Neil Mitchell is calling on the federal government to ditch work penalties for pensioners in a bid to ease pressure on businesses struggling to find staff.

Currently, pensioners can only earn up to $240 a week without having their pension reduced.

Pensioner workforce participation in Australia is three per cent, while in New Zealand, where there’s no work penalty, 24 per cent of pensioners are in the workforce.

Neil Mitchell says there’s a “real crisis” unfolding in business, and it’s time to “unleash the hidden army”.

“I’ve spoken to several businesses over the past week struggling,” the 3AW Mornings host said.

“Some have closed temporarily, don’t know when they’re going to reopen because they can’t get staff. Others have cut back the hours they open, others have cut back the products they provide.

“It is a real crisis. They’re coming out of lockdown restrictions and they can’t open because they don’t have staff.

“The federal government must stop punishing pensioners and retirees for working. Let pensioners, part pensioners even, let them earn real money as casual workers in these desperate industries, and don’t cut their pension for doing that.

“There are nearly four million retirees in this country on part or full pensions. There are 2.6 million on the aged pension — that is 62 per cent of the population over the age of 65. It is a huge resource which we should exploit — a hidden army.”

Neil says “everybody wins” from the idea.

“The government gets tax from their earnings but doesn’t pay out any more than it does is now, and industries get workers. I mean, why not?”

Press PLAY below to hear about the idea Neil Mitchell thinks is a win-win

Chief advocate with National Seniors Australia, Ian Henschke, says the idea was put to the federal government after the last election.

“We actually wrote this policy by the way and put it into the retirement income review after the last election, so Josh Frydenberg has had this in his homework for three years,” he told Neil Mitchell.

“When these people work – have a guess what they do? They pay income tax.

“This is a clunky, antiquated pension system that needs to be changed.”

Press PLAY below to hear what National Seniors Australia is campaigning for

CEO of Restaurant and Catering Australia, Wes Lambert, says Victoria’s hospitality industry is missing almost 30,000 workers.

“We have to be thinking outside the square … this is outside the square,” he said of the idea to end pension tax penalties for working pensioners.

“There’s really no downside.”

Press PLAY below to hear Mr Lambert’s view