Attachments

A: Overview of selected FaCS payments
B: Trends in the proportion of mature age people in selected countries
C: Will structural ageing improve employment among mature age people?
D: Footprints to the future:Summary report from the Prime Minister's Youth Pathways Action Plan Taskforce
E: Australians Working Together
F: Government programs mentioned in the submission
G: Concessions and allowances for pensioners and self-funded retirees
H: Reasons for ceasing last full-time job

Attachment A: Overview of selected FaCS payments

Age Pension

The Age Pension is a means tested safety net payment for older people who are unable to fully provide for themselves in retirement.

Age Pension is funded from general taxation revenue and there is no explicit tax or contribution required. It is a flat-rate payment. In other words, the same basic rate of pension is the starting point for calculation of a pensioner's Age Pension payment, regardless of previous earnings. Neither receipt of, nor rate of payment of Age Pension is linked to previous workforce participation. In this way, Age Pension is potentially available to the entire Australian community of Age Pension age (subject to residence qualifications), including those with marginal connections to the workforce, or no previous employment history.

Age Pension is thus the fundamental building block of Australia's retirement income system, in that it provides the foundation that the compulsory and voluntary superannuation pillars, and voluntary earned income build on. Age Pension provides a critical 'safety net', assisting those who have not been able to accumulate sufficient superannuation and other savings.

At 30 March 2002 there were 1.8 million age pensioners. Age Pension can be paid to people over Age Pension age (65 for men and, currently, 62⁸ for women). Generally a person must be an Australian resident, and residing in Australia, to be granted the Age Pension. However, in certain circumstances, a pension may be granted to a former Australian resident who lives in a country with which Australia has a social security agreement.

Notwithstanding the progress made in expanding superannuation coverage, the Age Pension is a major provider of retirement income for the majority of Australians. At March 2002 around 82 per cent of people aged 65 or over received an Age Pension, service pension, or an income support supplement. 66.5 per cent of age pensioners receive the maximum rate of pension (ie, they have private income and assets below the means test free areas). 33.5 per cent of age pensioners receive a part-rate pension because of their income or assets (Centrelink customer data March 2002). Of age pensioners granted in the last 12 months, 51.8 per cent received a full-rate pension and 48.2 per cent received a part-rate pension (Centrelink customer data March 2002).

The rate of Age Pension is adjusted every March and September in line with movements in the Consumer Price Index. Payment rates are also indexed in line with wages growth; the maximum single rate of pension is maintained at (at least) 25 per cent of Male Total Average Weekly Earnings, with flow-ons to the partnered rate. Pensioners are therefore protected against price increases, and also share in improvements in community living standards, as measured by wages.

Maternity Allowance

Maternity Allowance is a one-off payment to help with the extra costs of a new baby and is claimed from the Family Assistance Office. To be eligible recipients must:

have a newborn child or have care of a newborn child, or
have a stillborn child or a child who dies shortly after being born, and
be eligible for Family Tax Benefit Part A within 13 weeks of the child's birth or of the child being entrusted to your care, and
have family income below a certain limit.

Maternity Immunisation Allowance

This is a one-off payment provided to parents who fully immunise their children by the child's 19th month. It is claimed from the Family Assistance Office. To be eligible recipients must:

receive Maternity Allowance at the time of the baby's birth or be receiving Family Tax Benefit Part A when the child is aged 18 to 24 months
ensure the child is fully immunised at 18 to 24 months, or
be on a recognised catch-up schedule, or
have a valid exemption from the immunisation requirement (such as for medical reasons or a parent's/carer's conscientious objection).

Parenting Payment

This payment provides financial help for people who are primary carers of children. Parenting Payment can only be paid to one person who cares for a child. To be eligible recipients must:

be caring for a dependent child aged under 16
have income and assets below a certain amount, and
be an Australian resident.

Recipients who are eligible for Parenting Payment (Single) may also be eligible for a PCC and Pharmaceutical Allowance.

Family Tax Benefit (A)

Family Tax Benefit Part A is a payment to help families with the cost of raising children. To be eligible recipients must:

have a dependent child up to and including the age of 20 (who does not get Youth Allowance or a similar payment), or
have a dependent full-time student aged 21 to 24 years (who does not get Youth Allowance or a similar payment), and
earn income under a certain amount.

Recipients with four or more children, will also get a Large Family Supplement. A Multiple Birth Allowance can also be added to the Family Tax Benefit if the recipients have triplets, quadruplets or more. This allowance is paid until the child turns six years.

