OLDER Australians would be given limited access to their superannuation while working part-time or casually as an incentive to keep them in the workforce longer, and pensioners would be able to keep more of their welfare payments if they increased their working hours under radical policy changes being developed by the Coalition.
If Tony Abbott were to win government, older workers would also be offered lower marginal tax rates to stay in their jobs as a partial solution to the demographic time bomb of a steadily ageing population.
Sources say the idea of allowing older people to spend superannuation while still doing some work is radical and breaks with a long-standing policy that does not allow workers to gain access to their super until they are fully retired.
The policy idea has not yet gone to shadow cabinet but has strong support within the party.
The policy is designed both to appeal to older voters who were once rusted on to John Howard and to deal with the worsening national skills shortage.
The Coalition wants to lure back the older voters who switched to Kevin Rudd at the last election. It believes many are now disillusioned with Labor.
The proposal is also part of the Coalition's attempt to cast itself as the party for productivity.
The opposition is at pains to paint Labor as depending on immigration to boost the workforce and fill the skills gap.
The Coalition argues that it would use this plan to keep older people in the workforce while getting mothers back to work with its paid parental leave policy to solve Australia's productivity and workforce problems without increasing immigration.
Under current rules, people can gain access to superannuation once they have reached the minimum age set by law and have permanently retired from the workforce, unless there are exceptional circumstances. This minimum age, which is 55 for people born before June 1960, is known as the "preservation age".
National Seniors chief executive Michael O'Neil said superannuation must be more flexible to reflect the changes in ageing.
"We need to be flexible in the way we approach employment. If superannuation (can be made) available, it might give more incentive for work, but it must be available under some conditions," Mr O'Neil said.
"The current practices do not reflect the way ageing has changed. Too much thinking is around a controlled environment; we need to be prepared to be more flexible."
The Coalition's Treasury spokesman, Joe Hockey, told the National Press Club this week that the Coalition would deliver a significant workforce participation policy in the lead-up to the election, and providing incentives to older workers would be at its centre.
Treasury secretary Ken Henry has suggested cutting taxes would make a bigger difference to the number of older workers remaining in the workforce than it would for people of prime working age, who were likely to stay employed in any case. "Older people are less likely to be in the workforce because they retire or work fewer hours," he said.
