COTA Federal Budget submission 2001-02: Retirement incomes, housing and support for older Australians

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Council on the Ageing (Australia)

An Agenda for the New Millennium:

Retirement incomes, housing and support for older Australians

 

Submission to

Federal Budget 2001-02

for

Department of Family and Community Services
Department of Treasury

Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent
Melbourne Victoria 3004
Phone: 03 9820 2655 Fax: 03 9820 9886
Email: cota@cota.org.au

February 2001

CONTENTS

Summary of Recommendations
Introduction
1. Retirement incomes
1.1 Age Pension Adequacy and GST compensation
1.2 Older People in Regional and Rural Areas
1.3 Home Equity Conversion and Loans for Older People
1.4 Concessions
1.5 National Information Centre on Retirement Investments (NICRI)
1.6 Means testing the Superannuation Assets of People 55 and over
1.7 Review of retirement incomes system
1.8 Pension Bonus Scheme

2. Housing
2.1 Public Housing
2.2 Private rental
2.3 Housing assistance for owner occupiers

3. Social Support and Participation Programs
3.1 Support for Grandparents
3.2 COTA Congress

SUMMARY OF RECOMMENDATIONS

1. Retirement incomes

Age Pension Adequacy and GST compensation

Recommendation 1.1

As a matter of urgency, the Government must review the position of older people who have little or no other income than the Age Pension. COTA seeks the Government's consideration of a means-tested periodic supplementation of the income of such people. This low income pensioner supplement should be set at a minimum of $250 to a maximum of $500 per annum.

Older People in Regional and Rural Areas

Recommendation 1.2

Means-tested additional assistance should be made available to older people on full Age Pensions in rural and regional Australia to compensate for higher costs. This could be a supplement of $100 per year for people in regional and rural areas, in addition to the low income pensioner supplement recommended above.

Home Equity Conversion and Loans for Older People

Recommendation 1.3

The Government in consultation with COTA, establish an option for a home equity conversion scheme for older people receiving the Age Pension.

Concessions

Recommendation 1.4

The Commonwealth Government initiate a program of reciprocal arrangements with State and Territory Governments to provide eligible older Australians with transport concessions in all parts of Australia. This may involve some investment on the part of the Commonwealth to ensure the success of the initiative.

National Information Centre on Retirement Investments (NICRI)

Recommendation 1.5

An immediate increase of $200,000 to the funding of the National Information Centre on Retirement Investments to ensure that the service is available to all older Australians considering their investment options in both pre-retirement and retirement years. Additional funding is also needed to meet the demand for information about banking services.

Means testing the Superannuation Assets of People 55 and over

Recommendation 1.6

The assets test for unemployed people 55 and over in receipt of government income support over 39 weeks should exclude superannuation assets in order to ensure that people 55 and over are able to maximise superannuation savings available for retirement and old age.

Review of retirement incomes system

Recommendation 1.7

COTA seeks the Government's review of the retirement income system in the context of the "3 pillars" system of retirement income advocated by the World Bank.

Pension Bonus Scheme

Recommendation 1.8

The Pension Bonus Scheme be revised to provide stronger incentives for people to remain in employment for between one and four years. It should also allow older people who have already received an Age Pension to take advantage of the scheme if they have opportunities to return to work.

2. Housing

Public Housing

Recommendation 2.1

The Commonwealth Government re-establish a public housing policy and through the Budget allocate funds to the Commonwealth-State Housing Agreements for the purpose of increasing public housing stock and upgrading existing stock.

Private rental

Recommendation 2.2

Older people on the full Age Pension in private rental accommodation be able to access good quality public and community housing.

Housing assistance for owner occupiers

Recommendations 2.3

The Commonwealth Government fund housing relocation services which address the barriers to relocation for older people who wish to move to more appropriate housing. Costs involved include removal costs, rental bond, stamp duty, conveyancing, transaction costs, connection fees and financial advice.

The Commonwealth improve home modification and maintenance schemes to assist older people to remain independent.

3. Social Support and Participation Programs

Support for Grandparents

Recommendation 3.1

The Commonwealth fund and support a national Grandparenting Association. A start-up grant over 3 years of $320,000 (indexed) is sought to establish an Association in each State and Territory.

