You are an aged pensioner and you want to work for cash and a sense of purpose. The ATO says no.
The Age Pension from age 67 is $620 a week for a single person and for couples it is $466 each per week. That is not a lot.
Most of us at age 67 are still active with the prospect of up to another 20 years to live. What happens to your pension if you want to do some part-time work for the cash and to have a purpose?
A new report by the superannuation fund Hester says you will start paying tax once you earn just over $13,000 a year, especially if you have superannuation, even a small amount like $200,000.
The chart below shows that you can quickly hit an effective marginal tax rate of 77%.
“It’s sending a very bad message that you are penalised for working in retirement if you are on the Age Pension, and I think we need to change that,” Hesta chief executive Debby Blakey said.
“We have about 4.5 million retirees, and we know there’s a wave coming – more than 2.5 million Australians expect to retire over the next decade,” Ms Blakey said.
“Retirement is changing and we should expect that many senior Australians would want to work. Often working part-time or casually is good for their wellbeing, it’s obviously good for their bank account, and it’s also good for the economy and our community.”
To our mind, at Monday Club, what the government is doing is relegating 2.5 million pensioners to 15 to 20 years of lower quality of life. Pensioners are being prevented from earning extra cash to give them a better standard of living and the opportunity to stay active in the wider community, with work colleagues and purpose.
It is a dumb policy.
