Age pensioners say system punishes them for wanting to keep working


ABC News
October 26 2026

Peter Gibney, 71, works at a supermarket south of Brisbane. 

In short:
Australians who receive the age pension face strict income limits before the pension is reduced.

Some pensioners want to be able to keep working for social, health and economic reasons.   

Advocates and industry groups are supportive of relaxing some the rules to unlock older Australians' participation in the workforce.


As Australia's population ages, it is expected more people will want to continue working beyond retirement age, whether for financial reasons or otherwise.   

It has prompted renewed calls from advocates and industry groups to relax the rules around working on the age pension, which some say unfairly punishes them.

South-east Queensland 71-year-old Peter Gibney would go as far as to say the system is stacked up against he and his wife continuing to work.

Having worked in retail for decades, he is not interested in slowing down.

"There's none of this airy, fairy stuff ... it's down on the ground dealing with customers and staff, training staff and getting the load done," he said.

an older man in a supermarket uniform
Mr Gibney believes the age pension should not be reduced because a person chooses to continue to work.

Despite his enthusiasm for his job, Mr Gibney feels he is being unfairly punished. Both he and his wife, who works as a teacher's aide, receive part age pensions.

However, the more they work, the more of their age pensions they lose.

Without large superannuation balances, and with a mortgage, giving up work is something they also cannot afford to do right now.

an older man in a supermarket uniform looks at the fruit
Mr Gibney says work is also important for his emotional and mental wellbeing.

Bringing in some extra money gives them additional financial security.

"It is freedom, to a degree. The downside is that it's stacked against us doing those things," Mr Gibney said.

an older man looks at some bills and paperwork
Mr Gibney thinks the system is "stacked" against him continuing to work.

Complex rules around pension and work
A spokesperson for the Department of Social Services said the current rules around working on the age pension mean a single pensioner with no other income can earn up to $526 a fortnight before the pension begins to reduce.

That's because of a system called the work bonus, where the first $300 of work income a fortnight is disregarded from the income test.

A couple with no other income can earn a combined $996 a fortnight if both are eligible for the work bonus.

a woman in a blue blazer
Patricia Sparrow is the chief executive of the Council on the Ageing Australia, the peak body for older Australians.

Council on the Ageing (COTA) Australia chief executive Patricia Sparrow has called for that system to be "simplified".

The Department of Social Services said age pensioners who work keep more of their age pension now than four years ago.

A department spokesperson said the government is committed to reviewing the rate of social services payments in each budget.

There are overseas examples to look to. New Zealand has a system where the pension (NZ Super) is paid on a universal rate.

Mr Gibney believes "the ideal situation would be the old age pension is for achieving an age ... it's payback for 40, 50 years of paying taxes".

an older supermarket worker smiles at a colleague
The peak body for older Australians believes more people will want to continue working as the population ages and retirement changes. 

More older Australians expected to keep working
According to COTA's latest state of the older nation report, about 15 per cent of Australians aged over 67 continue to work, up from 11 per cent in 2021.

Almost 25 per cent are not opposed to returning to work in some capacity.

Digital divide widening
An older woman using a smartphone looking at a travel website
The digital divide means the responsibility is falling to loved ones, neighbours, and retirement village staff to bridge the gap for older Australians.

As the population ages, and more people begin to retire with mortgages or without a partner, those numbers are expected to rise.

"We're really urging government to look at the things we need to do right across the system to make sure that older people can continue to support themselves, contribute to the community," she said.

Ms Sparrow said one of the main barriers keeping older Australians out of work is age discrimination, an issue she said needed to be addressed to ensure fair workforce participation.

Industry groups also want to unlock an older workforce to help boost productivity.

man with grey hair and glasses in a suit
Andrew McKellar is the chief executive of the Australian Chamber of Commerce and Industry.

Productivity benefits touted
Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar said more needed to be done to encourage older Australians who want to continue to be able to work without them facing a "significant" penalty.

ACCI advocates for a "more flexible" system and a doubling of the work bonus to $600 a fortnight.

Even now when people get to pension age of 67, they want people to keep working.  It would be very good for productivity they say, but maybe not so good for your back.