COTA Congress

Recommendation 3.2

The Family and Community Services portfolio provide $40,000 per annum indexed for COTA's annual congress to ensure older people are able to attend and participate, in policy debates.

Introduction

The past three years have been a period of intense policy activity and change with profound implications for older people.

There have been the major policy reforms in:

• tax reform and the introduction of the GST

• health financing including introduction of lifetime health cover for private health insurance and a 30 per cent rebate for private health insurance premiums

• restructuring of residential aged care.

In addition there have been major inquiries and developmental projects:

• Welfare Reform Reference Group inquiry into Australia's welfare system

• House of Representatives inquiry into mature age employment

• Two Year Review of Aged Care Reform

• Human Rights and Equal Opportunity Commission inquiry into age discrimination.

• National Strategy for an Ageing Australia

Now that these policy reforms and inquiries have been completed or are close to completion, it is time for review, response and moving forward in Government policy as it affects older people in the context of the next Federal Budget. The Government's response to the recommendations of the Welfare Reform Reference Group will now require funding commitments to see through the promises it has made to improve opportunities for social and economic participation of older Australians of workforce age. It is also time to review the adequacy of the GST compensation arrangements to ensure no older person has been left worse off.

For older Australians there are a number of critical questions in relation to directions in Government policy:

1. Are the policy reforms having a positive, negative or neutral impact – are particular groups experiencing more negative impact than others?

2. What adjustments are needed to those policies?

3. Is the Government prepared to take up the recommendations of the major inquiries and in what configuration?

It is essential that the Government responds to the issues of the major reviews and inquiries under the guidance of the following principles.

Policy Principles

Protecting and Extending Australia's Infrastructure of Social Services

The maintenance and improvement of Australia's infrastructure of social services must be an ongoing priority for the Commonwealth Government. These services are vital for the health and well-being of all older Australians. They include Medicare, residential care, social housing, Home and Community Care and Pharmaceutical Benefits Scheme. In addition, it is vital that there is an adequate "safety net" of services and income support which older Australians can access according to fair and equitable eligibility criteria.

Promoting The Rights Of Disadvantaged Older People

COTA believes that all older people have the right to an old age which is marked by security, dignity, respect, safety, high quality treatment, high standard care and being part of their community regardless of income status or any other social or economic factor or their geographic location. Government should focus on those people in the older population who are most vulnerable or disadvantaged in terms of these criteria.

As people age they are at increasing risk of advancing frailty, disability, ill-health and social isolation. Government needs to ensure the highest standards in health care, residential aged care and community services.

Maximising Opportunities For Social and Economic Participation

Opportunities for social and economic participation of older Australians must be maximised. Age discrimination needs to be addressed particularly in employment but also in all other areas of social and economic life. The Government must seek to promote positive views of older people and the ageing population.

Government needs to recognise that older Australians both in retirement and pre-retirement years have less ability to change their circumstances than younger, working age people. Therefore, governments must carefully manage policy changes because of the potential effects on the arrangements people have made to fund their retirement which are not amenable to change.

COTA and the Department of Family and Community Services

The Department of Family and Community Services encompasses a very large range of issues relevant to older Australians – most particularly as the body which sets policy for the Age Pension and other income support payments received by Australians aged 50 and over. Indeed, most older Australians have some connection to the policies of the Department.

In addition, the Department of Family and Community Services is the central Department for the development and implementation of social policy in Australia, all of which has profound effects on older Australians.

However, COTA has been concerned for some years of the lack of interest of the Department in making any contribution to COTA's activities even though, as an organisation we field a continuous stream of requests from the Department for input and advice to its policy development processes. COTA seeks some recognition of this contribution through special assistance to enhance this key area of COTA's policy work.

