Framing principles

2.105 The ALRC has developed recommendations for reform in this Inquiry in the light of six interlinking principles: participation; independence; self-agency; system stability; system coherence; and fairness.

2.106 Stakeholders strongly supported this approach. For example, the Australian Industry Group commented that ‘these are valid considerations relating to the contribution of mature aged workers to the workforce and the Australian economy more broadly’.[155] Similarly, the National Welfare Rights Network stated that the principles provide

a sound platform for the consideration of Commonwealth legislation that may enhance or limit mature age Australians’ participation in the workforce or other productive work (paid or unpaid).[156]


2.107 ‘Participation’ reflects the Australian Government’s ‘Social Inclusion Agenda’:

The Australian Government’s vision of a socially inclusive society is one in which all Australians feel valued and have the opportunity to participate fully in the life of our society.[157]

2.108 The value of workforce participation to disadvantaged older persons was emphasised by the Brotherhood of St Laurence:

work provides income, the capacity to build retirement savings, a sense of purpose and a connection with the community. Participation in paid work can increase both financial and social wellbeing, and so reduce the significant risk that people over 65 have of being socially excluded.[158]

2.109 The Association of Independent Retirees noted that a person’s workforce participation may vary significantly in the wide age range covered by this Inquiry:

Work to gain income to support an individual and/or family is an imperative between the ages of 45 and retirement; Government support can be an exception. After retirement, participation in paid work becomes one of the options for an individual to participate in the life of society to achieve a fulfilling retirement. The incentive to work is one of a number of competing retirement priorities and is often not the sole imperative driving financial wellbeing. The priority given to work depends on the need to supplement savings, eligibility to access Age Pension support, individual and family interests, and to some extent habit.[159]

2.110 Suncorp submitted that the appropriate retirement age will vary for each individual. Hence, ‘it is important to remove age barriers wherever appropriate and allow greater flexibility in the transition to retirement’.[160]


2.111 The principle of ‘independence’ is related to the above principle of participation: ‘supporting people to take independent decisions and to negotiate priorities through participation’ is critical to ‘capacity building’.[161]

2.112 Independence involves the ability of older persons to make choices about the form of participation. This includes the capacity to determine when and at what pace withdrawal from work takes place.[162] It also involves the ability to make genuine choices between participation in paid work, unpaid work, or some combination of both.

2.113 These elements of independence were affirmed by submissions from stakeholders. National Seniors Australia said that:

Multiple factors will come into play for each person as they make decisions about work and retirement, eg health, income, caring responsibilities, but artificial barriers based on age should not be amongst them. Irrespective of age, each person should feel they can make the choice about whether or not they work.[163]

2.114 The Government of South Australia also highlighted that continued workforce participation may not be an option for some older person. Other choices need to be available:

Mature workers should have choices about how and when they relinquish employment, based on whether they have capacity to extend paid employment or involve themselves in ‘service to the community’ through volunteering.[164]

2.115 For those ‘in physically demanding occupations’, having choices was seen as important. These older persons

may experience physical discomfort or health concerns, which do not qualify them for a disability pension … Suggested changes to the existing support systems (such as raising the Superannuation preservation age) could have the inadvertent consequence of severely limiting individuals’ choices about how they spend their later years. On this basis, the South Australian Government contends that deliberations should also be informed by how suggested changes will impact upon individuals’ choices.[165]

2.116 The ACTU urged that ‘mature workers have already contributed significantly to the workforce throughout their lives, and should have the right to choose when to retire’.[166] The ACTU also stressed that ‘making it more difficult for workers to retire will not necessarily lead to those workers finding or retaining meaningful paid employment. Moreover, choices for older persons needed to be ‘real choices’—about ‘when, where and how they work’.[167]


2.117 The principle of ‘self-agency’ was a key principle identified in the ALRC’s Inquiry into family violence and Commonwealth laws. An individual’s right to make decisions about matters affecting him or her should be respected.[168] The principle of self-agency is one that underpins the idea of ‘independence’ and of ‘participation’, as considered above. Like the principle of independence, self-agency also encompasses choice. The ACTU again emphasised ‘meaningful choice’ for older workers in this context. These choices include the timing of retirement, ‘as well as the work that they are asked to perform prior to retirement’. It noted that workers in insecure employment are often denied such meaningful choice.[169]

2.118 Self-agency also embodies the importance of being treated with dignity and respect, as reflected in the National Statement on Social Inclusion.[170] In its submission, the National Welfare Rights Network emphasised the importance of the values of ‘the inherent dignity and respect due to each person’.[171]

System stability

2.119 The principle of ‘system stability’ is particularly relevant in areas such as superannuation. The Super System Review Panel stated that

