Posts Tagged “mature age jobs”

May 7, 2016
Paul Gilder Herald Sun

Events have combined to cast retiree nest eggs into the path of a financial tornado.
‘TOTO, I have a feeling we’re not in Kansas anymore.”

With those words Dorothy Gale, the heroine of cinema classic The Wizard of Oz, bravely takes her first steps into a foreign land full of uncertainty and risk.

Retirees and those soon to leave the workforce must be feeling a little like Dorothy this week after a run of events that have combined to cast their nest eggs into the path of a financial tornado.

The big banks set the scene as Westpac on Monday and ANZ a day later unveiled first-half earnings slumps and in ANZ’s case, a dividend cut, citing tough trading conditions and sending a shiver up the spine of yield-seeking investors.

It was the Reserve Bank’s turn on Tuesday, stealing the spotlight from Federal Treasurer Scott Morrison’s Budget by cutting the cash rate to an all-time low of 1.75 per cent in the war against deflation — leaving term deposit holders feeling even more unloved.

Perhaps the biggest whammy was in the Budget itself, with news of yet another overhaul to superannuation in the name of fairness and long-term fiscal repair.

Among changes set to be introduced from July next year, the annual cap on concessional — or pre-tax — contributions will be wound back from $30,000 to $25,000 for under-50s and $35,000 for over-50s.

For those earning $250,000 to $300,000, the tax rate on concessional contributions has been doubled to 30 per cent.

And the total a person can transfer into their pension fund — which attracts less tax than a super accumulation fund — will be capped at $1.6 million. It is estimated that those amendments will put an additional $2.9 billion into the government’s coffers over the next four years.

Combined, the revelations are turning the walk down the yellow brick road to a prosperous retirement into an arduous slog.

Remember, this is the generation who have been told that to be comfortable in their golden years, a couple aged around 65 will need to have about $59,200 a year to spend, while a single will need $43,100.

According to the Association of Superannuation Funds of Australia, a couple at 65 will need $640,000 to aspire to those annual sums, while a single will need $545,000.

Figures from the Australian Bureau of Statistics show men aged 55-64 have amassed on average $320,000 and women $180,000, while a household — which takes in the impact of single-occupant houses — has $400,000 in savings.

At those rates, many will be struggling to maintain that “comfortable” lifestyle well before their 75th birthdays, even with the benefits of the Age Pension.

Chant West head of research Ian Fryer says the gap is partly down to the relative immaturity of the compulsory super system, which has only been mandatory since 1992.

“It took a number of years for employer contributions to get to 9.5 per cent, so a lot of people nearing retirement aren’t going to get to those retirement savings levels,” Mr Fryer says.

While few are quibbling over the clamps intentionally being applied to the wealthy, economists are worried that more tinkering with super will further knock confidence in the system.

“The changes … still leave superannuation as highly tax preferred compared to alternatives,” AMP Capital chief economist Shane Oliver says.

“The concern though is that it will adversely affect the supply of patient long-term saving available to help grow the Australian economy.”

Respondents to the Westpac-Melbourne Institute’s consumer poll on the “wisest place for savings” has superannuation trailing the pack, favoured by less than 5 per cent.

Most favoured bank deposits, or paying down debt, while property was preferred by about one in five and shares about one in 10.

But the biggest long-term impact to wealth accumulation could yet come from interest rates.

The RBA also finds itself in a scary new world after official figures revealed Australia had joined the ranks of developed nations to suffer a bout of price deflation.

Announcing the RBA had taken the knife to the official interest rate this week, governor Glenn Stevens reasoned that “unexpectedly low” inflation — headline inflation was minus 0.5 per cent in the three months to March — was not to be dismissed lightly.

The hope is that in cutting rates, consumers will divert their mortgage savings back into the economy, and that extra demand will spur businesses to lift prices and reignite inflation.

But there is collateral damage, particularly for the reliable over-50s saver.

On hearing news of the rate cut, former Victorian premier and beyondblue founder Jeff Kennett labelled it a “disaster” for retirees.

“Low interest rates might be great news for homebuyers but for fixed income, more experienced Australians (who are) retired it is a disaster,” he tweeted.

Figures from RateCity.com.au, an online financial product broker, show the best term deposits on the market are offering about 3.3 per cent for one year, or about $6600 on a $200,000 deposit.

The big four banks are even stingier: rates of 2.3 per cent to 3.1 per cent are typical for anything up to five years.

