ABSTRACT
The Australian economy emerged relatively unscathed from the global financial crisis and unemployment is low by current international standards. A shortage of skilled workers to fill vacancies may become a frustration for employers, and in the coming years the aging of the population will constrain labor-supply growth. Some occupations and industries are already feeling pressures from the demographic shift in labor supply, in particular those with aging workforces, poor working arrangements or conditions, or unattractive (e.g., remote) locations. As a result, and in order to contain fiscal costs, Australia is implementing a raft of measures that aim to raise participation by older workers. Recent public policy has aimed at prolonging working lives through both pension reforms and labormarket policy. The intention has been to tighten the eligibility for early retirement while increasing incentives to carry on working. For instance, the Federal Government’s Transition To Retirement (TTR) scheme allows a worker to commence an account-based pension while still working. TTR provides an opportunity to ease into retirement and take advantage of tax concessions. While an individual is still working, employer and member contributions will continue to be paid into their superannuation account. However, under the TTR rules, it is possible to withdraw some or all of a superannuation fund and turn it into a retirement income stream to compensate for a reduced income resulting from a move from full-time to part-time work. Until recently, an individual could only access their superannuation once they reached the age of 65 or retired.