Superannuation is a large and complex system with an increasingly important social and macroeconomic dimension. It must be regulated and administered coherently and rule changes, including to taxation rules, should be made sparingly and in a way that engenders member confidence.[172]

2.120 Concerns about the pace of change in the area of superannuation were also noted in the Tax Review.[173] Stakeholders in this Inquiry repeated these concerns and noted the consequences of a lack of stability. National Seniors Australia, for example, submitted that, if the Australian Government wishes to encourage effective planning for later life, this is

only possible in a predictable and stable environment. Policy volatility can lead to consumer disenchantment and disengagement.[174]

2.121 National Seniors Australia gave the example of repeated changes to superannuation. It argued that such changes ‘erode community confidence in the superannuation system and encourage more Australians to minimise, rather than maximise, their superannuation savings’.[175]

2.122 While system stability has particular relevance in the retirement income context, it is also an important principle more generally. As noted by the Australian Chamber of Commerce and Industry (ACCI):

Many Commonwealth programs impinge on planning decisions, particularly where there are marginal differences between the financial benefits of working and not working. This in turn affects continuity of employment and flexibility options. Both employers and employees require reasonable stability for productive employment arrangements to endure.[176]

2.123 Other related principles are ‘coherence’ and ‘fairness’, which may be seen as aspects of a stable system, but also go further. They concern how the system operates in terms of impact on those affected and more broadly within the Australian community.

System coherence

2.124 The Tax Review identified ‘system coherence’ as a priority in its review of the retirement income system, by which was meant system consistency, simplicity and transparency for individuals.[177] A number of stakeholders expressed concerns about the lack of consistency, simplicity or transparency. For example, one considered the following should be a framing principle in the Inquiry: ‘easy to understand—and less of—paperwork!’[178]

2.125 Complexity, in particular, was identified as a cause of disengagement in paid work. ACCI, for example, stated that the complexity of laws that may affect an older person’s workforce participation ‘can often tip the balance against a decision to continue working’.[179]

2.126 The Australian Institute of Superannuation Trustees (AIST) also made the connection between complexity and disengagement. It submitted that laws and regulations about superannuation have become ‘convoluted’, with the effect that

It is possible that participants are not so much disengaged as utterly confused. The numerous age-based limits within superannuation cause considerable confusion and are difficult to navigate, before consideration of the penalties for breaching them.[180]

2.127 Accessible information is another aspect of system coherence. Its lack was identified as an element of complexity, leading to poor understanding of various rules and entitlements. For example, one stakeholder raised concerns about the difficulty of navigating various aspects of the social security system, stating that the ‘system should be more transparent’ and less complicated.[181]

2.128 COTA Australia argued that ‘more effort needs to be put into providing easy to understand, clear and concise information’ for older persons.[182] Where there is a lack of understanding, ‘myths’ may arise, leading people to decide not to undertake paid work for fear of losing certain benefits. AIST provided as an example misunderstanding about the interaction of the Age Pension and the income and assets tests. It suggested that:

Perhaps better communication of how the Age Pension interacts with these tests could help encourage people back to work as they may realise that they can earn a certain amount of income before their Age Pension is affected.[183]


2.129 ‘Fairness’ can be a consequence of coherence, consistency and the stability of the relevant systems involved.

2.130 Fairness can reflect a commitment to a fair distribution of national resources and a balancing of responsibility between individuals and government. In the context of retirement, the Tax Review panel contended that responsibility for providing retirement income should be shared between government and individuals:

Governments should provide for minimum and essential needs and facilitate self-provision. Each of these goals should be pursued in an equitable and targeted way.

Individuals should save or insure during their working lives to provide resources in their retirement. Inevitably under this approach, retirement outcomes will differ for different people, depending on the extent to which they can and do make self-provision.[184]

2.131 A further aspect is fairness between generations—that is, ‘intergenerational equity’. Issues important to intergenerational equity include the management of public debt and the funding of pension schemes.[185] Stability may be considered an important component of intergenerational equity, in which persons of working age support the retirement incomes of others because they anticipate similar support when they become older. AIST submitted that ‘any significant changes to age based limits must be weighed against the cost to society in terms of intergenerational equity, loss of confidence in a system that appears to be changing frequently and affordability’.[186]

2.132 Fairness also encompasses ensuring basic rights and freedoms are enjoyed by older persons, and that there exists equality of opportunity in participation in paid and other productive work.

