There are two simple solutions.
First, allow self funded retirees to earn a total income at least equal to the pension, before recouping imputation credits.
Second, and the proposal I sent to Bill Shorten, was for retirees that ordinarily do not pay tax, have their imputation credits treated as income and be taxed according to the prevailing tax regime. This effectively means that up to $18200 in imputation credits would not currently be taxed, and allow those on marginal self funded retirement incomes to continue to live modestly without a tax payer funded pension.
You certainly seem to be taking a balanced view in terms of acknowledging that there are problems with the Labor proposal etc.
A major concern in any "compensation" sort of proposal is what defines a retiree.
I'll be politically incorrect and straight to the point and say that for anyone employed on the basis of physical strength or appearance, and there are huge numbers of both, well then the superannuation preservation age (60) is unrealistic and the Age Pension age (67) is silly to the point of farce.
It's politically incorrect to say it but I will. If you're applying for jobs facing the public and aren't reasonably good looking then forget it with rather a lot of employers. There's usually the token older person so it all looks legit but such jobs are overwhelmingly skewed toward younger workers particularly women. For most blue collar work it's much the same, there are exceptions but it's very heavily skewed to those under 50 in practice.
So we have a situation where many in their 50's or in a few cases even 40's find themselves in a situation where either they're self funded involuntary retirees, done completely outside of superannuation, or they're going to spend the next ~15 years on the dole jumping through an endless stream of hoops in order to claim a payment that's barely adequate. It's a not uncommon scenario in practice.
Those who've seen it coming tend to be the people who invest most heavily outside of super and that's motivated by fear far more than any desire to actually be rich. Those people have, of course, already paid more tax by choosing this course of action given they'll be paying tax on the returns from those investments at their marginal rate whilst they're working. Plus they won't be claiming welfare, avoiding that being the primary reason they've invested.
So in any "compensation" arrangement I'd want to see it apply to retirees as such with age not forming part of that definition. If someone's a self-funded retiree at whatever age well then they're a self-funded retiree.
Those in this situation tend to be "off the record" almost completely. Not in employment, not on any form of welfare, not drawing on superannuation, paying a bit of tax but not a lot. They largely don't exist from a statistical perspective, they're not captured in anything which records employment, unemployment, pensioners or those living on superannuation since they're doing none of those. As such they're easily overlooked but personally I know a few so it's a real thing most certainly.