“A lot of people are asking us where to park their savings when rates are low,” says RateCity money editor Sally Tindall.

“Online savings accounts are not offering a lot more than inflation, so the answer is often putting your money into a mortgage, which can be more productive in the long run.”

Mr Fryer says low returns have forced many people to take on more risk at a time when they have little recourse to recoup any heavy losses. For many, that means investing in Australian shares, and the big banks this week proved how stressful that path can be.

Lower rates, Mr Fryer says, can provide a sugar hit to shares but can also be a signal of difficult economic times to come.

Another obvious area of investment is property, after the government this week made good on its vow to leave negative gearing alone.

But Mr Fryer says would-be investors need to tread with caution.

“I’d be concerned if people were making investment decisions based on the current cash rate. They need to see if they can cope with higher repayments down the track.”

It seems that like Dorothy, anyone wanting to don a pair of ruby slippers in retirement might just need to do a little more legwork.

paul.gilder@news.com.au
Source: News.com

David Kazachov claims he has experienced ageism as a job seeker.David Kazachov claims he has experienced ageism as a job seeker. Photo: Nick Moir

After hitting the age of 45, David Kazachov started having trouble getting work.

“It is even worse at the age of 50,” he says.

When we say baby boomers are not good with technology and Generation Y don’t have enough experience, it becomes a self-fulfilling prophecy.

Associate Professor Leanne Cutcher

Despite extensive experience in the finance and IT industry, Mr Kazachov was surprised to be asked if he had a laptop after making it to the final stage of a recent job interview.

Robert De Niro showed old dogs sometimes have the best tricks in <i>The Intern</i>.Robert De Niro showed old dogs sometimes have the best tricks in The Intern.

Well, of course he did, but there seemed to be an assumption behind the question that he was too old to be savvy with computer technology.

But as it turns out, ageism in the workforce is built on a faulty premise, according to leading Australian researchers of intergenerational employment.

Associate Professor Leanne Cutcher from the University of Sydney Business School is about to publish a new study that has found that contrary to stereotypes and assumptions, the most innovative companies are the ones where the age of employees does not matter.

One health engineering company that had a young chief executive officer appointing 65-year-old workers to new roles leading projects was among companies the researchers found to be the most innovative.

The multinational company, Siemens Healthcare, recognised that people had valuable experience to offer at all stages of their career.

Michael Shaw, the company’s chief executive, said Siemens “takes the best people for the job”.

“Personally, for me it’s not important if the person is in their 20s or in their 60s, I am simply looking for the best minds with the best attitude”, Mr Shaw said.

Associate Professor Cutcher said the company had recognised that the idea that younger people lack experience and older people have too much of it “is a nonsense” and “stifles” the exchange of innovative ideas.

“Where age doesn’t matter, there is more innovation,” Associate Professor Cutcher says.

“When we say baby boomers are not good with technology and Generation Y don’t have enough experience, it becomes a self-fulfilling prophecy.

“Because people who have good ideas then don’t share them because they have been told they are too old.

“But you are just going to replicate the same ideas where you start labelling people as either too old or too young for a role. Where that is happening, it is stifling knowledge exchange.”

Associate Professor Cutcher said younger workers were positive about learning from older colleagues.

“We have this false idea that only young people can innovate and our research has found it has really big implications for the effectiveness of the organisations.”

“While there is robust evidence that older people can be part of a sustainable solution to job market challenges, existing and inaccurate perceptions of the Baby Boomer generation detract from the value of employing the over-50 population.”

Another new study to be released on Thursday by the Australian Seniors Insurance Agency reveals that age discrimination in the workplace is rife.

It found that close to half the Baby Boomer respondents claimed they have been turned down for a job since they turned 40.

The agency’s spokesman, Simon Hovell, said the study of 1200 people across Australia found three in five people over 50 said that they faced substantial obstacles in attempts to find a job.

More than two in five respondents said they felt stuck in rut because they felt a career change, opportunities or promotions were limited.

Baby Boomers said it took longer than six months to find a new job when making a career move. One in six said it took them five years or more to find a job.

Mr Hovell said Generation Y was costing up to $2.8 billion more than Baby Boomers a year to the Australian economy.

“Baby Boomers typically take three days sick leave on average per year, which doubles for Gen Y’s at an average of six days,” Mr Hovell said.

The research also found that more than three quarters of Baby Boomers adapt well to technological innovations, and 73 percent are actively seeking training opportunities.

