The Discussion Paper comprises nine chapters. A summary of each chapter and its proposals and questions follows. The Discussion Paper contains 36 proposals for reform, and 15 questions, on which the ALRC is seeking public input.
Chapter 1: Introduction to the Inquiry
Chapter 1 provides an outline of the background to the Inquiry, an analysis of the scope of the Inquiry as defined by the Terms of Reference, and detailed discussion of the framing principles for the Inquiry. The Terms of Reference are included at the end of this Discussion Paper Summary.
Chapter 2: Recruitment and Employment Law
Chapter 2 identifies a number of barriers to mature age workforce participation at various stages of employment. It considers ways in which these may be addressed including in relation to: entering and re-entering the workforce; maintaining employment; protections surrounding termination of employment; regulation and monitoring; and education and awareness.
Reform in this area must address complex and interrelated barriers to workforce participation. This requires a combination of legislative and regulatory reform, combined with measures to increase education and awareness and address perceptions and stereotypes surrounding mature age workers. The ALRC makes a number of proposals aimed at: addressing the practices of recruitment agencies; extending the right to request flexible working arrangements; reviewing modern awards; extending periods for notice of termination of employment; reviewing compulsory retirement; and supporting education and awareness raising and the development of guidance material in a range of areas.
Proposal 2–1 The Fair Work Ombudsman should undertake a national recruitment industry campaign to educate and assess the compliance of recruitment agencies with workplace laws, specifically with respect to practices affecting mature age job seekers and workers.
Proposal 2–2 In 2013, the Recruitment and Consulting Services Association of Australia and New Zealand is conducting a review of its Code of Conduct. The review should consider ways in which the Code can emphasise:
(a) the importance of client diversity, including mature age job seekers;
(b) constructive engagement with mature age job seekers; and
(c) obligations under age-related anti-discrimination and industrial relations legislation.
Proposal 2–3 In order to assist recruitment agencies and consultants to engage constructively with, and recruit, mature age job seekers, the Australian Human Resources Institute and the Recruitment and Consulting Services Association of Australia and New Zealand should:
(a) develop and provide regular, consistent and targeted education and training for recruitment consultants; and
(b) develop a range of guidance material.
Proposal 2–4 The Australian Human Resources Institute and the Recruitment and Consulting Services Association of Australia and New Zealand should promote and recognise best practice in the recruitment of mature age workers, for example through their annual workplace awards.
Proposal 2–5 The Australian Government should amend s 65 of the Fair Work Act 2009 (Cth) to extend the right to request flexible working arrangements to all employees who have caring responsibilities.
Proposal 2–6 The Fair Work Ombudsman should develop a guide to negotiating and implementing flexible working arrangements for mature age workers, in consultation with unions, employer organisations and seniors organisations.
Question 2–1 In what ways, other than through changes to the Fair Work Act 2009 (Cth), should the Australian Government develop or encourage flexible working arrangements for mature age workers?
Proposal 2–7 From 2014, Fair Work Australia will conduct the first four-yearly review of modern awards. In the course of the review, the inclusion or modification of terms in the awards to encourage workforce participation of mature age workers should be considered.
Proposal 2–8 Section 117(3)(b) of the Fair Work Act 2009 (Cth) provides that if an employee is over 45 years of age and has completed at least two years of continuous service with the employer, then the minimum period of notice for termination is increased by one week. The Australian Government should consider amending this section to increase this period from one week to four weeks.
Question 2–2 There is substantial overlap between the general protections provisions under the Fair Work Act 2009 (Cth) and Commonwealth anti-discrimination legislation. In what ways, if any, could this legislation be amended to improve or clarify their interaction in circumstances of age discrimination?
Proposal 2–9 A range of professional associations and industry representative groups are responsible for developing or regulating licensing or re-qualification requirements. The Australian Human Rights Commission should develop principles or guidelines to assist these bodies to review such requirements with a view to removing age-based restrictions in favour of capacity-based requirements.
Proposal 2–10 The Australian Government should initiate an inquiry to review the compulsory retirement ages of judicial and quasi-judicial appointments.
Proposal 2–11 The Australian Government should initiate an inquiry to review the compulsory retirement ages for military personnel.
Question 2–3 Should the Australian Government establish a body or reporting framework with respect to mature age workers similar to that of the Equal Opportunity for Women in the Workplace Agency or its reporting framework? If so, how should such a body or framework operate?
Proposal 2–12 The Australian Human Rights Commission should coordinate a national education and awareness campaign in support of the workforce participation of mature age persons.
