That was five years ago and the former migrant resource centre manager is still unemployed and looking for work.

"I am no longer empathic to the plight of people who are poor or unemployed. I am living it. It is grotesque," Ms Bartels, 63, says.

"I was very well connected and well respected in the health and community services industry, which is growing. And I can't land a job.

"I am either over qualified or there is someone recruited internally or a younger person is recruited externally."

New research from the Brotherhood of St Laurence has found that 40 per cent of recipients of employment services last year were mature age Australians who spent more than a year on income support.

It also found employment services are failing to help older Australians to find appropriate work, instead funnelling former managers and white collar workers into entry-level low-skilled and low-paid jobs including traffic controlling and supermarket packing.

Paying bills on a Newstart allowance of $523 per fortnight is a struggle for Ms Bartels who has been forced to live with family in Bosley Park because she is no longer able to afford to pay her rent.

"I always had a job and felt lucky I had a job I loved. I loved empowering people," Ms Bartels said.

"Now I've been cast aside as a dole bludger, a 'taxed-not'.

"You are really stigmatised and cast off into a netherland when you lose your job at a mature age".

The Brotherhood of St Laurence research has found that people over the age of 45 are increasingly caught between work and retirement – too old for ageist employers to hire and too young to retire. It reveals mature age people are increasingly dependent on employment services and welfare and at risk of living in poverty.

More than one in five people on the NewStart allowance for more than a year were over the age of 50, according to the researchers citing Department of Social Services labour market figures for March this year.

Dina Bowman from the Research and Policy Centre at the Brotherhood of St Laurence said it is difficult for mature-age job seekers to maintain their professional status.

"The typical pattern is a downward one with contract or casual work," she said.

Research from the Centre for Retirement Research at Boston College has also found older workers are finding employment in lower-paid and lower-skill service jobs in child care, taxi driving and retail.

Older Australians are lingering on the NewStart allowance for more than a year or two at the same time the Federal Government is proposing to raise the pension age to 70.

Employment services staff are often aged in their 20s or early 30s which the researchers said may contribute to unconscious bias, negative stereotypes and poor appreciation of the skills of older job-seekers.

Still saddled with a mortgage, family responsibilities or newly single without a home and enough money to retire on, a burgeoning number of people who lose their jobs after the age of 45 are at risk of entering old age in poverty. Unlike younger people, there are fewer second chances.

"People are expected to work longer but are being caught in this netherworld of unemployment," Dr Bowman said. "That's the key challenge, people are being expected to work longer."

"We have more older people as the baby boomers age and that's one of the reason they are seeking to increase pension eligibility to 70.

"If you are unemployed at 55 and you can't get back into work, that's a very long time to be unemployed and living in poverty because the NewStart allowance is so low."

Dr Bowman said policy makers were faced with the challenge of the long-term unemployed entering old age impoverished and unable to afford health care.

People interviewed for the Brotherhood of St Laurence research were unable to afford dental care, new glasses and some were homeless.

Women said employability hinged on looking young, fit and attractive and men said they needed to be physically fit and quick workers to keep their jobs.

Dr Bowman said appearance can be a source of discrimination and that women can become invisible when they lose their youthful appearance.

Younger bosses could also feel intimidated and threatened by older workers.

Susan Jackson-Wood, 65, had been in the workforce for 49 years and was a corporate relations manager in Adelaide when she was squeezed out of her last job after a change in management.

"It was intimated a much younger face was required. Because I was up out front and representing the organisation at various functions," she said.

"Portions of my work were taken away from me and given to other people without my knowledge. Meetings were held that the rest of the department were invited to that I wasn't. A major function was held that previously I would have been heavily involved in and I was totally excluded from anything to do with it.

"It really debased my self-confidence and self-esteem. You get to the stage where you start doubting yourself.

"I ended up having a nervous breakdown."

Niki Vincent, the former chief executive officer of the Leaders Institute where Ms Jackson-Wood now works helped "nurse back" her self confidence. Ms Vincent was appointed as South Australia's new equal opportunity commissioner earlier this year.

"Both my self confidence and self esteem have returned, mainly as a result of the CEO's faith in me," Ms Jackson-Wood said.

Professor John Buchanan from the University of Sydney said policy makers are "whipping up moral panic about a labour shortage".

"But when you see how employers are treating older workers the problem is on the demand side, not on the supply side," he said.

"It would be helpful if policy makers did something about overcoming deficiencies in labour demand in general and discrimination against older workers in particular.

"I think a bit of aggressive prosecution of employers for discrimination would be helpful."