Family Tax Benefit (B)

Family Tax Benefit Part B is designed to provide extra assistance to single income families, including sole parents, especially families with a child under five years.

Family Tax Benefit Part B gives extra assistance if recipients have:

a family that has one main income, including sole parents, and
a family that has dependent children under 16 (or up to 18 if they are the youngest qualifying child and undertaking full-time study and not in receipt of Youth Allowance or similar payment).

Sole parents receive the maximum rate of Family Tax Benefit Part B, regardless of income.

Child Care Benefit

Child Care Benefit is intended to help with the cost of child care for long day care, family day care, occasional care, outside school hours care, vacation care and registered care.

The amount recipients receive depends on:

the weekly number of hours the child is in care and the type of care used
whether the recipients are caring for someone, studying or training, looking for work, doing voluntary or community work, or have a disability
the school status of the relevant children, and
family income (for approved child care only).

If an approved child care service is used, Child Care Benefit is paid directly to the service to reduce the fees charged. Alternatively, recipients may choose to pay full child care fees and claim the Child Care Benefit as a lump sum after the end of the financial year.

If registered care is used, Child Care Benefit is paid directly to the recipient on presentation of appropriate child care receipts.

Baby Bonus

The Baby Bonus is a Commonwealth Government initiative helping families when they have a baby. If recipients had a baby, or gained legal responsibility for a child aged under five, they are eligible for the Baby Bonus.

The bonus is paid whether or not recipients are eligible for any other family benefits. There is no upper limit on taxable income when getting the Baby Bonus.

Many families will be entitled to an annual amount of $500, although this will be less in the first year, calculated from the baby's date of birth (or the date legal responsibility began). Some families will be entitled to a higher amount.

Disability Support Pension

The DSP is a payment for people whose physical, intellectual or psychiatric impairment prevents them from working, and for people who are permanently blind. To qualify for a DSP, a person must:

have a disability, illness or injury which attracts an impairment rating of at least 20 points on the impairment tables (see note below) and be unable to work full-time (or be retrained for full-time work) for at least two years because of a disability, illness or injury (full-time work means work for at least 30 hours a week at award wages), or
be permanently blind
be aged at least 16, but less than Age Pension age on the day the claim is made, and
meet residence requirements.

Note: Impairment tables are computer-based tables that rate a person's impairment according to the severity of medical conditions and how they affect their ability to work. Impairment tables are completed by Centrelink staff using information provided in medical reports and details provided by customers.

Rent Assistance

Rent Assistance provides recipients with extra assistance if renting privately. To qualify for Rent Assistance recipients must:

receive a pension
receive more than the base rate of Family Tax Benefit if they have dependent children
receive an allowance or benefit if they don't have dependent children, and
be over the age of 25, or
are partnered, or
are under 25 (under 21 if receiving DSP) and living permanently or indefinitely apart from parents or guardians, and
meet residence requirements.

Those in receipt of Austudy Payment are not eligible for Rent Assistance.

Newstart

Newstart Allowance provides unemployed people with help while they are looking for work and allows participation in activities designed to increase their chances of finding work. To qualify for Newstart Allowance recipients must:

be aged 21 or over and under Age Pension age
be unemployed
have income and assets under a certain amount
be prepared to enter into, comply with or vary an existing Preparing for Work Agreement, and
satisfy the Activity Test and Mutual Obligations, and
meet residence requirements.

Transition to Work Allowance

Transition to Work offers practical help, such as training and funding to help recipients develop skills. The assistance package is tailored to suit individual needs.

Transition to Work has been developed for parents, carers and mature age people 50 years and over who are starting work for the first time or are returning to work after an absence of two years or more. Recipients do not have to be receiving another payment but must:

be looking for paid work
have been out of the workforce for over two years, or
have not been in paid employment for more than 15 hours a week for more than 13 weeks in each of the past two years, and
be a parent, someone who has been caring for others, or a mature age person 50 and over.

Pension Bonus Scheme

The Pension Bonus Scheme provides a tax-free lump sum for people who defer claiming Age Pension and continue to work. To be eligible for the Pension Bonus Scheme, recipients must defer receipt of the Age Pension for at least one year and work at least 960 hours each year of deferment. The amount paid depends on how long recipients deferred claiming the Age Pension, the rate of pension claimed and marital status.