“The findings point to what many organisations, academics and economists have known all along – Baby Boomers are a real asset to the workplace,” said Mr Hovell.

Source: SMH.com.au

April 15, 2016

A government pilot program is revealing Australia has a strong workforce of mature workers keen to remain productive.   Skills Checkpoint Pilot offers workers aged between 45 and 54 years a professional careers “health check” to evaluate their skills and experience in order to create a personalised career map of their future prospects.

Participants are also invited to attend online and offline workshops on training opportunities, the future jobs market, and recruitment trends for those looking at transitioning into new careers.

The whole process takes about six weeks, after which participants receive their career map defining ways to address skills gaps, listing suitable occupations and employment opportunities to suit their skillsets and information on training pathways and government programs relevant to their circumstances.

Pilot participant “Theresa,” who shoulders caring responsibilities for her disabled son, says her career map clarified the directions she could realistically pursue in the context of her circumstances.

“The pilot helped me realise I have a lot of transferrable skills applicable to local industries where flexible work practices are more commonplace than where I am working right now,” Teresa says.

“I am also better informed about government programs and assistance I am eligible for if I want to pursue further training – I feel more certain about my future options.”

So far, the Skills Checkpoint initiative is attracting a lot of interest from a workforce of mature Australians keen to remain productive, who are driven to generate an income to secure a comfortable retirement.

The average Australian healthy lifestyle expectancy is one of the highest in the world, due to improvements in health care and other technologies, while the age pension age for both men and women will hit 67 by mid-2023.

Meanwhile, the number of working people aged 15 to 64 in proportion to each of those aged 65 and over has dropped from 7.3 people in 1975 to around 4.5 people today.

It’s clearly an economic imperative that we do all we can to encourage mature Australians to contribute their experience and skill to the workforce.

This pilot recognises that many older people need advice on how best to do that, and I hope we can assist many people to realise their dreams.

To participate call 1300 073 612 or visit skillsroad.com.au/skillscheckpoint

Source:  Australian Ageing Agenda

Date: March 2, 2016 

Jenny Brice

Ageism at work is rife, but fear is stopping people from talking about it.

In the movie Intern, Ben Whittaker (Robert De Niro) takes on a job as a a senior intern at an online fashion site.

In the movie Intern, Ben Whittaker (Robert De Niro) takes on a job as a a senior intern at an online fashion site. Photo: Supplied

Breaking through the glass ceiling is relatively easy. I did it almost 20 years ago.                                                                                                                But no one told me about the glass trapdoor – that was the shock nothing in my                                                                                                             stellar career had prepared me for. At the age of 50 I left a job for family reasons                                                                                                                for a short while, but I faced hurdles when I tried to return to the workforce.                                                                                                                     My corporate stiletto had slipped straight through the glass trapdoor.                                                                                                                                       I simply hadn’t realised that in the modern workplace, 50 is considered old.

This is not a unique story. The tentacles of age discrimination reach into every                                                                                                                 facet of Australian society and nothing we are now doing is working. The government                                                                                               bribing companies to take on older workers by paying $10,000 an older employee has                                                                                                   been a dismal failure. Fewer than 3000 people are involved in a scheme that hoped to attract 32,000.

The government’s intergenerational report makes it clear that older workers must work longer.                                                                                       It is a financial imperative, as it will boost productivity. An extra 3 per cent participation rate in                                                                            workers over 55 is estimated to account for a $33 billion boost to Australia’s gross domestic product.

As an added incentive for older people to continue to work the pension age will go up.                                                                                                  From July 2025, the qualifying age to receive the age pension will continue to increase from                                                                                            67 years, by six months every two years, until it reaches 70 years in July 2035.

The fatal flaw in this grand strategy is that employers are reducing older workers from their                                                                               workforce at alarming rates. Once older workers have left a job, it becomes difficult to re-enter                                                                                      the workforce. If they do, they are often underemployed and unable to maintain their previous standard of living.

To add to the problem the definition of an older worker is getting younger. It appears to be going down in                                                                five-yearly increments. Forget 65 think 50 or even 45. For redundancy purposes if an employee is 45, they                                                                are defined as an older worker. They receive small extra payments for the privilege. They then enter the                                                                 world of unemployment where it takes an average of 72 weeks for them to re-enter the workforce in some capacity.

Workers are becoming so fearful of being classified as old they are spending big dollars on keeping                                                                 themselves looking younger. Research shows that one of the primary reasons women go under the                                                                    surgeon’s knife is to ensure employability in the workforce. As an executive coach and facilitator,                                                                        working in corporate Australia, I am aware of the level of fear. That fear is not only confined                                                                                             to women it just starts earlier for them.

