In an effort to address labour shortages, from Thursday, eligible pensioners and veterans will immediately be able to earn an additional $4000 before their government payments are reduced.

"Employers are calling out for experienced workers, particularly in the health and childcare sectors, so it makes sense to offer incentives to older Australians to encourage them back to the workforce and share their skills," Social Services Minister Amanda Rishworth said.

The maximum Work Bonus income bank will be lifted from $7800 to $11,800 for those on income support.

Ms Rishworth said experienced workers in health and childcare sectors were needed to address shortages in the sector.

"It makes sense to offer incentives to older Australians to encourage them back to the workforce and share their skills," she said.

Veterans will also benefit from the scheme, the Veterans' Affairs Minister said.

"The ability to undertake meaningful work has been shown to benefit veterans' mental health and wellbeing following their military service," he said.

Pensioners will also not have to reapply for payments for up to two years if their employment income exceeds the income limit.

Australian Associated Press