Employers will be offered up to $10,000 to hire older workers under the Abbott Government’s expanded Restart program announced in last night’s Budget 2014-15.
However, seniors advocates and experts say the rehashed scheme won’t be enough to tackle the broad and complex set of barriers to mature age employment.
COTA Australia chief executive Ian Yates said while he welcomed the government’s attention to the issue, he said financial incentives alone fall short of what’s required to address the issues confronting older workers.
“It will have an impact but it is not a solution by itself and it is not a rationale for changing the pension age,” he told Australian Ageing Agenda.
He said employment incentives needed to be backed by improved training support for mature workers, workplace flexibility and a program to tackle age discrimination.
The initiative expands the former Labor government’s Job Bonus scheme that rewarded employers with $1,000 for hiring a worker over 50 for at least three months.
Under the Coalition Government’s program, which upped the incentive payment from its pre-election commitment of $3,250 to $10,000, the wage subsidy will be paid to employers over a period of two years.
From 1 July, eligible employers can expect to receive $3000 after 6 months of employing a full-time worker aged 50-plus who had been receiving income support (including the age or disability support pension) for at least six months. Businesses will then be paid a further $3,000 after the first year of employment, $2,000 at 18 months and a further $2,000 after two years.
Companies that employ a mature age worker on a part-time basis will also be eligible for a pro-rata subsidy as part of the scheme. The government estimates around 32, 000 mature workers will benefit from the subsidy annually.
Treasurer Joe Hockey said there needed to be a change in the culture of many businesses towards older workers. Employers can use these funds to assist employees to reskill and play a more active role in the workforce,” he said in his Budget speech.
To be eligible, employers will need to demonstrate that the job they are offering is sustainable and ongoing, and that they are not displacing existing workers with subsidised job seekers, he said.
However, National Seniors chief executive Michael O’Neill said with the pension age set to rise, the government must do more to encourage mature age workforce participation. “Put simply, we can’t raise the pension age without ensuring jobs exist for older Australians. Experience suggests cash bonuses don’t work in isolation,” he said.
He agreed a suite of initiatives that tackle community attitudes and remove legal barriers to employment were necessary.
Professor Philip Taylor from the School of Business and Economics at Monash University said there was little evidence locally or internationally to suggest financial incentive schemes targeting the over 50s worked.
He said they were administratively burdensome for employers and tended to help those already likely to be hired by businesses such as the younger old or the highly skilled. He cast doubt on whether the long-term unemployed or low skilled older workers would benefit from the scheme.
Professor Taylor said it also sent the wrong message to business and to the community about why employers should value older workers and negatively categorised older people in society as ‘difficult to employ.’
“For me, the primary problem is what messages they send to society about older people,” he told AAA.
He said financial incentives were not the most effective way to change employer attitudes and the money could be better spent on retraining and skills development for older workers, investments in lifelong learning and addressing ageism in wider society.
The Abbott Government has committed $304 million of new money to the initiative over four years, which it will evaluate in 2016.
At the same time as announcing its Restart program, the government has decided to scrap the Mature Age Workers Tax offset at a saving of $760 million over four years, which has drawn criticism from stakeholders.