The government has acknowledged employment discrimination may derail its plans. An inquiry, to be                                                                     released in July, has been established to identify what is required to keep older people in the workforce.                                                                  Let’s hope it packs a punch because it will have to be taken seriously if the government wants to deliver                                                                       on any number of economic outcomes.

I agree with Susan Ryan, the Age Discrimination Commissioner, that age discrimination is a social                                                                             and economic issue affecting a growing cohort of men and women. It caught government by surprise.

It is important to dispel the myths: Australians over the age of 50 do want to work. The issue is they                                                                         often cannot get a job after their employment has been terminated. The new jobs they are offered are                                                                       often casual or jobs that no one else wants.

Financial hardship is becoming an inevitable reality for this group of older Australians and it’s                                                                            affecting their health. Worryingly men, who have lost employment between 45 and 65, are one                                                                                       of the largest growing groups of people with mental health issues.

Staggeringly, there are more people over 50 on work-for-the-dole schemes than unemployed                                                                                   people below 22. Even more shocking there are now 210,000 Australians over the age of 50                                                                                         who are living off unemployment benefits. Serious intervention is required if for no other                                                                                        reason than self-interest. No amount of bribery, no amount of Botox, no amount of surgery                                                                                               is going to mask this problem any time soon.

It’s easy for the the government to get the data, change pensions policies and set up an inquiry.                                                                                       It is much more difficult to change a culture. This is challenging in Australia, as ageism in the                                                                                workforce is as rampant as it is silent. Silence can no longer be accepted.

It’s time for governments, employers and Australians to act. Unlike the suffragettes, or powerful images                                                                       of Ruby Bridges, the first black child to attend an all-white school in America, there has been no similar                                                           campaign or strong movement for the greying masses for anything to change.

Given the boost to profits, productivity and reduction on the burden of the aged pension, it is hard                                                                                 to understand why corporate Australia, state and federal governments and the Productivity Commission                                                                     are not rallying in the streets to make this happen.

Jenny Brice is an executive coach and a former HR director for several large Australian companies.

Age discrimination in the workforce is rampant, says a Gold Coast lawyer.

MATURE age workers are being exploited by unscrupulous Gold Coast business owners in record numbers.

 

According to leading legal figures the number of mature age workers seeking advice over illegal and demeaning treatment at the hands of employers has reached record numbers.

Litigation director with Gold Coast firm Parker Simmonds Solicitors and Lawyers, Bruce Simmonds, said he had at least 20 mature age workers suing their former employers for unfair dismissal.

He said age discrimination in the workforce was as rampant and cruel as ever and he believed the year ahead held no relief for mature age workers who felt they were treated like slaves.

“They are all late 50s or in their 60s, made redundant from previous jobs and needing to stay in the workforce,” he said. “There are agencies that score thousands of dollars in government incentives to place these people in new jobs but too often the new jobs are a nightmare for the worker.”

Mr Simmonds said there were ostensibly respectable Gold Coast companies hiring older workers but privately paying bare minimum wages and imposing unfair working conditions.

“If the worker complains, they are sacked or threatened with the sack, knowing it can be hard for older workers to find a new job,” he said.

“Intimidation is used to silence them. Older workers are the people with the least rights in the workforce and generally the unions can’t or won’t do anything to help them.

“Part of the problem is the mindset of younger bosses who can’t relate to older workers or have no respect for them.”

Many younger bosses can’t relate to older workers.
Mature age workers can be a golden asset for an employer.

Mr Simmonds said distressed clients stated they were often treated with disrespect by younger bosses, treated like idiots or given menial tasks either to persuade them to resign or because the boss did not trust them with more responsibility.

“It’s tragic because mature age workers can be a golden asset for an employer. They have a long-term work ethic, tremendous workplace experience and a professional attitude to their job. They could teach their bosses a thing or two about personnel management.”

Mr Simmonds expects the problem to get worse as an ageing population is forced to work longer before pension age.

Manny Palma, of the Gold Coast Community Legal Centre, said his organisation was seeing the same issue.

“We identified it to be such an issue we put our hands up for extra funding for a specialist employment position,” he said.

“It is a burgeoning area and, while we missed out on funding for a fulltime position, we still have one lawyer who basically does 80 per cent employment law.”

