Retirement isn’t always a full stop to earning income. Plenty of older Australians keep working — some for financial reasons, others for social connection, personal fulfilment, or simply because they enjoy it.
But how does paid work affect the Age Pension? That’s where things can get confusing. The current system is often criticised for being complex and, at times, discouraging older people from staying in the workforce.
Government reports have recognised both the opportunities and the barriers to this employment. The 2023 Intergenerational Report highlights that older Australians are healthier, living longer, and increasingly participating in paid work. Meanwhile, the 2021 Retirement Income Review acknowledged that the complexity of Age Pension settings and frequent policy changes can create uncertainty and erode confidence in working and contributing to the superannuation system.
Advocates such as the Actuaries Institute and National Seniors Australia have called for simpler rules — or even a universal pension. But if and until that happens, it’s worth understanding how the system currently works, especially if you’re considering earning some extra income.