Money Your Super Any government retirement income inquiry needs to deal with unemployed older people
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Any government retirement income inquiry needs to deal with unemployed older people

Older retirees.
Older people who lose a job are forced to retire before they're ready. Photo: Getty
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The Morrison government’s touted retirement incomes system review needed to address the plight of older, unemployed Australians who won’t find work again, lobby group CPSA said.

“There are 185,000 Australians aged over 55 who are unemployed and they are a special case,” said Paul Versteege, policy co-ordinator with the Combined Pensioners and Superannuants Association.

“Retirement has been forced on these people by circumstance.

“We have called for the creation of a Social Services Commissioner to deal with the rate of the age pension, disability support pension and carer pension as well as Newstart.”

Currently welfare payments are set with reference to the consumer price index and wage levels, but a dedicated commissioner could look at the needs of particular classes of beneficiaries.

“We shouldn’t have to rely on automatic mechanisms to set those levels,” Mr Versteege said.

“We have been arguing for years that there needs to be a review of the interaction of the pension, superannuation, taxation systems and housing policy,” said Ian Yates, CEO of aged lobby group COTA.

Mr Yates said there were a number of basic issues to work out, including “the purpose of super” which the government still had not legislated.

The current system made wealthier people reluctant to spend their super and so used tax concessions to build up big balances, despite changes that reduce the amount of super that can be tax-free.

“Retirees have to come to terms with that. It’s absurd that some people will die with more super than they started with, and that is supported by tax concessions,” Mr Yates said.

The women’s deficit in superannuation which sees them retire with less than half the superannuation of men and puts many on the path for aged poverty should also be addressed, says Women In Super chief executive Sandra Buckley.

“The current system does not take into account the caring responsibilities undertaken by Australians – the majority of whom are women. These women (and men) are penalised financially throughout their lives but in particular at retirement,” she said.

Ultimately, we would like to see a superannuation system that has no gender bias.”

Such a system would use the age pension or similar mechanism to boost the contributions of carers, she said.

Housing needed to be better factored into retirement incomes, Mr Yates said.

“The current tax system encourages over-investment in housing that leaves people with expensive houses still eligible for the pension,” Mr Yates said.

“Other people who own a more modest home and put away money for retirement may find they are entitled to a part pension or no pension at all.”

That discrepancy results from the fact that the family home is not factored into the pension assets test while savings are.

Putting the retired incomes cart before the super horse

However, in the eyes of many, the vague commitment to the review made by Treasurer Josh Frydenberg last Friday is unworkable because it comes before the government has dealt with super issues already at hand.

There has been no official response from the government to the Productivity Commission report into superannuation released in December and which called for an end to multiple fund memberships and scrapping underperforming funds.

Legislation that has passed Parliament which demands improvements in member outcomes is yet to be implemented.

The legislation will require a lot of work on developing regulations before it can be functional, and that is likely to take at least until the end of the year, industry sources say.

That, along with the adoption and implementation of the Productivity Commission report, means further changes to the retirement incomes system are likely to be off the agenda for some time.

The New Daily is owned by Industry Super Holdings

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