Seniors will soon be able to earn more money without their fortnightly age pension being affected.
Laws introduced to federal parliament on Wednesday will give a $4000 boost to those on the pension who are also doing some paid work.
Under the proposal, the maximum work bonus balance limit will be increased from $7800 to $11,800 from the start of next year.
Social Services Minister Amanda Rishworth said the new laws would remove obstacles to those on the pension looking to return to work in some capacity.
"Pensioners with employment income can earn more before their pension is affected, and this is the best way to target additional support to pensioners to take on work," she told parliament.
"This accords with the evident trend of Australians approaching or at retirement age, who may be looking to continue to seize on a little more opportunity for work."
The government had previously unveiled temporary changes to boost the work bonus balance limit to $11,800 for 12 months, but was due to expire in December.
The new laws would make the temporary increase to the balance permanent.
The changes were one of the recommendations put forward in the government's employment white paper, released last month.
It's estimated 195,000 people go on to the age pension each year.
The changes are expected to cost $42.4 million over the next four years.
"At the jobs and skills summit last year, there was a clear message and a focus on inclusion, promoting equal opportunity and reducing barriers to employment," she said.
"We want to continue to ensure that older Australians have the option, should they wish to do so, to take up work, or work a bit more."
Council on the Ageing chief executive Patricia Sparrow said the legislation was an important step but more needed to be done to address ageism in the workplace.
"Making the work bonus, which allows people to keep working while receiving the aged pension, a permanent feature is a great step forward," she said.
"There's still work to be done on simplifying the system, including better aligning it with the personal tax income system, but we're hopeful that it will allow some older workers who wish to get back into the workforce."
The legislation will also introduce amendments to double the time limit for those on payments such as JobSeeker and youth allowance to retain benefits such as concession cards when they start work.
The time limit, also known as the employment income nil rate period will be increased from 12 weeks to 24 weeks from July, should the laws pass parliament.
Ms Rishworth said the changes were to make sure those on the payments weren't discouraged from taking up short-term or casual work.
"Losing access to concession cards and certain supplements within a couple of months of getting a job can be a concern for income support recipients considering opportunities for work," she said.
"The doubling of the employment income nil rate period is about addressing this concern, smoothing the transition from income support to work."
It was expected 138,000 welfare recipients would benefit from the changes, which would cost $42.8 million.