Mr Palma said the centre had easily a 30-40 per cent increase in the numbers of mature age workers seeking advice: “We have a lot of mature age workers being turfed out of jobs with their positions ostensibly being made redundant but then the position is readvertised with a different title but the same duties.”

Source:  Gold Coast Sun

MRAEL Group is one of the three Australian Apprenticeship Support Network Providers chosen to offer the Skills Checkpoint for Older Workers Program.

The Australian Government initiative is a free career advisory service offered to employed individuals aged 45 to 54 years. The service will assess where individuals are in their careers and offer guidance if a change in career direction is needed or desired.

MRAEL Chief Operating Officer, Christine Zechowski said the service will operate for six months.

“MRAEL is very excited to be one of only three Providers in Australia to be able to deliver Skills Checkpoint Pilot services.

“We will be delivering the free service across Queensland, including in metropolitan, regional and remote areas of the State,” Ms. Zechowski said.

The Skills Checkpoint for Older Workers Pilot is designed to provide eligible individuals with an understanding of their existing skills and experience, determine suitable training and employment pathways and provide advice and assistance in planning the next phases of their career.

“The objective of the program is that eligible participants can access detailed skills analysis and career advice which will assist them to identify suitable new career pathways that are matched to their developed skills and experience,” said Ms Zechowski.

Skills Checkpoint services will also provide participants with advice about employment growth sectors, information about where jobs are located in local regions and the specific skills and credentials required to secure those positions.

“Queensland has a positive employment growth forecast for the five years through to November 2019, with an additional 244,000 jobs expected to be created. With such positive growth in the employment market expected, now is the time to support individuals to plan the next stage of their career to ensure that they are prepared to meet the needs of the evolving labour market across the State,” said Ms Zechowski.

Employed individuals aged between 45-54 years old interested in finding out more about the Skills Checkpoint Pilot Program, including whether or not they are eligible to participate, can contact MRAEL on 1300 4 MRAEL (1300 467 235) or visithere.

Source:  Gladstone Observer

The closer we get to taxing superannuation properly the more we are going to hear about how important it is and how much we are going need to live on in retirement. Don’t believe it. It’s almost all propaganda, almost all paid for with money taken out of our superannuation accounts.

The latest scary figure, produced by the Association of Superannuation Funds, is $58,784 per year. That’s how much it says a 65-year-old couple needs to live on in order to enjoy a “comfortable” retirement.

At the risk of stating the obvious, after tax and rent or mortgage payments most working Australians couldn’t afford such comfort.

It’s absurdly high. The fine print shows such a couple would spend $40 a week on alcohol, $80 a week on dining out, almost $200 a week on food and groceries, $136 a month on the phone and internet, $4000 a year on holidays within Australia, and $14,000 every five years on a holiday abroad.

The Association of Superannuation Funds estimate of how much a 65-year-old couple need to live is absurdly high. Illustration: John ShakespeareThe Association of Superannuation Funds estimate of how much a 65-year-old couple need to live is absurdly high. Illustration: John Shakespeare Photo: Illo:Shakespeare

Plus this: the best part of $250 a month on new clothes and shoes, $80 a month on hairdressing, $54 a month on pest control and/or an alarm service, and $350 a month on private health insurance.

At the risk of stating the obvious, after tax and rent or mortgage payments most working Australians couldn’t afford such comfort. How did such a figure come to be defined as the gold standard used to justify steady increases in compulsory super contributions and to attack plans to tax them properly?

Part of the answer is that the super industry really doesn’t care about the living standards of Australians who are working or about the extra tax they have to pay because super funds aren’t. Its chief concern is the $2 trillion in funds it has amassed to date, and the tens of billions of dollars of it that stick to its fingers each year in management fees.

Its so-called “comfortable” retirement standard was originally called “comfortably affluent but sustainable”. That’s right, the word “affluent” got edited out along the way. The University of NSW team that built it never intended it to apply to the bulk of retirees. For them they created a second standard, “one which affords full opportunity to participate in contemporary Australian society and the basic options it offers”. They labelled it “modest but adequate“.

The word “adequate” has also disappeared along the way, leaving the false impression that what’s affluent is normal and that anything else isn’t adequate.

It’s needlessly scaring us. A new survey by State Street Global Advisors finds that before retirement most Australians believe they won’t have enough to live on, but that after retirement most are happy: two-thirds say their standard of living is no worse and a significant minority say it is better.