Chapter 3: Work Health and Safety and Workers’ Compensation
The first part of Chapter 3 examines work health and safety. The ALRC proposes that Safe Work Australia, in its activities and research, should consider and recognise health and safety issues that may affect mature age workers. Safe Work Australia should also, in conjunction with state and territory work health and safety regulators, develop guidance material around these issues.
The second part of the chapter focuses on workers’ compensation. The ALRC considers potential reform to the retirement provisions in the Commonwealth workers’ compensation system in order to remove the barriers to mature age workers remaining in, or returning to, the workforce. In principle, the removal of barriers should require the elimination of all age-based restrictions from Commonwealth workers’ compensation legislation. However, given the potential cost implications and unintended consequences for other workers in receipt of workers’ compensation benefits, the ALRC considers it may be necessary to take a three-tiered approach to reform. First, retirement provisions should be legislatively tied to Age Pension age. Secondly, the ALRC asks whether incapacity payment periods should be extended. Thirdly, the ALRC asks whether workers over Age Pension age who can prove that, had they not been injured, they would have continued to work should receive a supplementary payment.
The second part also discusses the inconsistent coverage of volunteers under workers’ compensation and the treatment of superannuation payments in the calculation of workers’ compensation incapacity payments.
Proposal 3–1 Safe Work Australia and state and territory work health and safety regulators should consider health and safety issues that may affect mature age workers in implementing the Australian Work Health and Safety Strategy 2012–2022.
Proposal 3–2 Safe Work Australia should include work health and safety issues that may affect mature age workers in its research agenda.
Proposal 3–3 Safe Work Australia and state and territory work health and safety regulators should develop guidance material to assist persons conducting a business or enterprise, workers, and the representatives of each to respond to health and safety issues that may affect mature age workers. Such material should contain information about:
(a) legislative responsibilities and duties;
(b) best practice work design and processes;
(c) risk assessment; and
(d) health and wellbeing.
Proposal 3–4 Safe Work Australia should recognise best practice approaches in work health and safety with respect to mature age workers in its Safe Work Australia Awards.
Proposal 3–5 The Australian Government should amend the Safety, Rehabilitation and Compensation Act 1988 (Cth), Military Rehabilitation and Compensation Act 2004 (Cth) and the Seafarers Rehabilitation and Compensation Act 1992 (Cth) to ensure that retirement provisions are tied to the qualifying age for the Age Pension.
Proposal 3–6 The Australian Government should amend the Seafarers Rehabilitation and Compensation Act 1992 (Cth) to provide that workers who are injured at any age after two years prior to Age Pension age may receive incapacity payments for up to 104 weeks.
Question 3–1 Should the Australian Government amend the Safety, Rehabilitation and Compensation Act 1988 (Cth), Military Rehabilitation and Compensation Act 2004 (Cth) and the Seafarers Rehabilitation and Compensation Act 1992 (Cth) to provide that in circumstances where a worker is injured after two years prior to Age Pension age, he or she should receive incapacity payments for a period longer than 104 weeks?
Question 3–2 Should the Australian Government introduce a supplementary payment for mature age workers similar to the one provided for under the Workers’ Rehabilitation and Compensation Act 1988 (Tas)?
Proposal 3–7 Safe Work Australia’s Strategic Issues Group on Workers’ Compensation should consider the definition of ‘worker’ under Commonwealth, state and territory workers’ compensation legislation to ensure consistency of coverage of volunteers.
Question 3–3 Does the treatment of superannuation payments in the calculation of incapacity payments under the Safety, Rehabilitation and Compensation Act 1988 (Cth) create a barrier to workforce participation for mature age workers? If so what, if any, changes should be made?
Chapter 4: Insurance
Chapter 4 examines the key concerns with respect to mature age workers and insurance that emerged during this Inquiry. These include: the availability of, and information about, insurance products for mature age workers; age-based limitations and premiums for some insurance products; and the relevance, transparency and accessibility of the actuarial and statistical data upon which age-based insurance underwriting and pricing occurs.
The ALRC is of the view that the Insurance Reform Advisory Group (IRAG) is the most appropriate body to consider many of these matters in more detail. Accordingly, the ALRC proposes that IRAG examine mechanisms for reviewing age-based underwriting and pricing processes and ensuring reliance on relevant and appropriate actuarial and statistical data. The ALRC also suggests that IRAG consider options for the development of a central information source to provide clear information about available insurance products and discuss the design of comprehensive and affordable insurance products tailored to meet the needs of mature age persons. The ALRC asks whether the General Insurance Code of Practice or similar industry standards or codes might usefully play a role in this area.