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1. Retirement incomes

1.1 Age Pension Adequacy and GST compensation

COTA has observed that over the past few years older people with private income, some receiving a part or full age pension and some fully self-funded retirees, have received a number of benefits, particularly in the context of tax reform:

• aged persons savings bonus;

• self-funded retirees bonus;

• the reduction in the pension taper rate from 50 cents to 40 cents in the dollar;

• refundable franking credits for self funded retirees and part pensioners with shares whose tax rates are below that imposed on company dividends so that they can get the full benefits from these credits;

• a 2.5 per cent increase in the income test free areas applied to all pensions and benefits;

• extension of eligibility criteria for the Commonwealth Seniors Health Card to older people with higher incomes ($40,000 singles and $67,000 couples);

• 2 per cent increase to the pension.

COTA supports these measures to assist those older Australians who have private income.

However, older people with no or little other income than the Age Pension have received little in comparison. While COTA welcomed the Government's legislated commitment to maintain the Age Pension at 25 per cent of Male Total Average Weekly Earnings, this does not substantially ameliorate the core problems faced by people with no or little private income.

A continuous theme of COTA's contact with older people is the difficulty in managing on a very low income with no prospects of ever being able to ameliorate their situation.

COTA believes that the Government should now focus on assisting people who have no or little other sources of income than the Age Pension and who must depend on this income over a long period of time. While the Age Pension allows a person to survive on a week to week basis, it is insufficient to allow people to put money aside for replacement goods and services such as white goods, major repairs or dental care.

However, we hear many stories of people who do not really manage basic living costs on the Age Pension depending on their circumstances. Increased user pays, and co-payments for services, the withdrawal of certain medications from the Pharmaceutical Benefits Scheme, the GST and various other factors, we believe have contributed to the pressures many say they are facing.

The people most likely to be solely reliant on a full age pension, for long periods of time are female due to their greater longevity (82 for females and 76 for males). It is quite possible for a woman to be solely reliant on an Age Pension for 20 or 30 years.

In addition, COTA particularly observes the difficulties faced by single age pensioners in managing on an age pension either as the only source of income or with a very small additional private income, compared to married couples. Many older people who lose spouses complain of the greater difficulties of maintaining a house and garden because the fixed costs are the same as for a couple.

Some of the anecdotal evidence we have received in the first 6 months of the GST implementation is that single age pensioners without private income or with a very small private income have been struggling the most - especially if they are living in rental accommodation.

Recommendation 1.1

As a matter of urgency, the Government must review the position of older people who have little or no other income than the Age Pension. COTA seeks the Government's consideration of a means-tested periodic supplementation of the income of such people. A low income pensioner supplement should be set at a minimum of $250 to a maximum of $500 per annum.

1.2 Older People in Regional and Rural Areas

From information received from older people in regional and rural areas, COTA understands that many have been hard hit by the GST and increased petrol prices which have flowed through to higher prices on a range of basic goods and services – including food. This is a strong theme emerging from all our state and territory COTAs.

COTA believes that the Government should attend to the issues for older people receiving an Age Pension income in regional and rural areas as a matter of urgency.

Recommendation 1.2 Means-tested additional assistance should be made available to older people on full Age Pensions in rural and regional Australia to compensate for higher costs. This could be a supplement of $100 per year for people in regional and rural areas, in addition to the low income pensioner supplement recommended above.

1.3 Home Equity Conversion and Loans for Older People

COTA is of the view that there is demand for reverse equity mortgages that is not being met. This issue relates to the issues raised above. This is a very strong theme amongst callers to the Seniors Information Service (SIS) that COTA auspices in a number of States and Territories. It is another strand of evidence that many older people are unable to manage on low incomes.

Many older people ring the SIS with inquiries about getting loans against their homes which is often their only asset. The need for loans is generated by a large number of factors but usually either to help with day to day living costs or to get essential repairs and maintenance done related to the home. Sometimes people wish to prepay for a funeral by borrowing against their home.

This demand is increased by the reforms to aged care which require many older people to find ways of releasing equity in the family home.

It is to be regretted that the contract between the Department of Social Security and Advance Bank which offered a Home Equity Conversion Loan for people on low incomes was not renewed after July 1996. It is time the Government, with banks, examine the possibility of reverse mortgages, in consultation with COTA.

Recommendation 1.3 The Government in consultation with COTA, establish an option for a home equity conversion scheme for older people receiving the Age Pension.

