Ill-health costs retirees $142k in lost super: report

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Australians forced to retire early due to health problems that could be treated with early intervention each lose up to $142,100 in superannuation, according to a new report.

It found a staggering $20.8 billion was being lost in superannuation each year when Australians aged 50-plus were forced into early retirement as a result of ill-health. The overall impact on gross domestic product (GDP) was $45.3 billion, it said.

Effective health strategies and medicines for those at risk had the potential to recover $1.9 billion in super and return $3.9 billion to the economy.

Our Health Our Wealth: The Impact of Ill-Health on Retirement Savings in Australia was launched in Canberra at the annual health industry event, PharmAus18.

Conducted by a research team led by Professor Bruce Rasmussen, director of Victoria University’s Institute of Strategic Economic Studies (VISES), the report used data from the Australian Bureau of Statistics (ABS) Household Income and Labour Dynamics in Australia (HILDA) survey.

Professor Rasmussen said that while the research noted early retirement due to ill-health was hard on individuals, their families and carers, it also quantified the financial impact on the Australian economy.

The report notes that Australia’s ageing population already presents significant health and aged-care challenges and that early retirement from illness magnifies those pressures.

The Organisation for Economic Cooperation and Development (OECD) estimates the number of individuals aged 65 or older relative to those of prime working age (20–64-year-olds) is set to more than double across the 34 OECD countries from 24 per cent in 2005 to 52 per cent in 2050.

The report found that those retiring early (aged 50–54) due to ill-health lose up to $142,100 in super – comprising $118,600 in balances foregone and $23,500 in funds withdrawn.

It estimates that close to 300,000 more Australians aged 50–64 would be working if their health could be improved from poor/fair to good/excellent through early prevention strategies.

“Early retirement due to ill-health imposes a significant economic cost, almost 4.5 times government expenditure on the Pharmaceutical Benefits Scheme in 2016–17,” says Liz de Somer, chief executive of Medicines Australia, which conducts the annual symposium. “It’s very important to consider ways to address this and take action while illness may be more manageable, to retain a person’s ability to function effectively and remain in the workplace.”

Common health conditions associated with early retirement, according to the report, include psychological and psychiatric illness, particularly depression and anxiety, and musculoskeletal and connective tissue conditions such as osteoarthritis, osteoporosis, neck and back problems.

Treatment strategies for those aged 45 and over with psychological issues could prevent 19,325 early retirements and save the economy about $16.3 million, and for those with musculoskeletal conditions, early intervention could reduce the number of early retirees by 8734 and generate $9.4 million in savings.

The total combined economic benefit of addressing these conditions would be $3.9 billion in annual economic benefit and $1.9 billion in reduction of lost super.

“Advances in healthcare promise to change the management of disease in the future,” said Ms de Somer, “particularly the development of new medicines for more difficult-to-treat illnesses such as cancer, dementia and other neurological conditions.

“These findings clearly indicate there’s much to be gained in keeping Australians healthy.”

Professor Rasmussen told AAP: “One of the suggestions might be that there should be better screening of both mental illness and muscular-skeletal problems, probably in the workplace.

“The idea of getting onto these things early, as we’ve learnt in so many treatment programs, is a real advantage.”

Have you had to retire early due to ill-health? Were you able to take advantage of any treatments to lessen the impact of your condition? Have you had to rethink your retirement because of your health problems?

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Written by Janelle Ward


Total Comments: 9
  1. 0

    trouble is you cant get help when you need it, with health issues , cant afford it , dont qualify

  2. 0

    Having cancer twice has me classified as chronically ill but it has not affected my ability to earn a living. A bit more exercise and better living with out poisons and better food choices would be a good start for these people.

    • 0

      Here he goes again – the egomaniac who has no clue what life is like for others but presumes to judge and condemn anyway.

      Shut it, OG, and get out and learn how things are in the real world for real people – people who struggle and suffer for decades, and who have ALWAYS eaten well and exercised often, but suffer because of dangerous and unhealthy work conditions, after-effects of abuse or deprivation in childhood, serious injustices, lack of opportunity…

      EMPATHY is what makes us human. Lack of it makes you a monster.

    • 0

      I agree OG that suitable exercise, good food choices, avoiding toxins and relaxing sensibly would solve a lot of health issues.

      Those exact changes also helped me fight a very bad dose of chronic fatigue brought on by glandular fever that was misdiagnosed.

      It isn’t easy to change particularly when it requires your own efforts when all you want is a magic pill to fix you without having to do anything yourself.

      Empathy is fine OGR but treating people as victims or martyrs rarely solves the problem.

      Just taking action yourself can though. It’s called overcoming adversity.

      I’m a monster now too I expect as I’d rather changes that heals than commiserations that entrench disadvantage.

  3. 0

    There are often cheap and effective treatments for many of these conditions that are ignored because people will not take responsibility for their own health. A really good example of this is psychological disorders such as anxiety and depression. Recent research has confirmed that moderate exercise – especially in the open air such as a park or beach – is as effective as medication. The same goes for arthritis; use it or lose it is the maxim here. Exercise actually eases the condition – look up the effects of Tai Chi on people with arthritis. Cancer patients are better able to tolerate treatment and recover better if they are engaged in appropriate exercise. Exercise lessens the potential for osteoporosis and can even reverse those diagnosed as osteoporotic.

    The solid research is out there and the solution relatively cheap. The problem is, most people will not do this.

    • 0

      When the work conditions cause the anxiety and depression, treatments aren’t much use.
      A relative recently withdrew from employment (hopefully temporarily) because the work conditions were utterly intolerable. No amount of treatment was ever going to change things. It was the employer who needed treating!

    • 0

      I had a mental health team tell me that you can’t change other people but you can change your reactions to them and that often forces them to change too. In the situation I was in it worked. Such a simple thing just changing your reactions and thinking.

      Your relative needed therapy and counselling to come up with behavioural changes to the employer and the work environment. Strategies are available to deal with bullies and unreasonable work situations. The young do it a lot. Smile, agree and just do your own thing usually drives bosses loopy in the end. Slaves used similar techniques such as never doing anything that wasn’t instructed or required and happily watching the chaos unfold.

      We had a bi polar boss once who drove half the staff crazy but the other half eventually took him down and had him removed from the workforce.

      They did it by letting his management incompetence finally stuff the whole workplace up. Nobody stepped up to save him from his folly and he fell fast.

      It’s expectations and the desire for a job well done when that is no longer possible after all the downsizing etc that is causing angst. Workers need to stop fixing the mess and let the chaos reign until the edifice collapses and sanity prevails.

      Most workplaces are intolerable now but it’s because we’ve played along and let it happen by this ” poor me victim I need saving ” thing going on.

      And exercise and walking in nature, careful relaxation and changing reactions will allow people to cope in intolerable workplaces until they can find another position.

      You have to act though as running away isn’t a great option.

      Best form of defence isn’t always retreat as attack can often let you hold ground and come out in front.

      And yes people suffer bad childhoods and poor conditions and abusive situations and some surrender and some become stronger.

      Help your relative to fight OGR as it’s way too easy to let the bad guys believe they will always win and the good guys believe there isn’t anything you can do.

  4. 0

    My partner had to retire early, but no treatment would have prevented it. Work injuries, injuries and health issues from childhood abuse, and intolerable mental and physical strain in low-paid crap jobs where employees were abused became completely intolerable after decades of suffering.

    What some folk need is not treatment, but opportunity – recognition of their abilities and a chance to achieve some sort of job satisfaction. And perhaps some better policing of abusive employers?



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