Attachment B: Trends in the proportion of mature age people in selected countries

Within the population (aged 20 to 64), Australia will experience an increase in the percentage of people aged 50 to 64, from 27.7 per cent in 2003 to 33.3 per cent by 2023 (see Figure 14). This increase will stabilise between 2023 and 2043, to 33.5 per cent. This trend is similar to countries such as the United States and the United Kingdom, with Australia having the second lowest percentage of older workers by 2043 among the countries listed in Figure 14.

Figure 14: Percentage of mature age (50 to 64 years) population to working-age (20 to 64 years) population, 2003-2043

Source: US Census Bureau (2002).

Attachment C: Will structural ageing improve employment among mature age people?

The report by Access Economics, Population Ageing and the Economy (2001) suggests that projected tightening of labour markets (driven by slower workforce growth, and stimulated by the spending of retiring 'baby boomers') could absorb into jobs some people who would otherwise be unemployed. The report concludes that an important strategy to offset the adverse effects of structural ageing is the promotion of higher employment participation among older workers. The report notes that higher participation could have substantial benefits for individuals and the economy, including:

Higher standard of living: Higher workforce participation would mean per capita annual incomes would increase by around 4 per cent. Higher participation appears achievable—research indicates three out of five workers who faced mandatory retirement wanted to keep working.
Reduced Commonwealth fiscal burden: Higher workforce participation could largely cancel out any negative effects of an ageing population. The older Australians who would keep working would keep paying taxes instead of receiving pensions. The boost to public coffers could be $8 billion a year. The benefits to health care spending could also be large. Employed people are, on average, healthier than people out of employment. The causality runs in both directions—the ill find it harder to get jobs, and people in jobs are healthier because of the increased exercise and social activity that work brings.
After a lag, reduced unemployment: Wages earned and demand generated by more working older Australians would increase the growth rate of the economy, generating more jobs. Enough jobs would emerge to employ all extra working older Australians and reduce unemployment among the young. For every four older Australians remaining in the workforce, there would be one additional unemployed person, a net gain of three jobs. But, according to the report, this effect passes. An increasing labour supply is like pressing the accelerator—there is a lag as the speed of the car gradually increases up to the new level. Once the slack has been taken up, large benefits flow through.

FaCS notes that the actual benefit unemployed older people derive from structural ageing will depend on several factors. On the one hand, the baby boom cohort, being better educated, may fare better in the labour market than older workers did in previous structural changes (eg. industry and tariff restructuring). The sheer growth in the number of older people of labour market age may also shift community, business and political attitudes in favour of their participation. On the other hand, their participation may be reduced by incentives for early retirement; skill levels potentially out of kilter with labour demand; negative attitudes among some public and private employers to hiring older people; and expectations of older people themselves about their retirement plans.

Attachment D: Footprints to the future: Summary report from the Prime Minister's Youth Pathways Action Plan Taskforce

The Youth Pathways Action Plan Taskforce was set up by the Prime Minister in September 1999. Members of the Taskforce were asked to suggest better ways of supporting young people and their families in the changeover from being students at school to having an independent adult life.

The Taskforce included people from non-government organisations who work with young people, employers, researchers and representatives from Commonwealth and state government departments. Some Taskforce members were specifically chosen as representatives of Indigenous Australians, and of young people themselves.

The Taskforce organised public consultations around Australia, conducted surveys of young people and their parents, received written submissions, organised case studies and commission special research. From this, the Taskforce made 24 recommendations to government, which it hopes will be supported by Commonwealth, state, territory and local governments as well as the community sector.

Attachment E: Australians Working Together

The AWT package, announced in the 2001-02 Federal Budget, provides improved personalised assessment and service; more opportunities for training and work experience; and better incentives and reasonable requirements for people to find work, increase their earnings, or contribute to their communities.

A Fair Go for Mature Age People

New funding through A Fair Go for Mature Age People, encompassing AWT measures affecting mature age people, provides people receiving Newstart, Mature Age, Partner and Widow allowances, access to Centrelink Personal Advisers and referral to other services (such as the Language, Literacy and Numeracy Programme and the Personal Support Programme) and provides flexible activity requirements.

In accordance with the focus on providing better access to payments and services to help customers engage with the workforce and community, access to Mature Age and Partner Allowance will be closed, with most people who would have claimed those payments granted access to Newstart Allowance.

A better deal for people with disabilities

As part of the AWT package, in September 2002 Centrelink introduced improvements to the way in which claims are accessed for DSP and Newstart Allowance (incapacitated). There will be increased use of external expertise to assess people's capacity to work, and referral to early intervention and assistance for people at high risk of claiming DSP.

