More pensioners than ever are having to work part-time just to get by according to new research, with nearly 5 per cent of people on the pension now doing paid work.

Key points: New research shows that a growing number of pensioners are needing to work part-time

New research shows that a growing number of pensioners are needing to work part-time Women and divorcees are among those most affected

Women and divorcees are among those most affected Seniors Australia says tax changes are needed to not penalise pensioners who work

Cost of living and inequality researcher Paul Blacklow, of the University of Tasmania, said women and divorcees were increasingly affected.

"Aged pensioners who are working were three times more likely to have been divorced than aged pensioners or other self-funded retirees," Dr Blacklow told 7.30.

"The majority of women that were working as pensioners wanted to work less while only about 20 or 30 per cent of males who are working wanted to work less."

Ian Henschke from National Seniors Australia said pensioners should be allowed to earn a lot more before they are penalised for working.

"One of the things that they should be looking at is pension poverty in Australia," he told 7.30.

"One in four pensioners is living in poverty.

'Just keeping my head above water'

Bev Foster says the extra money from part-time work means she can live a 'normal' life. ( ABC News: Kirsten Robb )

Bev Foster, 67, may have reached retirement age but she still works part-time at a farm stay near Ballarat, Victoria.

She loves her work, but she says it is a financial need due to a lack of superannuation that drives her.

"Many of us, particularly women of my age, stayed home with their children," she told 7.30.

"We were the ones whose mothers didn't work and so we grew up in that era where being home with our children, taking them to school and bringing them up was really important.

"So, there wasn't superannuation and also wages have always been less for women."

As a single person, Ms Foster receives $926 a fortnight from the pension.

She said having a part-time job was essential to having a normal life.

"It gives me just enough money to keep my head above water because the pension definitely doesn't cover any extras at all," she said.

"When it comes to buying clothes or gifts for people at Christmas, there's not anything left over."

Tax changes could 'encourage' people to work

Ian Henschke wants the government to change tax laws so pensioners keep more of the money they earn. ( ABC News )

Single full pensioners can earn up to $474 a fortnight from work (including the pension work bonus) without their pension being affected.

But they lose 50 cents in every dollar they earn over that amount.

For Ms Foster that almost makes it not worth working much more because of the hit to her pension.

"I would definitely like to earn more," Ms Foster said.

"But I've been in situations where my pension has been cut so much that my income doesn't really increase as much as it should."

Mr Henschke is calling for a change in tax laws to help working pensioners.

"And if they do go out and get a job, once they've earned one day's work, they start to lose their pension," he said.

"So why not encourage people instead of discouraging people.

"If you look at countries like Canada and New Zealand, they've got a much lower tax rate, and they allow their pensioners to work.

"And guess what? They've got lower pensioner poverty."

Dr Blacklow said it was not just pensioners who suffer from earning extra income while receiving benefits.

"The highest effective marginal tax rates are felt by people receiving family tax benefit and those on unemployment benefits, that's where the real high effective marginal tax rates are," he said.

Nothing left after divorce

Rodney James' divorce left him struggling financially. ( ABC News )

Rodney James is a former carpenter and now works four days a week as a lolly-pop man, helping keep kids safe on the way to school.

"I just love the interaction with the kids, they're so different and they from lots of different backgrounds as well," the 72-year-old told 7.30.

Mr James said life can be tough on the pension.

"People who are pensioners and going out and getting extra work, I think that's a bit hard," he said.

"The pension is not very high to start with and any jobs that you get are the low-paid jobs."

His biggest cost is his weekly rent.

He used to own a house but it was sold as part of his divorce seven years ago.

"It was traumatic, it was financially upsetting," Mr James said.

Paul Blacklow's research shows that home ownership is a key factor in avoiding pension poverty. ( ABC News )

"My situation after the divorce was that I didn't have any money at all to do anything."

Dr Blacklow said the security of housing was one of the key elements in whether someone is comfortable in retirement.

"It's a huge advantage to own your own property and not have to pay rent in retirement," he said.

"It's often one of the big factors that determines whether you're going to be living in poverty in retirement or not."

His research also shows that marital status appears to have a big impact on whether someone needs to work past retirement age.

"We found aged pensioners who are working were three times more likely who have been divorced than age pensioners or other people or other self-funded retirees," he said.