1.4 Concessions

A consistent issue reported to COTA by older people, is that they are unable to use their concession cards in all States and Territories. This is most important in terms of their capacity to travel around Australia. With greater fragmentation of families and communities, it is increasingly important that the mobility of older people is maximised. Transport concession arrangements which are only valid in the home State or Territory is a redundant concept in the 21^st century.

The Commonwealth should take a leadership role in ensuring that reciprocal arrangements are negotiated with each State and Territory.

Recommendation 1.4 The Commonwealth Government initiate a program of reciprocal arrangements with State and Territory Governments to provide eligible older Australians with transport concessions in all parts of Australia. This may involve some investment on the part of the Commonwealth to ensure the success of the initiative.

1.5 National Information Centre on Retirement Investments (NICRI)

As a member of NICRI's advisory committee, COTA is aware of the valuable service that NICRI provides in assisting older people with modest means to invest wisely and safely.

The recent evaluation of NICRI's free-call service showed the value of the service to users particularly because of its independence and the professionalism of its staff.

With an ageing population and increasingly complex investment environment, older people need considerable assistance in understanding their options, the advantages and disadvantages of those options and the potential risks involved. In addition, mature age people now and in the future have more wealth to invest than they did in the past evidenced by the growth in part-pensioners in relation to full pensioners. Superannuation is also a growing area where information is needed particularly by people in the pre-retirement years.

NICRI is the only organisation in Australia that provides a totally impartial information service in relation to retirement investments. The service should be viewed by the Government as an important mechanism for protecting older people from poor investment choices which may result in loss of income and increased dependency on Government income support. Fairly or unfairly, governments are often blamed if older people lose their assets due to poor investment choices.

However, COTA believes that currently NICRI needs increased funding to expand its service. It is particularly hampered by lack of funds to meet the needs in rural and regional Australia.

In addition, there is a growing need for NICRI to develop its services in relation to banks which continues to remain the most important investment vehicle for most older Australians.

With additional resources, NICRI would be able to extend the reach of its service to ensure that more older people have the information they need to invest wisely.

Recommendation 1.5 An immediate increase of $200,000 to the funding of the National Information Centre on Retirement Investments to ensure that the service is available to all older Australians considering their investment options in both pre-retirement and retirement years. Additional funding is also needed to meet the demand for information about banking services.

1.6 Means testing the Superannuation Assets of People 55 and over

COTA continues to strongly oppose the Government's inclusion of superannuation in the assets test for people 55 and over receiving an income support payment over 39 weeks.

This policy has the effect of forcing a person in receipt of Newstart Allowance or other income support payment into approaching their superannuation fund for the release of an income stream for current living costs, although they may wish to continue to work. They will then be unable to make further contributions to that fund should they subsequently find a job.

Given the relatively tight level of the assets test, an individual could be financially very disadvantaged by this policy in the long term because it cuts across the advantages that could be gained by maintaining and adding to their savings in the superannuation fund until retirement. The highest level of compounding interest for a superannuation fund occurs in the immediate pre-retirement years. It is poor retirement incomes policy to reduce opportunities for people to maximise their final superannuation entitlement with a result being long term dependence on government income support in retirement.

The reports Rethinking Work and Retirement by Dr Vince Fitzgerald and Catherine Rooney (1999) and Independence and Self Provision Discussion Paper for the National Strategy for an Ageing Australia (1999) support COTA's analysis of this policy issue by showing the importance for final retirement savings of continuing employment as long as possible and avoiding premature depletion of assets, including superannuation, for recurrent living costs.

Recommendation 1.6 The assets test for unemployed people 55 and over in receipt of government income support over 39 weeks should exclude superannuation assets in order to ensure that people 55 and over are able to maximise superannuation savings available for retirement and old age.

1.7 Review of retirement incomes system

Australia is depending on the success of compulsory superannuation to ensure that future generations of older people are able to support themselves in retirement with reduced or limited call on the Age Pension.

However, COTA questions whether the level of compulsory superannuation contributions will be sufficient to provide a retirement income consistent with the needs and expectations of older people in the future.

