According to the Australian Institute of Superannuation Trustees (AIST), not enough thought has been given to the high levels of involuntary retirement when considering raising the Age Pension eligibility age to 70.
Research conducted by the Australian Centre for Financial Studies and the AIST found that up to 40 per cent of older Australians do not choose when they retire.
Those working in community and personal services, in clerical and administrative roles, sales workers and labourers are between 35 and 50 per cent more likely than professional workers to retire before the age of 60.
AIST Chief Executive Eva Scheerlinck said that it isn’t just people with health issues who are struggling to work until age 70.
“Many older Australians do not get to choose when they retire,” said Ms Scheerlinck.
“We know that while health plays a role, other factors such as age discrimination, job type and caring demands all have a significant impact on when a person retires from paid work.
“Ensuring long-term sustainability of the system is important but we need to make sure there are appropriate mechanisms in place to protect older Australians who are unable to work longer,” said Ms Scheerlinck.
She added that any increase in the eligibility age would also add to workers’ concerns about not having enough money in retirement.
“Any changes that affect access to the Age Pension need to be part of a broader community conversation on retirement objectives,” said Ms Scheerlinck.
“We do need to look at ways to keep Australians in the workforce longer but simply raising the pension age is not the answer.”
In 2015, Susan Ryan, then age discrimination commissioner, found that more than one in every four workers over 50 had faced age discrimination.
A report commissioned by financial company AMP and undertaken by Canberra University’s National Centre for Social and Economic Modelling (NATSEM) found that people will simply be too sick to work by the time they reach qualifying age.
If the Government is ever going to get its legislation raising the pension eligibility age to 70 passed, it has to ensure that it is a feasible prospect. At the moment, that simply isn’t the case.
As we have previously discussed, there needs to be an alternative for those who are physically or mentally unable to work until they’re 70.
There also needs to be work done to break down the barriers and discrimination facing the over 50s when they apply for new jobs.
Currently, workers in the older age bracket are told that their skills are outdated and there is little value in training someone in their 50s.
This issue isn’t just about the Government’s bottom line it is a serious mental health and confidence issue.
There are more people over 50 on work-for-the-dole schemes than unemployed people below 22. Men aged between 45 and 65 who have lost employment are one of the largest growing groups of people with mental health issues.
However, changing the mindset of employers will not be easy.
The Government has already tried a scheme offering $10,000 for companies taking on older workers but fewer than 3000 people responded when it was hoped the number would be closer to 32,000.
Perhaps offering subsidies for reskilling and training over 50s would be one way to approach the problem. Possible programs could include education campaigns with business leaders who employ a mix of age ranges in their workplaces, and getting out and spreading the word about the benefits of having more experienced staff members.
What would you like to see done to address the age discrimination issue in Australia? Would bigger subsidies work? Should the Government abandon its plans to lift the eligibility age for the pension?