus to the self-employed will improve the consistency and equity of work bonus arrangements. This change will benefit, for the first time, pensioners of age pension age who currently receive the maximum rate and cannot access the existing scheme. It is fair that self-employed pensioners who earn income from actual engagement in gainful work should be able to access the work bonus in the same manner as other pensioners who work.