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Tuesday, 23 November 1993
Page: 3412

Senator HARRADINE —My question is directed to the Minister representing the Minister for Social Security. I refer to media reports of a 50-year-old woman, recently widowed after 33 years of marriage, who nursed her mother, father-in-law and husband through their terminal illnesses and has four children and 11 grandchildren, and who has now been forced out into the long job queues without any choice in the matter. Why was the decision to abolish the widow's B pension not phased in? What consideration was given to continuing the widow's pension for such widows in the likely event of their long absence from the paid work force? What cost-benefit analysis has been done of the returns from retraining 50-year-old widows for employment, as opposed to training unemployed younger people, taking into account the different expected length of work force participation? How many widows who would formerly have qualified for a widow's pension are represented in the unemployment figure? Finally, will the government recognise the rights of these widows and give consideration to restoring the widow's B pension to them so that they can have a choice of widow status or labour market traineeships?

Senator RICHARDSON —The widow's B pension is being phased out over a period of 15 years which began in July 1987, so there is a phasing out period. Since July 1987, no new grants have been made to widows aged under 45 who receive the sole parent's pension and some others under 50 years of age. So the widow's B pension will cease to be paid early next century when all women who have qualified since 1987 attain age pension age and residency.

  As part of the simplification of the superannuation package, the Treasurer announced new arrangements regarding the preservation age. From 1 July 1992, the preservation age became 55 for people born before July 1960, 56 for people born from 1960 to June 1961, 57 for people born between 1961 and 1962, 58 for the next year, et cetera, so that for those born after June 1964 the preservation age is 60. New arrangements replaced the standard preservation age of 55 years.

  Appropriate consideration was given to preserving the widow's B pension for younger women but it was decided that younger women whose work force opportunities were not restricted by caring responsibilities should be expected and encouraged to re-enter the labour force rather than become dependent on the welfare system. The phasing out of the widow's B pension from 1987 was well publicised and families were permitted to make any preparations they decided were necessary. It is not the role of government to promote the life insurance industry.

  A cost benefit analysis of the sort proposed has not been undertaken. The Department of Social Security is intending to evaluate the changes to the widow's B pension as part of its portfolio evaluation plan strategy in 1996. Re-training for those suffering particular work force disadvantage—such as women who have been out of the work force for long periods—remains, of course, a government priority. It is not clear what costs and benefits this question refers to. It should be noted that the government does provide considerable assistance to people providing care for sick or elderly relatives through carer's pensions in the social security system and tax rebates in the taxation system.

  That is the official answer and I will editorialise briefly at the end of it. Regarding this particular case, because women are so young at 50 it is logical that that age bracket was the one most targeted to do away with the widow's B pension. Not all women who reach the age of 50 are going to be in a situation of having 33 years of marriage, four children and 11 grandchildren. As a result of Senator Harradine's question I will approach the Minister for Social Security, Mr Baldwin, to see whether we can get any flexibility in the rules. I do not believe it is a good idea to simply encourage all those who are widowed to go onto social security. Encouragement to go into the work force and the provision of training courses are welcomed by many and I think that should be encouraged, but this case does show up to me, at least, the need for some flexibility and I am going to ask Mr Baldwin whether that can be provided.