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Stranded: too old to work, too young for the pension

After a career spanning business, software analysis and the Arts, and now in my late 50's, a few years ago I decided to reinvent myself as a financial planner. I studied and started applying for jobs. Over many years, even if I made it to the interview stage, I have been amazed to hear the excuses as to why I am not suitable. My favourite is “too creative”. I believe ageism is the real issue.

Eventually, I secured a one year casual contract with a major dealer group looking after their existing superannuation and insurance customers, which I finished in February 2016.

The plight of the 'renting transitionals'

In dealing with these customers, it became evident that there is a particular group of people who are being ignored by both our political and financial classes. I call them the 'renting transitionals'. They are in transition between mature-age (50 years-of-age upwards) and age pension age. Not only are they in transition between jobs, but crucially, they do not own their own homes. Surviving on the age pension as a non-homeowner is a topic for another day.

With the superannuation system still evolving into maturity, when these renting transitionals, especially women, lose a job, they do not have sufficient funds to support themselves to preservation age, let alone pension age. Even when they can access their super, perhaps under the 'hardship case' provision of release or a Transition to Retirement pension, it is insufficient to pay for both rent and food. The money won’t last the distance.

For those that qualify, the Newstart Allowance for a single person is only $13,717 per annum, which will not cover basic living expenses, and any income earned reduces the Allowance.

Home ownership is a massive issue

Many financial commentators quote the ASFA Retirement Standard as the benchmark for living standards. Their latest annual budget for a ‘modest’ standard is $23,797 for a single person, and $43,184 per annum for a ‘comfortable’ retirement. The crucial qualification is:

“Both budgets assume that the retirees own their own home outright and are relatively healthy.”

I have a colleague who was made redundant after working for Arts and Heritage organisations for many years. The recent cuts to the Australia Council do not come without personal consequences. The types of jobs she has held mean her income has been low, she has been unable to buy a house, her super balance is accordingly smaller and at age 59, she has not been able to find another job. The loss of manufacturing jobs and the downturn in resources and construction have hit others hard. My colleague is increasingly isolated and losing confidence which in turn affects her chances of employment. It causes profound stress, depression and suicidal thoughts.

Now her TTR pension may also be subject to 15% earnings tax further affecting its longevity.

What do we do? This is not an issue that will go away for older workers. It is not that they do not want to work. Often people employed in the Arts are working extremely long hours that are usually underpaid, and they rely on other jobs to get them through. Income protection policies, while highly desirable, are out of the reach of these low income earners. Newstart (again, if they qualify) is a form of entrenched poverty. If it was maintained until their other earnings reached a liveable wage, it may be useful.

Council of the Ageing SA Chief Executive, Jane Mussared, recently said:

“Home ownership was a bedrock for older Australians. Our pensions are low by OECD standards but were propped up by high ownership levels and low mortgage levels. (Federal MP) Mark Butler talks about home ownership rates being in free fall among older people. Put in a period of unemployment prior to aged pension, low levels of super, low earnings over a lifetime and high levels of caring responsibilities and we have a looming problem.”

What do large institutions say about employing older people?

Nearly every major corporation has a public policy on the need for diversity in the work place. Often, there is a heavy focus on gender balance, pushing other diversity issues such as age, disability and religion into the background.

It is common for a policy to state that the company’s employees should reflect the characteristics of its customers. This ensures an empathy with customer problems, leading to greater understanding and hopefully, business retention. For example, the Commonwealth Bank has a microsite devoted to sustainability and the need to 'reflect community diversity', stating:

“The Australian community is diverse, dynamic and culturally rich. It is also changing as the population ages and we become more economically and culturally entwined with our Asian neighbours. As one of Australia’s largest employers, with a nationwide branch network, it only makes sense for our workforce to reflect the diversity of the Australian community.”

“Diversity is an essential element of the Commonwealth Bank Group’s new strategic vision: to excel at securing and enhancing the financial wellbeing of people, businesses and communities. A key area of focus over the next 12 months will be further developing our response to the challenge of age diversity.”

A good place to start on age diversity would be employing the number of older people in proportion to the number of older people among CBA’s customers. Now, that would be a big number!

What else can be done?

Luckily, I have sufficient funds and my own home. I will shortly complete my Advanced Diploma in Financial Planning and will continue to look for full-time work. Failing that, I will retire if the government starts taxing my modest transition to retirement pension. The renting transitionals are not so fortunate.

Do we need an education campaign reminding 40-year-olds that they may need to provide for themselves without government assistance from anywhere between the ages of 50 to 70, before the likely age pension kicks in?