A recent qualitative study of COTA members in NSW undertaken by Association of Superannuation Funds of Australia revealed the extent of difficulties faced by people surviving on low incomes.

At the present time the incentives to use superannuation as an investment vehicle are reduced because of the high level of taxation levied –

• 15 per cent on employer contributions;

• 15 per cent on the fund's investment income and varying tax rates on lump sum or pension benefits;

• 15 per cent surcharge on contributions paid for high-income earners to reduce the level of taxation support received by these individuals.

COTA believes that the multiple layers of taxation of superannuation results in significant disincentives for using superannuation as a saving vehicle beyond the compulsory contributions which in themselves are likely to be insufficient to provide an adequate retirement income.

COTA considers a thorough review of Australia's retirement income system is now necessary and should be signalled in the context of the 2001 Federal Budget.

The review needs to cover the three pillars of Australia's retirement income system:

• superannuation

• the public pension system

• private savings

Recommendation 1.7 COTA seeks the Government's review of the retirement income system in the context of the "3 pillars" system of retirement income advocated by the World Bank.

1.8 Pension Bonus Scheme

In the 1997-98 Budget, the Government initiated a scheme in the Social Security portfolio aimed at increasing the labour force participation of older people eligible for the Age Pension.

The program aims to:

• increase labour market participation of retirement aged persons;

• add to individual savings of people soon to retire;

• restrain growth in pension outlays and thus reduce the need for increases in taxation revenue.

The program is targetted to people of Age Pension eligibility age who are in employment. By remaining in the workforce, they attract a bonus payment accumulating at 9.4 per cent of the Age Pension per year so that at the end of 5 years a bonus of 47 per cent of the maximum amount payable pension would be given. The scheme is thus designed to maintain workforce participation for the full five years.

COTA endorses and encourages efforts to help older people to remain at work as long as possible but we are concerned about the low rate of take up about this particular scheme which we wish to see addressed in the 2001-2002 Budget.

COTA argues that there is insufficient reason to exclude people who may have opportunities to return to work after they have had a spell on an Age Pension. We believe they are contributing to the main aims of the program as much as people who have the good fortune to be in a job that they continue after pension eligibility age.

COTA is of the view that "retirement" is a rather arbitrary state of affairs for many older people often conditional on the state of the labour market rather than their own desires. The age pension eligibility age for women is only 61 and half and many at that age are still marginally attached to the labour market and may wish to work for a number of years if a suitable job becomes available.

A person should be able to qualify for the scheme at any point after the age they qualify for the Age Pension - it is not clear why there needs to be any restriction on age of participation as long as the person is in the workforce and earning sufficient income so that they are better off than being on the pension and thereby meeting the main aims of the program.

COTA believes that there should be greater incentives for people to stay in the workforce for one to four years. Many more people could benefit from the program if there were higher incentives for continuing for these shorter periods. We believe that there would be commensurate savings and tax revenue for the Government as well.

Older people who are part of our organisation say that the pension bonus scheme should offer more to people staying on in employment for shorter periods. Under present arrangements, a single person working for an additional three years gets roughly one third the bonus of the person working five years although the person is saving the Government around $20,000 on the Age Pension and is paying tax.

COTA is concerned that the program in its present form does not meet the needs of older people or sufficiently take account of their labour market circumstances. We think that some of the underlying formulas for the program are unfair and cause confusion amongst older people.

We believe that there is scope for the Pension Bonus Scheme but that it should be broadly targetted to give older people sufficient incentives to stay on in employment for as much time as they can manage - as little as one year or as much as five years and at any point that they can manage to gain employment when they may have already commenced receiving an Age Pension.

Recommendation 1.8 The Pension Bonus Scheme be revised to provide stronger incentives for people to remain in employment for between one and four years. It should also allow older people who have already received an AgePension to take advantage of the scheme if they have opportunities to return to work.

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2. Housing

2.1 Public Housing

COTA is of the view that a range of policies and program responses are needed to cover the diversity of housing circumstances and needs of older people. The substitution of rent assistance for public housing has failed as a policy. The private rental market is tight especially in the capital cities. There is little investment in low cost housing and waiting lists for public housing have become impossibly long.