The truth is that living costs plummet on retirement. Most retirees no longer face a mortgage, a saving of 30 per cent. Most no longer pay tax, no longer have children living at home, and no longer habitually save up to 10 per cent of each pay packet. They also no longer incur the substantial costs of heading out of home and going to work: petrol, parking, work clothes and the temptations of the office cafeteria. And they have more time to shop and cook, meaning they get better value and pay less for food. So comfortable are retirees spending far less than the industry says they need to, that most actually save.

In his earlier incarnation as social services minister Scott Morrison revealed that in their first five years in retirement 57 per cent of pensioners either build up their savings or keep them steady.

In their last five years 67 per cent do so. A Productivity Commission survey released last week finds that only 5 per cent of retirees stop saving when their income drops on retirement. But outrageously inflating the cost of living for retirees is only the first of the industry’s tricks. The second is to imply that all of it has to come from super.

The astonishing truth, outlined by Morrison in a speech as Treasurer last month, is that super accounts for only 15 per cent of the assets of Australians over the age of 65, and only 20 per cent of their income.

As the Grattan Institute put it in a recent report: superannuation is the least important part of the retirement incomes system. Retirees have much more invested in real estate than super, and “at all ages, incomes and wealth” more invested in other financial instruments than in superannuation.

“It is unreasonable to expect superannuation savings alone to fund a comfortable living standard in retirement,” the institute says. It follows that it is unreasonable to believe that the super system needs to grow or stay as it is in order to provide decent retirements. Labor is blind to evidence when it comes to superannuation.

In thrall to the legend of Paul Keating and the myths propagated by the industry he helped create, it wants to lift compulsory contributions from 9.5 per cent of salaries to 12 per cent. Morrison is more clear-eyed.

Some retirees are genuinely poor. They are the ones paying rent. The Productivity Commission says they typically have to dole out $240 a week and are vulnerable to eviction. Shamefully, when Kevin Rudd lifted the age pension in 2009 he all but ignored the finding from his pension review that rent assistance was far too low. It remains unindexed at $120 a fortnight.

There may well be other Australians for whom retirement is uncomfortable, notwithstanding the pension of $20,498 for singles and $30,903 for couples. But for most it’s OK, no worse than working. There’s no need to hand a $2 trillion industry tax concessions in order to help them.

Peter Martin is economics editor of The Age.

Source: Theage.com.au

Association of Superannuation Funds boss Pauline Vamos wants at least a three-year lead time for major changes to super or pension policies.

Association of Superannuation Funds boss Pauline Vamos wants at least a three-year lead time for major changes to super or pension policies. Photo: Jeremy Veitch

Treasurer Scott Morrison has put ordinary Australian workers on notice that they should no longer expect to receive an age pension from the government when they retire.

Meanwhile, the very wealthy have been warned generous superannuation tax breaks are set to be reined in.

In a wide-ranging speech on Friday, Mr Morrison outlined the government’s vision for an overhaul of the country’s retirement income system designed to ease pressure on future federal budgets: by both reducing expenditure on welfare payments, and limiting the amount of revenue forgone through tax concessions.

The government plans to consult more widely on possible changes next year.The government plans to consult more widely on possible changes next year. Photo: Virginia Star

The Treasurer said government would act next year to alter the Superannuation Act to clarify that the purpose of the country’s compulsory savings system was to enable most Australians to enjoy the “worthy prize” of an “independent retirement”.

“Becoming a self-funded retiree, I think, is one of the most important objectives of any Australian … it means you have choices and control over your life and your care,” Mr Morrison said.

Currently most people can expect to receive at least a part age pension payment from the government when they retire, with their super savings providing a top-up.

Treasurer Scott Morrison outlined the government's vision for an overhaul of the country's retirement income system.Treasurer Scott Morrison outlined the government’s vision for an overhaul of the country’s retirement income system. Photo: Alex Ellinghausen

But the age pension should not be regarded as an entitlement for all, but rather a “welfare payment for those who do not have the ability to save enough to fund their own retirement”, Mr Morrison said.

More than twenty years since compulsory superannuation was introduced the system is not yet efficient enough at meeting its objective to “supplement or replace” the age pension, he said.

Mr Morrison said the age pension should remain “as a safety net”, and that people who take time out of the workforce to raise children or perform carers duties should not be left behind.