We need solutions beyond standard income protection policies. For low paid workers who are aging, many of these favourite insurance solutions do not present themselves. Are there new affordable ‘Living Wage Mutual Income Protection’ insurance policies that could be designed for this demographic?

The alternatives to taking action are mental health issues and homelessness affecting potential workers who do not have the resilience of youth to tide them through. I worry about that my colleague may be among the growing number of older women who experience homelessness for the first time later in life. Older, single women are vulnerable as they may lose their jobs early, lose a spouse or be discriminated against in the housing market. As Jane Mussared said:

“It is your mother, sister or grandmother that is at risk of being forced to sleep rough.”

I would dearly like to hear how we help people get through this period until they can at least qualify for the age pension. Have you survived a similar period? How are advisers helping clients with this potential problem?


Barry French has a BA and is currently completing an Advanced Diploma in Financial Planning. He formerly worked as Technical Support Manager for an international software company. His passion is to provide financial services and education to people in the Arts and the 80% of people who receive the least advice and probably need it most.



July 12, 2021

I feel your pain. After working 45 years I found myself bullied out a my job and I am not the sort of guy to go to court over it. Now 65 1/2 I am applying for jobs with little success. If they left the pension at 65 I could get it but they had to move it out of my reach. I have to support 2 people on $570 a fortnight so it's lucky we own our house. Savings are just running out.

May 15, 2021

I'm 57 I can't access my super for three years, I relentlessly apply for jobs but to no avail I have been out of work for two years so that lessens my chances even more. I have enough super to retire comfortably , and own my house outright, I'm on Centrelink and even though I own my house my savings are dwindling and will be gone. Access to Super for someone in my circumstances ought to be allowed, I have to scrimp by for three years and be a burden on the taxpayer and Jo provider.

November 27, 2020

Yes I’m panicking.
Single parent. 57. Adult children at home, not qualified and neither am I. No superannuation. Caring for mother with Alzheimer’s....Came here as an adult immigrant. They say suicide is a dirty word but once my mother dies, I am hoping I have the confidence for this. No one wants to be a burden and no one wants to feel stressed about living without their own means. Society doesn’t cater for many.

January 03, 2020

And what happened to the national pension fund that would have supported us oldie? Stolen by the govt. THAT is deserved of a royal commision, or class action

Charlene stanton
July 09, 2019

Im a 57 single parent all my 3 older children still live with me as they or me on our own could not afford a rental home, two of us are on newstart and the other two on youth. Then this year our rental got sold and the RE basically forced us out as they needed it vacant. We have now been living on a floor for 3 months as i cannot get another rental. Ive been declined nOw more than 14 times, i am not on ticca, i always paid my rent never behind, house clean, yard clean, a quiet family. But now wheir homeless, community groups said no cant help, housing commission said im classed as needing moderate help. I had to sell stuff to fit a small 4 br household into a single garage storage shed, two of us are on a mattress on floor with two cats and a dog, other two kids are crashing at various friends place. Ive had to go back and do my 15 hrs volunteer work or i loose my newstart, it does not matter to centrelink if i have health problems, they dont care, i have arthritis in my left knee, am asthmatic, have cronic sinus desease, i use hearing aids - but they dont work as out of batteries, i am on medication for high blood pressure. By the end of the day at my volunteer job i can barely walk as my knee is sore, my ankles all puffed up, but that does not matter i have to do those 15hrs per week. Within the next fortnight we may have to go out to local state forest to camp as we cant stay here on floor any more. Im not sure why i cant get a rental, RE dont have to say why ive been declined. I have no idea what to do anymore, why do i volunteer when no one notices how hard it is to pretend im not up set, not worried, not in pain, not stressed out about what to do, ????? Have a nice day.

May 16, 2019

I have just come across your article as I sit and try to find how to close my business of 20 years - working 6 days a week and now reaching the age of 65 with no home or assets. it means I have to get a job which would require less than I put into my own business but silver hair states that they will not hire me, except for a very low paid job if lucky. I could try for the New Start but how are you supposed to live on that and pay rent??
I am beginning to think we are meant to go away and die so as not to be a burden on the GOVERNMENT. Crazy thing about this is I have just finished reading Homo Deus and the projection is most of the population will be in the same boat.
Wish me luck and if I find a way to deal with this will let you know.

April 17, 2019

Why won't any politician try to survive for one week on $260, because they know it can't be done!..
I returned to Australia after helping Christchurch rebuild for 5 years. (I'm a Commercial glazier). It's been 4 years on Newstart now at age 57, applied for 20 jobs per month not one interview or call back!. yet if you miss one appointment they cut you off...if I didn't have a family member letting me live in their shed I'd be living in my car. If anything should happen to my car, that I can't afford to insure, might as well jump off the nearest cliff. No wonder I hate politicians.