For older people on low incomes who do not own their own homes, public housing is the most effective means of preventing poverty. However, under the policy directions of the Government, there may be lower levels of access to public housing as a result of:

• lack of increase in public housing stock and selling off of existing stock;

• a greater reliance on the private rental market to meet the needs of low income households;

• increased pressures on any remaining public or community housing stock.

Our major concern is that the increased reliance on the private rental market is placing pressures on older people who do not qualify for residential aged care.

The typical older person who would most benefit from public housing would be an independent person or couple in their later fifties or sixties, who do not own their own home, who may have rented privately while working, but who are unable to adequately manage private rental after retirement or retrenchment.

Such people previously may have looked forward over time to placement in public housing units which would guarantee them affordability and long term stability.

However, with the lower levels of new additions to the public housing stock, such people would be almost permanently reliant on the private rental market. The drawbacks of such arrangements for disadvantaged but independent older people are many:

• lack of long term security of tenure;

• lack of mobility (eg. ownership of a car) to look for alternative accommodation;

• property owners' preference for people in paid employment;

• rents subject to market forces with the possibility of escalating rents in tight markets in which the subsidies are inadequate;

• the subsidies themselves contributing to pressures in the private rental market;

• reliance on private owners to undertake repairs or modifications on properties on which they do not want to over-capitalize;

• lack of suitability of accommodation in terms of design, physical access, layout and location that is affordable for an older person;

• large upfront costs (connection fees, bonds, rent in advance).

Clearly a good public housing system in competition with the private rental market can influence these problems associated with private tenancy.

Public housing, however, is not a suitable form of accommodation for an older person if it is poorly maintained, designed and located. Upgrading of the housing stock and its building in good locations is also necessary.

Recommendation 2.1 The Commonwealth Government re-establish a public housing policy and through the Budget allocate funds to the Commonwealth-State Housing Agreements for the purpose of increasing public housing stock and upgrading existing stock.

2.2 Private rental

COTA is aware of the immediate problems of affordability faced by older people in private rental accommodation. The situation of older people in private rental accommodation should be subject to review and appropriate response. For older people, affordability is but one of a continuum of issues they face in private rental. Other issues include security of tenure, location and physical access and appropriateness. While Rent Assistance is an important income supplement and should be maintained and augmented, it does not address these issues. COTA considers that public and community housing would be better options than private rental for older people on the full Age Pension for the long term.

Recommendation 2.2 Older people on the full Age Pension in private rental accommodation be able to access good quality public and community housing.

2.3 Housing assistance for owner occupiers

While public housing and rent assistance are the major forms of housing assistance in Australia, COTA is of the view that any discussion of housing assistance for older people should also incorporate issues relating to owner occupancy. Most older people own their own homes or are close to paying them off.

Some older people have very large investments in their housing, often as a result of large, sustained capital gain over a very long period of time. Others, however, may have experienced a decline in the capital value of their house due to the economic decline of an area, as the condition of the house has deteriorated or other factors.

Most people wish to remain living independently in their communities as they age. However, the difficulties of up-keep on a house and garden may prevent this. In addition, where an older person becomes frail or incapacitated, the design and layout of the house may need to be modified.

COTA continues to identify home maintenance and gardening as amongst the major issues of concern to older people. There are a variety of State schemes for older people to access advice and small amounts of funds to assist with home modification. There is also some funding available through the Home and Community Care program (HACC) for home maintenance and modification and gardening. However, there is a lack of consistency across the States in the availability of this type of assistance and generally poor accessibility. There is an urgent need for the Commonwealth to take on a leadership role in this area and to improve the availability of this type of assistance.

COTA is committed to the notion of "ageing in place" as far as is practicable. This means maximising opportunities for older people to remain in their homes and communities to the extent that they wish to do so as they grow older. "Ageing in place" is important for most older people but often has particular significance where there are attachments to localities based on ethnic and cultural ties.

As stated previously, COTA believes that the Commonwealth Government should take a leadership role in coordinating and financing home modification and maintenance schemes to assist older people to remain independent. One option would be to increase specific funding for this purpose through the HACC program.