More help for parents to return to work

To help parents commence planning for a return to work well before they lose eligibility for Parenting Payment when their youngest child turns 16, AWT contains measures such as a yearly interview with a Personal Adviser; information for parents on the benefits of going back to work, ways to manage family and work; and tips about how to look for work or take on study, training or volunteer work. The successful Jobs, Education and Training Program is still available, on a voluntary basis, to parents who are not required to attend annual interviews under the AWT measure. From July 2003 parents with a youngest child aged 13 to 15 will be required to complete up to 150 hours of Centrelink approved part-time activity over each six months (averaging six hours a week).

Help to participate

The Language, Literacy and Numeracy Programme assists people to improve their English language, and/or literacy and basic maths skills, and a supplement is provided to assist with the incidental costs of undertaking this training.

The Working Credit will encourage workforce-age people on income support to take up full-time, substantial part-time or irregular casual work by allowing them to keep more of their income support payment while working. It will be implemented from 28 April 2003, subject to the passage of legislation.

Helping people find jobs

Mature age people are now able to access Job Search Training as soon as they start receiving income support; a Training Account to help get work-related skills; and a new Transition to Work program which brings together a range of individual and flexible transitional assistance for people who have been away from the workforce for a long time, and for those who have never had paid jobs. This builds on the Jobs, Education and Training and the Return to Work programs that have been helping people, particularly women and mature age people, return to paid work after long absences.

Getting people the right help

The Personal Support Programme helps those people on payments who have severe personal obstacles to work, such as those suffering from homelessness, drug or alcohol addiction, mental illness and domestic violence.

Attachment F: Government programs mentioned in the submission

The Family and Community Network Initiative

The Family and Community Network Initiative is a four-year pilot project which aims to improve access to family-related information and services for families and community organisations. It also aims to enhance the capacity of communities and services to work together more effectively to address the needs of families and communities.

From 1 July 2002, the Family and Community Network Initiative was extended, with funding of $8.5 million over four years. The program will provide funding for:

long-term community capacity-building projects. The projects will strengthen the community by improving access to information about community and family services available within each community
one-off projects that contribute to information access and community networks.

Prime Minister's Community Business Partnership

Aims to encourage and facilitate partnerships between businesses and the communities of which they are a part and to develop and promote a culture of corporate social responsibility in Australia.

Reconnect Program

An early intervention program improving the level of engagement in family, work, education and the community by young people who are homeless, or at risk of homelessness, and their families. By the end of June 2002, FaCS had approved the establishment of 93 Reconnect services. Of these, 89 are operational with the remaining services expected to be operational from July 2002. When fully operational, Reconnect will provide 100 services with 7000 young people and 5000 parents being assisted per year.

Traditional Credit Union

Banking or credit facilities in many remote communities are limited or non-existent.

This creates many problems for Aboriginal people who are largely welfare dependent and reliant on payment by cheque. For example, banks are staffing their facilities on the basis of the increased use of online services, including Internet and telephone banking which means fewer staff to assist customers in person. Aboriginal people from the bush are therefore disadvantaged when they come to 'town'.

In the Northern Territory, a Traditional Credit Union has been established in response to these issues. This agency was developed by the Arnhem Land Progress Association and now operates successfully in six Top End communities.

The Cape York Family Income Management project

The Cape York Family Income Management project, funded under the SFCS, helps families in Aurukun, Coen and Mossman Gorge make the most of their income as a group to improve living standards and achieve other goals. Eighteen local people are training as family facilitators to help people to manage their money and negotiate family agreements. Community representatives, the Cape York Partnerships Office, Westpac Bank and four Commonwealth and state departments are overseeing the project.

Indigenous Parenting and Family Well-Being Program

The Indigenous Parenting and Family Well-Being Program has $1.7 million per annum to assist and enhance development of Indigenous parenting and family programs. This program is being transferred from the Department of Health and Aged Care to FaCS.

Stronger Families and Communities Strategy

The Commonwealth Government's SFCS was announced in April 2000. The Strategy commits $240 million over four years to prevention and early intervention initiatives for Australian families and communities. As part of the Strategy, the Stronger Families Fund will encourage communities to find new ways to strengthen families, with a focus on early childhood and effective parenting.

Supported Accommodation Assistance Program

Since 1985, under bilateral agreements, the Commonwealth Government and the state/territory governments have jointly funded the Supported Accommodation Assistance Program. The program provides transitional support and accommodation to homeless people and those at risk of homelessness to help them achieve self-reliance.