June 06, 2016

The heart-rending instances of financial deprivation impacting people who played by the complex rules of compulsion and preservation, often coaxed by tax savings, are all too common. To warrant our welfare society label, this cannot go unaddressed. Apart from personal privation, social cohesion would be at risk.

What should give?

The taxpayer groaning under our unfunded pensions (really a mortgage on future generations with scant credit rationale) cannot mysteriously whip up the resources from current revenues already eaten up by commitments. Governments can and will go broke.

This is where I believe the recent budget has, perhaps unwittingly, pointed a way: bold, unpopular, even retrospective changes must be considered. For once, the genie of unsustainable super concessions is now out, and like Labor’s once-derided SG now the cornerstone of our retirement system, it could be Liberal Coalition’s seminal turning point.

All who deserve help can only be accommodated, if the system can also claw back seriously undeserved handouts, which as a nation, we now consider untouchable:
• Asset-rich, cash-poor seniors must be subject to a statutory reverse mortgage scheme, so that the taxpayer can claw back his contribution before the kids inherit.
• Like the $1.6 million tax-free pension cap, inheritances beyond a certain limit must contribute to the system that facilitates it.
• HELP debts should be recovered from deceased estates before relatives take a slice.
• Anti-avoidance measures should pre-empt advisor-led circumvention (for example, through an imputed gift tax).
• Politicians rorting the public expenses must be jailed and their assets seized, not simply be allowed to resign.

Am I hopeful that these and other essential long terms remedies will eventuate, given the political compulsion of having to game the opposition every three years? No, but near-death personal and national experiences are often known to have a cathartic effect.

Let us not perpetuate the Jekyll and Hide mindset by pretending to care for the underprivileged while immunising the vocal over-privileged.

June 05, 2016

I know many people who are doing it tough and are concerned regarding their future. As pensioners paying rent receive rental assistance I do not understand why pensioners still with a mortgage do not receive mortgage assistance.

June 04, 2016

My spouse and I, now well in to our 60s and caring for our adult disabled son, dread the outlook for our future years. I have worked while my wife took care of our son and we rent as were unable to afford to buy. The years pass so fast and it all becomes very scary.

Ann Shalders
June 02, 2016

I have a son turning 50 this year, who has been through a relationship break-up, struggles to pay child support, and a mortgage on a home with his new wife. He was made redundant last year and unemployed for six months despite applying for hundreds of jobs. He finally got work on a contract basis which is not very secure. He couldn't get Newstart because he was deemed to have too many assets and his wife works part-time in a low paid job. I worry about his future as he could well end up as one of the people you describe as there is no guarantee he will manage to keep his home if he becomes unemployed again.

Paul Meleng
June 02, 2016

It is tough. I think it has always been so if one is single and wants to live alone. A couple don't take up any more "space" than a single. When one of a couple dies it becomes hard again for the survivor.

The common solution throughout history has been of course to not be a sole occupant. Single people of all ages lived with families or in shared housing like uni students. For people who for whatever reason cannot share close space we need a lot more simple villages that provide basic comfort and safety at a rental that can be covered by pensions.

For those in the gap you mention, people have to rethink and figure out how to share and care. For example, free board and lodging in exchange for 20 hours a week of assistance. One can live fairly cheaply, but it requires a reset of self image and "needs". It should not be this hard, but it is.

With the coming onslaught of robotics replacing almost all mid level processing work this issue will become huge and very soon.

Anne Casey
June 03, 2016

Paul, free board and lodging is, unfortunately, not viable for anyone receiving benefits - as the value is assessed by Centrelink, and then deducted from any payment.

In fact, sharing a rental house can be an issue, as Centrelink can deem that you're running a boarding house, and consider the other person's share of the rent as your income, but you can't deduct any costs!

Ivan Fisher
June 02, 2016

Finding myself at age 52, recently divorced, cleaned out by the lawyers, half my super gone, paying the CSA debt collectors, drowning in debt and trying to get as much back into super as I can (and this will be made even harder soon)

My only option for "retirement"? SE Asia

I'm priced out of my country of birth.... yep, the lucky country proves unlucky for me

Felix Huxley
June 02, 2016

I wonder how many financial planners providing advice to clients in this category, or approaching this age in such a situation, advise them to prioritise home ownership over the usual advice to invest into a high fee managed fund or Wrap platform or set up a TTR?


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