Chapter 4 also examines the operation of the insurance exemption under the Age Discrimination Act 2004 (Cth) (ADA). The ALRC asks whether, if retained in the course of the consolidation of Commonwealth anti-discrimination law, the exemption could be amended, for example, to limit its application. The ALRC also asks whether the powers of the Australian Human Rights Commission (AHRC) to request actuarial information from insurers are sufficient. The ALRC proposes that the AHRC and the insurance industry should develop guidance material about the application of any insurance exemption under the ADA or consolidated discrimination legislation.
Proposal 4–1 In April 2011, the Australian Government established an Insurance Reform Advisory Group. The group should examine:
(a) options for the development of a central information portal or source in order to provide mature age persons with clear and simple information about available insurance products;
(b) the design and redesign of comprehensive and affordable insurance products tailored to the needs and circumstances of mature age persons;
(c) mechanisms for reviewing age-based insurance pricing and underwriting across the industry;
(d) mechanisms for ensuring that the insurance industry utilises relevant and appropriate actuarial and statistical data upon which to make decisions about insurance offerings, based on age; and
(e) training of insurance distributers in order to facilitate the provision of clear and simple information about available insurance products.
Proposal 4–2 The Insurance Reform Advisory Group should keep a watching brief on developments in the insurance industry in relation to age, both in Australia and overseas, with a view to reviewing Australian insurance practices as the need arises.
Proposal 4–3 From 2012, the General Insurance Code of Practice is being reviewed by an independent reviewer. In the course of the review, the ways in which the Code could be amended to encourage insurers to consider the needs and circumstances of mature age persons should be examined.
Question 4–1 In addition to the General Insurance Code of Practice, are there other industry standards or codes that should be reviewed in order to encourage insurers to consider the needs and circumstances of mature age persons? For example, the Financial Services Council Code of Ethics and Code of Conduct?
Question 4–2 In the course of the consolidation of federal anti-discrimination legislation, the Australian Government is considering the operation of the insurance exemption under the Age Discrimination Act 2004 (Cth). If the specific exemption is retained, what changes, if any, should be made? For example, should:
(a) the application of the exemption be limited in some way;
(b) there be provision for an individual to request and receive the actuarial or statistical data on which the action or decision was based; or
(c) clarification be provided as to what are ‘other relevant factors’?
Question 4–3 Is the power of the Australian Human Rights Commission under s 54 of the Age Discrimination Act 2004 (Cth) sufficient, or should there be some other mechanism for requesting or requiring the actuarial or statistical information relied upon by insurers seeking to invoke the insurance exemption?
Proposal 4–4 The Australian Human Rights Commission, in consultation with the Insurance Council of Australia and the Financial Services Council, should develop guidance material about the application of any insurance exemption under the Age Discrimination Act 2004 (Cth) or consolidated anti-discrimination legislation.
Chapter 5: Social Security
Chapter 5 makes a number of proposals to address aspects of the social security system that may act as barriers to work for mature age persons. The ALRC proposes that the methods for communicating information about social security payments and entitlements to mature age persons be evaluated, and that staff of employment services providers receive training in the barriers to work faced by mature age persons.
In relation to specific income support payments, the ALRC invites comment on the possible effects on workforce participation of changes to the income test withdrawal rate for mature age Newstart Allowance recipients. Comment is also sought on the ways in which the review process for qualification for the Disability Support Pension may create barriers to mature age participation in the workforce or other productive work. The ALRC proposes that a more flexible interpretation to combining care with work, education, training or voluntary work be taken when assessing qualification for Carer Payment. The ALRC also proposes that the Work Bonus amount for Age Pension and Veterans’ Age Service Pension be indexed, and that Pensioner Education Supplement be extended to recipients of Age Pension and Veterans’ Age Service Pension.
Proposal 5–1 The Department of Human Services should evaluate the effectiveness of its methods for communicating information to mature age persons about social security. In its evaluation, it should consider the communication of information about:
(a) eligibility for income support payments;
(b) participation obligations for activity-tested payments, including information about the circumstances in which exemptions from the activity test may be available;
(c) how to calculate the effect of taking up paid work on income support payments, for example through online rate calculators; and
(d) incentives to take up paid work, for example through Working Credit, Work Bonus, the employment income nil rate period and retention of concession cards.
Proposal 5–2 To enhance the capacity of Job Services Australia, Disability Employment Services and Indigenous Employment Program staff to respond to the needs and circumstances of mature age job seekers, the Department of Education, Employment and Workplace Relations should ensure they are provided with information about:
(a) age discrimination, including what constitutes ageist behaviour;
(b) the effect that illness, disability and caring responsibilities may have on mature age persons’ capacity to work;
(c) the ways in which barriers to work for mature age persons may be affected by gender, cultural and linguistic diversity, Aboriginal and Torres Strait Islander status, and sexual orientation; and
(d) Australian government programs targeted at increasing mature age workforce participation.