Attachment G: Concessions and allowances for pensioners and self-funded retirees

The Commonwealth provides a range of benefits to individuals in addition to income support payments. Changes in recent years have broadened the availability of assistance to people not eligible for the Age Pension.

Pensioner Concession Card

The PCC is issued to persons receiving a pension including Age Pension, DSP and Parenting Payment (Single), Mature Age Allowance, Mature Age Partner Allowance and Bereavement Allowance. The PCC is also issued to people over 60 who have been getting the Newstart Allowance, Sickness Allowance, Widow Allowance, Partner Allowance, Parenting Payment (Partnered) or a Special Benefit continuously for the previous nine months. In addition, PCC holders receive Pharmaceutical Allowance and may also receive Telephone Allowance (TAL) as add-ons to their main payment.

Commonwealth Seniors Health Card

The CSHC targets self-funded retirees of Age Pension age (currently 62 years for women and 65 years for men) who meet certain eligibility criteria, that is:

the person is not receiving another income support payment from Centrelink or the Department of Veterans' Affairs
the person meets an income test of under $50 000 a year (single person) or $80 000 a year (couple, combined income), and
they are an Australian resident.

The Government announced in 2001 that the Commonwealth would negotiate with state and territory governments to extend some or all of the concessions currently available to pensioners to holders of the CSHC.

Commonwealth and state concessions

The Commonwealth has arrangements in place with the states to ensure that all pensioners receive certain 'core' concessions (council, water and sewerage charges, electricity, motor vehicle registration and public transport). This is done through an annual Specific Purpose Payment to all state and territory governments that ensures that all holders of the PCC receive these concessions without discrimination.

The agreement does not specify the level of concession that must be offered, as state and local governments determine these matters. The benefits obtained from concessions differ significantly between the states.

State government Seniors Cards

These cards are issued by each state to their residents who are (generally) aged over 60 and no longer working full-time. Eligibility varies slightly from state to state, and the benefits available are generally offered by the private sector, and may include travel, dining and entertainment, and financial products.

Some state governments also target a limited range of concessions at holders of state Government Seniors Cards however the Commonwealth has no influence over these concessions.

Rail Concessions

The Commonwealth funds Great Southern Rail (GSR) to provide concessions to PCC holders and CSHC holders on GSR services that were formally Commonwealth-owned. These services are the Indian Pacific, the Ghan, and the Overland. The concessions can range between $25 and $500 per journey.

Pharmaceutical Allowance

Pharmaceutical Allowance is paid to help pensioners and some allowees with the cost of certain prescriptions listed under the Pharmaceutical Benefits Scheme. Pharmaceutical Allowance forms part of the rate payable to all pensioners, Sickness Allowance recipients, certain allowance recipients with temporary incapacity exception from activity testing requirements, and long-term allowees who are over 60 years of age and have been receiving income support for at least nine months. The current rate of Pharmaceutical Allowance is $5.80 per fortnight for a single person; or $2.90 per fortnight for each member of an eligible couple.

Telephone Allowance

Telephone Allowance is a quarterly payment to assist with the rental of a domestic telephone or mobile phone line. To be eligible for TAL, a person must have a phone connection in their name or their partner's name, and be receiving either an eligible pension or allowance payment through Centrelink or the Department of Veterans' Affairs, or the CSHC.

The amount of TAL payable is dependent upon the person's circumstances. Both an eligible single person and an eligible couple receive the full amount of TAL ($18.00 per quarter), as the costs to rent a telephone line are the same for one person or a couple. Where only one member of the couple is receiving an eligible benefit, the allowance is paid at the half-married rate of $9.00 per quarter.

Rent Assistance

Rent Assistance is a supplementary benefit paid to Age Pension customers who pay private rent. Private rent includes caravan park site fees, mooring fees and some retirement village fees. People paying rent to a state or territory government housing authority for the rental of government housing or residing in Commonwealth funded aged care are not eligible for Rent Assistance.

Before Rent Assistance becomes payable, a minimum amount of rent (rent threshold) must be paid. Rent Assistance is then paid at 75 cents for every dollar of rent paid above the rent threshold, up to a maximum rate.

Attachment H: Reasons for ceasing last full-time job

Figure 15: Reason for ceasing last full-time job, 45 to 64 years, November 1997, involuntary retirement

Source: ABS (1999).

Figure 16: Reason for ceasing last full-time job, 45 to 64 years, November 1997, voluntary retirement

Source: ABS (1999).

Return to top