There are, however, some older people in their own homes who would like to relocate, for instance to be closer to family or to move to another type of accommodation, but the costs of moving may prohibit uptake of this option.

There is a need for services which address the barriers to relocation for older people who wish to move. Costs involved include removal costs, rental bond, stamp duty, conveyancing, transaction costs, connection fees and financial advice. There is an absence of co-ordinated government policy with relation to costs of moving. Some States offer minor assistance or concessions and these need to be approached in an integrated fashion. There is need for further services such as COTA (South Australia)'s advisory service which offers legal and financial advice on relocation.

Recommendations 2.3 The Commonwealth Government fund housing relocation services which address the barriers to relocation for older people who wish to move. Costs involved include removal costs, rental bond, stamp duty, conveyancing, transaction costs, connection fees and financial advice. The Commonwealth improve home modification and maintenance schemes to assist older people to remain independent.

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3. Social Support and Participation Programs

3.1 Support for Grandparents

There is a much greater need for recognition of the unique role of older people in supporting families.

There are now more grandparents in the world than at any previous time in history. Grandparents are living to see their grandchildren grow into adulthood. Many more are becoming great-grandparents.

With high divorce rates, the extended family becomes an anchorage for both parents and children. With the growth of two-income families, grandparents now provide a significant proportion of child care in Australia. Supporting the role of grandparents is important as a measure to reduce family breakdown.

Families face many challenges including unemployment, sickness or lone-parenting. Support from the extended family, particularly the grandparents, can be invaluable and cost-effective in the long run. Suicide rates have climbed steadily in the past two decades as a result of work and life stress. Again, grandparents can provide stability to the life process.

Parents living in country areas suffer even more than city people from isolation, unemployment, financial difficulties and family stress. They need the support of their extended family.

In all these situations, grandparents have an important role to play in providing emotional security and stability for the extended family, and thus assist in preventing family breakdown.

COTA has argued that more can be done to help grandparents fulfil their roles by establishing a national grandparenting association on the model established by COTA (NSW) which involves provision of information and support to grandparents.

Recommendation 3.1 The Commonwealth fund and support a national Grandparenting Association. A start-up grant over 3 years of $320,000 (indexed) is sought to establish an Association in each State and Territory.

3.2 COTA Congress

The Department of Family and Community Services covers a large proportion of the interests of older Australians. This is illustrated by one recent complaint to COTA (Australia) about an article in the magazine COTA News about health and aged care issues. The gentleman complained that he was a healthy, active 75 year old and wished to know why we were writing only about issues for "geriatrics". His main concern was surviving on an age pension in a country area!

While COTA (Australia) receives a grant from the Department of Health and Aged Care, this does not mean that our work can exclusively relate to those issues relating to that Department. Much of our work covers retirement and pre-retirement incomes issues, mature age employment and other issues outside health and aged care.

The depth and breadth of changes relating to an ageing population in recent years has led COTA to host an annual congress to extend debate and policy development on the many important issues involved. To date we have held two congresses:

• Older Australians: A Working Future? Adelaide November 1999, a conference about mature age employment

• Forging Our Future Melbourne November 2000, a conference about social and economic participation of older Australians.

COTA congresses are unique in that they work towards engaging older people in policy debates along with policy makers themselves. We offer heavily reduced registrations to enable older people to attend.

The Family and Community Services portfolio can assist policy formulation in the ageing area by providing funds for older people to attend its congress under its social and economic participation and stronger communities objectives. In 2001, we are holding a third congress in Canberra on the issues of retirement income, health and IT. We are presently seeking assistance from the Department of Family and Community Services for older people to attend.

Recommendation 3.2 The Family and Community Services portfolio fund $40,000 per annum indexed for COTA's annual congress to ensure older people are able to attend and participate, in policy debates.

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Copyright © 2001 Council on the Ageing. All rights reserved.
Date: 19 April 2001
Date Revised: 30 October 2001

Council on the Ageing (Australia)
Level 2, 3 Bowen Crescent, Melbourne Vic 3004
Tel (03) 9820 2655 Fax (03) 9820 9886
email cota@cota.org.au