Opposition spokesman for financial services and superannuation Jim Chalmers wants a low income superannuation contribution retained.Opposition spokesman for financial services and superannuation Jim Chalmers wants a low income superannuation contribution retained. Photo: Glenn Hunt

Enshrining a definition of the purpose of superannuation in law, to better focus future policy changes,was a key recommendation of last year’s financial system inquiry led by former Commonwealth Bank boss David Murray.

The inquiry found that 10 per cent of Australians receive 38 per cent of super tax concessions, more than the combined benefit to the bottom 70 per cent of Australians.

Crackdown on super tax cuts for richest

Mr Morrison also said on Friday that the richest Australians will have to help pay for a better superannuation system as he flagged the government will limit tax breaks on very high balances.

“Super was never designed to be an open-ended vehicle for wealth creation.”

He floated the idea of placing a limit on how much money people can put into super at the discounted tax rate of 15 per cent.

Mr Morrison also pointed to Mercer research that suggests the super tax concessions should designed to enable an income in retirement of 70 per cent of pre-retirement earnings. Opening the door to limiting tax concessions on super has drawn criticism from lobby groups for self-funded retirees.

The move represents a major u-turn, under Prime Minister Malcolm Turnbull, on a core policy promise made by his predecessor Tony Abbott and his cabinet.

Mr Abbott, his former treasurer Joe Hockey, and former assistant treasurer Josh Frydenberg all repeatedly pledged earlier this year “no unexpected or adverse changes to super taxes”.

Mr Morrison downplayed the backflip.

Perception of fairness politically important

“A number of the changes [to super laws] that occurred under the last [Labor] government were egregious, and undermined stability and certainty in the system, and that is why we, in this term of government, have been so hesitant about making any changes in this term,” he said.

Mr Morrison said retirees, and older workers approaching retirement, deserved stability and certainty.

“And yet we must also balance that right with the goal of shaping the superannuation system so it provides opportunity for more Australians, because until tax concessions in the super system are perceived to strike the right balance of fairness there will continue to be calls for more tinkering and changes”.

The Treasurer made the comments during a speech to the Association of Superannuation Funds of Australia (ASFA) conference in Brisbane on Friday.

ASFA chief executive Pauline Vamos said she supported the idea of restraining access to super tax concessions for the most wealthy and developing policies to encourage more people to save towards a self-funded retirement.

“At the one end of the spectrum super should not be treated as a wealth creation and estate planning vehicle, while at the other we must have a social safety net for the most vulnerable”.

Ms Vamos said the government should provide at least three years notice of any future changes to the rules to allow people time to plan, and that special allowances may need to be made for those already in or closely approaching retirement.

ASFA has called for a lifetime cap of $2.5 million on the amount of money people can accumulate through super.

“While limiting the tax concessions on those very high super balances would only affect about 70,000 people today and not ring in a huge amount of revenue for the government in the short term it would set us up for a fairer and more sustainable system over the next 20 to 40 years,” Ms Vamos said.

Criticism from Labor

Other groups have called for much lower caps.

The Grattan Institute this week proposed limiting pre-tax annual contributions to superannuation accounts at $11,000 per person and taxing investment earnings in retirement, drawing the ire of the self-managed super industry.

Earlier this month Deloitte called for the government to scrap annual limits on how much money workers can tip into their super at the reduced tax rate of 15 per cent in favour of a lifetime concessional contributions cap of $580,000.

On Friday Mr Morrison said there “needs to be more flexibility” in the rules to allow people, especially women, with broken work patterns to catch up – indicating the government is open to scrapping annual caps on contributions.

The government plans to consult more widely on possible changes next year.

Opposition spokesman for Financial Services and Superannuation Jim Chalmers accused the government of peddling a rhetoric of wanting to improve retirement outcomes for ordinary workers, while simultaneously pushing ahead with previously-announced policies that would make leave them worse off.

“While it was good to hear Mr Morrison talking about improving the adequacy of superannuation system, all he offered were thought bubbles,” Mr Chalmers said.

“Meanwhile the government is pushing ahead with plans to abolish the low income contribution scheme by 2017, it is stalling on raising the super guarantee, and has laws before the parliament to weaken penalties for employers who do not comply with their obligations to pay workers’ super.”

Labor’s plan is to introduce a 15 per cent tax on earnings from super in retirement, which are currently tax-exempt, once a person has drawn more than $75,000 a year.

Source: The Sydney Morning Herald

Date:  November 23, 2015 
Sham contracting is a big issue in the cleaning industry.

Sham contracting is a big issue in the cleaning industry.