2.133 In this regard, the ALRC has noted the ‘gendered difference in ageing’ and the effects of discrimination. The Older Women’s Network New South Wales Inc (OWN) stated that ‘good policy and legal protection’ require an understanding that ‘ageing is experienced differently according to gender’.[187]

The differences between older men and older women are stark. To paraphrase the Australian Human Rights Commission (Cerise et al, 2009) unlike most men, most women accumulate poverty over their lifetime.[188]

2.134 Two stakeholders raised issues of age and sex discrimination—and its intersection.[189] The Government of South Australia commented that ‘older women face double discrimination based on both their gender and age’. It argued that ‘stereotypes and assumptions prevent older women from being selected for jobs or from being considered for training and promotional opportunities’.[190]

2.135 A further aspect of fairness was advocated by employer groups, namely the potential cost impacts on employers of any recommendations.[191]

2.136 The six framing principles—participation, independence, self-agency, system stability, system coherence, and fairness—have assisted in balancing a range of competing priorities in evaluating directions for reform, and underpin the recommendations in this Report.

[155] Australian Industry Group, Submission 37.

[156] National Welfare Rights Network, Submission 50.

[157] Australian Government, The Social Inclusion Agenda, <> at 21 March 2013.

[158] Brotherhood of St Laurence, Submission 54.

[159] Association of Independent Retirees, Submission 17.

[160] Suncorp Group, Submission 66.

[161] Australian Government, The Social Inclusion Agenda, <> at 21 March 2013, 1.

[162] United Nations, United Nations Principles for Older Persons—adopted by General Assembly resolution 46/91 of 16 December 1991.

[163] National Seniors Australia, Submission 27.

[164] Government of South Australia, Submission 95.

[165] Government of South Australia, Submission 30. Similarly, the Brotherhood of St Laurence emphasised that ‘the opportunity to be employed should not be conflated with the requirement to be employed’: Brotherhood of St Laurence, Submission 54.

[166] ACTU, Submission 88.

[167] Ibid.

[168] Australian Law Reform Commission, Family Violence and Commonwealth Laws—Improving Legal Frameworks, ALRC Report 117 (2011), Ch 2.

[169] ACTU, Submission 38. The ACTU also submitted that ‘job security and quality of employment’ be included as an additional framing principle.

[170] Australian Government and Social Inclusion Unit, A Stronger, Fairer Australia—National Statement on Social Inclusion.

[171] National Welfare Rights Network, Submission 50.

[172] Super System Review Panel, Super System Review (2010), pt 1, 4, principle 8.

[173] The Treasury, Australia’s Future Tax System: Final Report (2010), pt 1, xxi.

[174] National Seniors Australia, Submission 27. See also Australian Chamber of Commerce and Industry, Submission 44.

[175] National Seniors Australia, Submission 27.

[176] Australian Chamber of Commerce and Industry, Submission 44.

[177] The Treasury, Australia’s Future Tax System: The Retirement Income System—Report on Strategic Issues (2009), 15–16.

[178] W Trinder, Submission 01.

[179] Australian Chamber of Commerce and Industry, Submission 44.

[180] Australian Institute of Superannuation Trustees, Submission 47. The submission includes an example of member splitting and spouse contributions not being commonly used because of confusion and complexity.

[181] R Spencer, Submission 08.

[182] COTA, Submission 51. The comment was made specifically in relation to tax, but reflects observations made throughout the submission. See also National Welfare Rights Network, Submission 50 in relation to ‘working credit’.

[183] Australian Institute of Superannuation Trustees, Submission 47.

[184] The Treasury, Australia’s Future Tax System: The Retirement Income System—Report on Strategic Issues (2009), 1.

[185] A Gosseries, Theories of Intergenerational Justice: A Synopsis <> at 721 March 2013. The intergenerational exchange is, however, broader and flows both ways: ‘Forwards, towards younger generations, are investments in infrastructure, innovation and environmental protection. Backwards, to older generations, are pensions and public and family care for older people’: OECD Meeting on Social Policy, Paying for the Past, Providing for the Future: Intergenerational Solidarity (2011).

[186] Australian Institute of Superannuation Trustees, Submission 47.

[187] Older Women’s Network NSW Inc, Submission 26.

[188] Ibid. Citing: Australian Human Rights Commission, Accumulating Poverty? Women’s Experiences of Inequality Over the Lifecycle (2009). See also J Willis, Submission 42.

[189] Diversity Council of Australia, Submission 40; Government of South Australia, Submission 30. COTA also considered that discrimination should be included as a framing principle: COTA, Submission 51.

[190] Government of South Australia, Submission 30. Referring to: Australian Human Rights Commission, Accumulating Poverty? Women’s Experiences of Inequality Over the Lifecycle (2009). See also The Premier’s Council for Women South Australia, Submission 13. OWN suggested that another principle should be added: ‘capacity’—including capacity to continue in employment and to protect oneself from discrimination and adverse treatment: Older Women’s Network NSW Inc, Submission 26.

[191] Australian Industry Group, Submission 97.