Superannuation law may discourage older workers from staying in the workforce

A new Issues Paper from the Australian Law Reform Commission has suggested that current superannuation laws be re-examined if older workers are to remain in the workforce. 

Disincentives, such as restricting older workers from adding to their super funds, and controlling the age at which they can access their super entitlements, may discourage workforce participation. The paper states that “there are a number of age-based rules in superannuation law, providing when members can access their superannuation, and restricting the accumulation of superannuation for older persons when they reach certain ages.” These may constitute “a ‘pull’ to early retirement if age-settings are too low,” or serve to “‘push’ older persons from employment due to the messages conveyed about retirement expectations.”

The issue of retaining older workers is becoming more pressing as Australia’s population continues to age, with almost one in four Australians expected to be 65 years or older by 2044-45. This will mean increasing demand for services such as health, aged care and social security.

The paper, Grey Areas – Age Barriers to Work in Commonwealth Laws, was released on 1 May 2012 to form a basis for consultation for the Age Barriers to Work Inquiry. The inquiry was announced in February by Attorney-General Nicola Roxon, and is intended to identify these barriers, and consider reforms to address them in Commonwealth laws, including social security, superannuation, insurance, compensation and employment.

Read more about this story in The Australian.

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