Residents who enter retirement living, be it in a village or an independent living unit, face many impediments if they want to return to the workforce as many need to.  

The Super Members Council of Australia, a lobby group, argues the ban on receiving contributions into retirement-phase super accounts, penalises those dipping back into the workforce later in life.

The group is now calling on the Federal Government to lift the rule that forces working retirees to open a separate accumulation account to receive super contributions.

Under the current rule, working retirees then pay two sets of account fees and are often slugged with more taxes. The organisation estimates about 100,000 current retirees would benefit from the rule change on contributions in decumulation accounts.

Late in 2023, the Federal Government increased the amount a retiree can earn per year from work before losing part of their Pension by $4,000 on an ongoing basis. Treasurer Jim Chalmers headlined the announcement: Getting more Australians back into work.

The policy change meant pensioners could earn $227 per week from work without harming their Pension, up from $150.

AustralianSuper states as many as 20% of members who receive a Pension from their super savings are still in paid work. 

“Our research shows that this trend has increased with the cost of living and increases in the cash rate. There is also a clear trend of members aged 60 and over recommencing contributions to their superannuation accounts after a period of non-contribution,” the fund wrote.

Uncertainty among retirees and pre-retirees about funding their later years leads many to stay in accumulation accounts rather than transition to retirement settings, if they believe they may re-enter the workforce at some stage.

This decision to remain in accumulation phase means members are potentially missing out on higher returns provided by a tax-free retirement account, according to AustralianSuper.