[P]ersons out of the labour force due to illness had significantly lower incomes ($218 per week as opposed to $1,167 per week for those employed full-time), received significantly higher transfer payments, and paid significantly less tax than those employed full-time or part-time. This results in an annual national loss of income of over $17 billion, an annual national increase of $1.5 billion in spending on government support payments, and an annual loss of $2.1 billion in taxation revenue.The authors--Deborah J Schofield, Rupendra N Shrestha, Richard Percival, Megan E Passey, Simon J Kelly, and Emily J Callander--conclude that "In the past, policy has focused upon economic incentives to defer retirement. However, as ill health is a primary barrier to workforce participation in older Australians, economic incentives alone may not be able to increase participation if the underlying health conditions are not addressed. Investment in improvements in health is potentially an important way of improving national living standards."
Source: BioMed Central Public Health Volume 11 Abstract (June 1, 2011)