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Older Australians are prepared to return to work and could be part of the solution to addressing critical labour shortages, advocates say.
A survey of about 4000 aged pensioners by National Seniors Australia shows 20 per cent would consider re-entering paid work after retirement.
Another 16 per cent already have.
Most respondents cited money as their motivation, describing their struggle to make ends meet on the pension.
National Seniors is lobbying the federal government to exempt employment income from the age pension means test.
Currently, every dollar earned over the $480 threshold results in a 50-cent reduction to the fortnightly pension.
National Seniors chief executive John McCallum says this creates a strong disincentive for older Australians.
"This traps pensioners at low quality of life, including too many in poverty," he said in a statement.
"The nation is crying out for workers in so many industries. Allowing pensioners to work would help these industries, the pensioners and the Australian economy."
About 14.2 per cent of Australians 65 and over are in the workforce compared to 24.7 per cent in New Zealand.
Another 450,000 seniors could be added to Australia's workforce if NZ's participation rate was replicated, the advocacy group says.
Respondents to the survey said they needed additional income to cover living expenses.
"We have been scammed out of our retirement savings and despite my disability, we need to find an income source," one said.
Another said their ex-partner had a gambling problem and they had no superannuation to fall back on.
Unemployment in Australia remained steady in March at four per cent. Both the Reserve Bank of Australia and Treasury are forecasting an unemployment rate of 3.75 per cent later this year.
Delivering the federal budget last month, Treasurer Josh Frydenberg said the jobless rate was heading towards a 50-year low.
Industry groups including the Australian Chamber of Commerce and Industry have urged the next federal government to use all available levers to address labour shortages.