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Monday, 30 March 1998
Page: 1583


Senator Woodley asked the Minister for Social Security, upon notice on 6 February 1998:

With Reference to the 1997-98 Budget announcement on a deferred retirement plan:

(a) why was 25 hours per week paid employment chosen as the criteria for `work'; (b) given the fact that many part-time workers would be working 3 days a week, what advantages and disadvantages would flow from lowering this level to 24 hours per week; and (c) what would the financial impact be of lowering this level to 24 hours per week.


Senator Newman (Social Security) —The answer to the honourable senator's question is as follows:

(a) The requirement of 25 hours of work each week was originally selected to ensure that people deferring their age pension maintained a high level of workforce attachment.

(b) An advantage flowing from lowering the required hours of work would be that more people would be eligible to participate in the pension bonus scheme. Because only a minor change in the hours worked requirement would be involved, the workforce attachment of persons participating under the Scheme would remain strong.

(c) The financial impact of lowering the required hours of work would be negligible.

Following a series of community consultations that occurred after the Budget announcement last year, the Government has decided to reduce the required number of hours that people participating in the scheme would need to work.

People who wish to participate in the pension bonus scheme will now have to work an average of 20 hours per week over 48 weeks of each year, or 960 hours for a whole year. Paid leave will generally not count as hours worked while participating in the scheme. The 48 week period takes account of normally accepted leave patterns, and allows workers to take up to 4 weeks leave per year without impacting on the work test. This approach treats different leave arrangements consistently and does not favour one style of employment over another.

The 20 hour limit will allow more people to reduce their hours worked in a graduated way as they near retirement; and offers some standardisation with the level required by many States for the issue of State "Seniors" cards.

The financial impact of lowering the required hours of work would be negligible.