Question 5–1 In what other ways, if any, could the Australian Government’s employment services system be improved to provide better assistance to mature age job seekers?
Question 5–2 The ‘withdrawal’ or ‘taper’ rate for an income support payment operates to reduce gradually the rate at which a payment is made as income or assets increase. What effect, if any, would changing the income test withdrawal rate for Newstart Allowance recipients aged 55 years and over have on their incentives for workforce participation?
Question 5–3 In what ways, if any, does the review process for qualification for the Disability Support Pension create barriers to mature age participation in the workforce or other productive work? For example, does the lack of information about how Disability Support Pensioners are selected for review act as a disincentive to work?
Proposal 5–3 The Guide to Social Security Law should provide that a temporary cessation of constant care due to participation in employment, voluntary work, education or training that exceeds 25 hours per week:
(a) does not result in automatic cancellation of Carer Payment; and
(b) may, in some circumstances, be compatible with the constant care requirement for qualification for Carer Payment.
Proposal 5–4 The Guide to Social Security Law should provide examples of situations where participation in employment, voluntary work, education or training that exceeds 25 hours per week may be compatible with the constant care requirement for Carer Payment. These examples should include:
(a) employment, voluntary work, education or training undertaken at home, for example online, provided it is consistent with the care receiver’s need for frequent personal care or constant supervision; and
(b) short term increases in excess of 25 hours per week of employment, voluntary work, education or training undertaken outside the home.
Proposal 5–5 The objective of Work Bonus is to provide incentives for recipients of Age Pension and Veterans’ Age Service Pension to continue in employment. To ensure that Work Bonus continues to achieve its objective, the following amounts should be indexed to the Pensioner and Beneficiary Living Cost Index:
(a) the income concession amount under s 1073AA of the Social Security Act 1991 (Cth) and s 46AA of the Veterans’ Entitlements Act 1986 (Cth); and
(b) the maximum unused concession balance under s 1073AB of the Social Security Act 1991 (Cth) and s 46AC of the Veterans’ Entitlements Act 1986 (Cth).
Proposal 5–6 Pensioner Education Supplement is a payment to assist in meeting the costs of study in eligible secondary or tertiary courses. Section 1061PJ of the Social Security Act 1991 (Cth) should be amended to provide that Age Pension and Veterans’ Age Service Pension are payments attracting Pensioner Education Supplement.
Chapter 6: Family Assistance and Child Support
Family assistance and child support laws may be relevant to mature age persons, in particular when they raise grandchildren. Specific barriers to work for mature age persons within these laws have not been identified. Consequently, the ALRC does not propose reforms to child support or family assistance laws. Chapter 6 discusses two family assistance payments that the ALRC has given particular consideration: Child Care Benefit and Child Care Rebate. Both payments have specific policy objectives relevant to this Inquiry.
Chapter 7: Income Tax
Personal income tax laws may affect workforce participation, including for mature age cohorts. Addressing this issue requires consideration of systemic reforms to the tax system—a task beyond the scope of this Inquiry. The Tax Review has previously recommended cohesive tax reform with a view to incentives for workforce participation. Chapter 7 discusses several aspects of the income tax system that may be pertinent to mature age workforce participation and notes relevant Tax Review recommendations.
Chapter 8: Superannuation
Superannuation laws contain a number of age-based rules regarding the accumulation of, and access to, superannuation. Chapter 8 examines these restrictions and explores whether they affect mature age workforce participation. The ALRC outlines two main directions for potential reform. First, the ALRC proposes the removal of age-based rules restricting superannuation accumulation. The proposed reforms aim to address the messages these rules convey about retirement expectations. Secondly, the ALRC questions whether the age-based rules regarding access to superannuation benefits are appropriately set to facilitate mature age workforce participation—particularly given contemporary trends regarding increased longevity, improved health and the nature of work.
Proposal 8–1 Regulation 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) restricts superannuation funds from accepting voluntary contributions for members of superannuation funds:
(a) aged 75 years and over; and
(b) aged 65 years until 75 years, unless they meet a work test, that is, where they are gainfully employed on at least a part-time basis during the financial year.
The Australian Government should amend reg 7.04(1) to remove the restriction on voluntary contributions for members aged 75 years and over, and to extend the work test to these members.