There are many ways in which big  businesses try to get an unfair advantage over small businesses and also their own employees. A common practice for many years has been to rechristen employees and class them as contractors.

An industry that would appear to be overrepresented  in forcing employees to become contractors is the cleaning industry. In some cases extremely large businesses try to hide behind supposed business arrangements with contracting companies.

Myer has been accused of aiding and abetting contracting companies maximising their profits to the detriment of employees classed as contractors.

In July 2015 The Age revealed cleaners at Myer department stores working for a cleaning services company called A&K Saana Services were being paid a flat hourly rate and not in accordance with the relevant award. An investigation undertaken by the Fair Work Ombudsman found that nine cleaning staff had been underpaid by $6300 in a month.

A Myer spokesman at the time had said, “the company took its duties as a responsible Australian employer seriously”, this comment has to be called into question as a result of a new case involving Myer.

The 7.30 Report reported on November 18 Myer was using another contract cleaning business, Spotless, where cleaners were classed as contractors, made to get their own ABN, were paid below the award rate and had to look after their own tax, superannuation, and insurance obligations.

Q. I work for a cleaning company using my own ABN. I have been advised by the company that I must get registered for GST and I will have to pay the 10 per cent GST out of my own earnings. As my annual income is only about $35,000 why should I have to get registered for GST?

A. You do not have to get registered for GST from an income tax point of view. It would appear that the cleaning company you are working for have turned the practice of making employees work as sham contractors into an art form.

On the Fair Work Ombudsman’s website, the differences between contractors and employees are clearly spelled out. The factors that determine whether someone is an employee are shown as:

  • have their work directed and controlled by their employer
  • work set or standard hours (casual employees hours can vary from week to week)
  • usually have an ongoing expectation of work
  • bear no financial risk – it’s covered by their employer’s insurance
  • are provided by their employer with tools or a tool allowance is provided
  • have income tax deducted by their employer
  • are paid wages or a salary regularly
  • are entitled to paid leave.

Alternatively independent contractors are shown as having the following factors:

  • have a high level of control over how the work is done, including the choice to hire others to assist
  • agree to the hours required to complete the job
  • usually engaged for a specific task or time
  • bear the risk of making a profit or a loss and usually bears responsibility and liability for poor work or injury and usually have their own insurance
  • use their own tools and equipment
  • pay their own tax and GST
  • have an ABN and submits invoices
  • don’t receive paid leave.

The tests applied by the ATO to decide whether someone is running a business, or is really an employee, are similar to those used by the Fair Work Ombudsman. What the cleaning company is asking you to do would appear to breach not only employment laws but also income tax and compulsory superannuation guarantee contribution regulations.

On the Fair Work Ombudsman’s website where the differences between employees and contractors are listed, see the link above, there is another link that allows employees wrongly classed as contractors to try and resolve the workplace issue of them being incorrectly classed as a contractor.

Source:  The Brisbane Times

A national inquiry has heard that society’s obsession with youth and looks is driving down the age when bosses consider employees to be past their use-by date.

Official complaints to federal and state advocates about age discrimination start well before retirement age, with Queenslanders complaining that they are being sacked and passed over for work from their 40th birthday.

Cases include an employee in the 45-54 age bracket who was told they were too old to use the stairs at work and fired for safety reasons.

Another was made redundant because the company needed “fresh faces”.

Age and Disability Commissioner Susan Ryan is currently touring the country as part of a Federal Government inquiry into age and disability discrimination in Australian workplaces.

 

 

Queensland Anti-Discrimination Commissioner Kevin Cocks. Picture: Bruce Long

Queensland Anti-Discrimination Commissioner Kevin Cocks. Picture: Bruce Long

 

 

She said there was an “infatuation with youth’’ and HR managers had admitted to her that they preferred younger workers. “It makes no sense but it happens,” she said.

She said 45 year olds were finding doors “shut in their face everywhere they go”.

The issue came to the fore at a recent meeting of national HR managers, who admitted hirers – often in their 30s – did have a bias against people older than themselves.

Queensland’s Anti-Discrimination Commissioner Kevin Cocks said the problem was across industries and genders, although he nominated flight attendants, the media and academia as memorable cases he had seen.

Despite previously having a successful career in consulting, Sue, 65, who is now a retail worker in Brisbane’s CBD, said she was repeatedly knocked back when she attempted to re-enter the workplace as an over 50.

“I applied for 180 jobs in a matter of weeks. I have no doubt it had to do with my age,” Sue said.

 

Source:  The Courier Mail