Question 8–1 Regulations 7.04(1) and 7.01(3) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) stipulate a work test for members of superannuation funds aged 65 years and over who wish to make voluntary superannuation contributions. Members must be gainfully employed on at least a part-time basis during the financial year, that is, for a minimum of 40 hours over a consecutive 30-day period. What changes, if any, should be made to the work test? For example, should the minimum hours of work be increased and, if so, over what period?
Proposal 8–2 Section 290-80 of the Income Tax Assessment Act 1997 (Cth) provides that voluntary superannuation contributions made by employers for employees aged under 75 years are tax deductible. The Australian Government should amend s 290-80 to enable employers to claim deductions for voluntary contributions made for employees aged 75 years and over.
Proposal 8–3 Section 290-165(2) of the Income Tax Assessment Act 1997 (Cth) provides that superannuation contributions made by self-employed, and substantially self-employed, workers aged under 75 years are tax deductible. The Australian Government should amend s 290-165(2) to enable these workers to claim deductions for contributions made at age 75 years and over.
Proposal 8–4 Regulation 7.04(1) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) restricts superannuation funds from accepting spouse contributions when the spouse is:
(a) aged 70 years or over; and
(b) aged from 65 years until 70 years, unless he or she meets a work test, that is, being gainfully employed on at least a part-time basis during the financial year.
The Australian Government should amend reg 7.04(1) to enable a member of a superannuation fund to make contributions for a spouse aged 70 years or over, when the spouse meets the work test.
Proposal 8–5 Regulation 6.44(2) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) provides that an application for spouse contribution splitting is invalid if the member’s spouse is aged 65 years or over, or has reached superannuation preservation age and retired. The Australian Government should amend reg 6.44(2) to remove the age restriction from age 65 years when the spouse meets a work test, that is, being gainfully employed on at least a part-time basis during the financial year.
Proposal 8–6 Section 6(1)(e) of the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (Cth) provides that government co-contributions are payable only for persons aged under 71 years. The Australian Government should repeal this restriction.
Proposal 8–7 The ‘Transition to Retirement’ rules were introduced into the Superannuation Industry (Supervision) Regulations 1994 (Cth) to encourage continued mature age workforce participation. Research has suggested that the rules may not meet this policy objective in practice. The Australian Government should initiate a review of the Transition to Retirement rules to determine what changes, if any, are required to ensure that the rules meet their policy objective. The review should consider matters including:
(a) the use of the rules in practice;
(b) whether there is sufficient and widespread access to the scheme;
(c) the relationship to the setting of the concessional superannuation contributions cap;
(d) eligibility criteria; and
(e) comparable international schemes.
Question 8–2 The Australian Government has legislated two key changes to the retirement income system: the superannuation preservation age will increase from 55 to 60 years between 2015 and 2025; and the Age Pension age will increase from 65 to 67 years between 2017 and 2023.
Should the preservation age be increased beyond 60 years? For example, to:
(a) 62 years—maintaining the five-year gap between the Age Pension age and the preservation age; or
(b) 67 years—aligning the preservation age with the Age Pension age?
Question 8–3 The age for tax-free access to superannuation benefits is set at 60 years. Should this age setting be increased:
(a) to align with any further increase to superannuation preservation age (that is, beyond 60 years); or
(b) instead of any further increase to preservation age—for example, to:
(i) 62 years—maintaining the five-year gap between the Age Pension age and the tax-free superannuation access age;
(ii) 65 years—aligning the tax-free superannuation access age with the unrestricted superannuation access age; or
(iii) 67 years—aligning the tax-free superannuation access age with the Age Pension age?
Chapter 9: Migration
Australia’s skilled migration policy is designed to target migrants with skills for which there is a shortage in the Australian labour market. The skilled migration program is selective and discriminates between applicants on the basis of a range of criteria, including age, to determine which applicants are likely to make the greatest economic contribution. While such an approach does not necessarily sit easily with the position under Australian law—that discrimination on the basis of age is unlawful—the ALRC does not propose reforms in this area.
The focus of the Terms of Reference for this Inquiry is on Commonwealth legislation and related legal frameworks that impose limitations or barriers that could discourage mature age persons from participating in the workforce or other productive work. The failure by an applicant to obtain a skilled visa is not primarily a limitation or barrier to participation in the workforce, but rather is a barrier to entering or remaining in Australia for the purposes of work.
The ALRC is informed by stakeholder submissions emphasising that: there are policy reasons for retaining age as a criterion; there are a range of skilled visa options for potential migrants, only some of which contain age restrictions, and points tests and exemptions operate to the benefit of highly skilled applicants regardless of age; and the Australian Government’s priority should be on developing an Australian skilled labour supply.