tag:theconversation.com,2011:/au/topics/retirees-3958/articlesRetirees – The Conversation2023-12-20T19:05:20Ztag:theconversation.com,2011:article/2192172023-12-20T19:05:20Z2023-12-20T19:05:20ZIt’s not just about accumulating super. Australians need to learn how to spend their retirement savings<figure><img src="https://images.theconversation.com/files/566181/original/file-20231218-25-wecasm.jpg?ixlib=rb-1.1.0&rect=310%2C129%2C5440%2C3699&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/senior-woman-smartphone-makes-selfie-her-1422403571">Robert Kneschke/Shutterstock</a></span></figcaption></figure><p>Australia’s superannuation and retirement income system is complex and difficult to navigate.</p>
<p>Retirees need to make decisions on numerous issues where they have less than full information and understanding, both financial and non-financial. They also require access to retirement products to help them manage and balance income needs against longevity risk.</p>
<p>Recognising these issues, the government released a <a href="https://treasury.gov.au/consultation/c2023-441613">discussion paper</a> this month seeking views on three key issues: </p>
<ol>
<li><p>helping super fund members navigate the retirement income system</p></li>
<li><p>supporting superannuation funds to deliver better services</p></li>
<li><p>making retirement income products more accessible.</p></li>
</ol>
<p>Australia has one of the largest and most sophisticated pension systems in the world. Valued at more than <a href="https://www.apra.gov.au/quarterly-superannuation-statistics">A$3.5 trillion</a> as at September 2023, and is the <a href="https://www.thinkingaheadinstitute.org/research-papers/global-pension-assets-study-2023/">5th largest pension scheme</a> in terms of asset size.</p>
<p>It is also the <a href="https://www.mercer.com/insights/investments/market-outlook-and-trends/mercer-cfa-global-pension-index/">5th most highly rated retirement income system</a> internationally behind the Netherlands, Iceland, Denmark and Israel.</p>
<h2>What is wrong with the super system?</h2>
<p>But while the super system ranks highly in terms of integrity and sustainability, the numbers are not as flattering when it comes to “adequacy”.</p>
<p>Adequacy is the level of income available to retirees depending on their different circumstances. According to a recent <a href="https://www.mercer.com/insights/investments/market-outlook-and-trends/mercer-cfa-global-pension-index/">study</a>, Australia is ranked 20th out of 47 worldwide on the adequacy index.</p>
<p><a href="https://www.investmentmagazine.com.au/2023/02/purpose-of-super-law-to-herald-tax-reform/">Reform</a> in the <em>pre-retirement</em> phase of Australia’s retirement income scheme is ongoing and designed to support accumulating wealth for retirement.</p>
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<a href="https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Unidentified man taking notes as he puts money into a jar" src="https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/566184/original/file-20231218-21-vshzy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Much emphasis has been placed on accumulating super with less attention being given to actually using it.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/saving-money-man-hand-putting-coins-1933937894">iHumnoi/Shutterstock</a></span>
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</figure>
<p>These ongoing reforms have been designed to make superannuation easier to understand and to reduce much of the decision making required. They’ve been needed because of an apparent lack of skills, interest and financial literacy among Australians.</p>
<p>While the message that we need to save to be comfortable in retirement is getting through, the lack of information about how to manage these savings once we retire means many retirees are left to navigate the complex system as best they can.</p>
<p>Given the complexity and volatility of Australia’s financial system, it’s hardly surprising many of the decisions made by retirees don’t produce the best financial results. For example, more than <a href="https://treasury.gov.au/consultation/c2023-441613">84%</a> of retirement savings are held in account-based pensions which, if not properly managed, can run out. This is despite government and community awareness that outliving your savings is a real possibility.</p>
<p>About 50% of retirees currently withdraw at the minimum pension rate, which means many people experience a lower standard of living than what would normally be expected with the super they have accumulated. This can result in wealth not being used and instead being passed on to the next generation.</p>
<h2>Help is needed now because the retiree sector is booming</h2>
<p>Over the next decade there is going to be a big increase in the number of people retiring and transitioning from the accumulation phase of their super to the pension phase. It’s estimated <a href="https://treasury.gov.au/consultation/c2023-441613">2.5 million</a> Australians will move to the retirement phase in this period.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/super-has-become-a-taxpayer-funded-inheritance-scheme-for-the-rich-heres-how-to-fix-it-and-save-billions-202948">Super has become a taxpayer-funded inheritance scheme for the rich. Here's how to fix it – and save billions</a>
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</em>
</p>
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<p>Following the 2014 <a href="https://treasury.gov.au/publication/c2014-fsi-final-report">Financial System Inquiry</a>, the government introduced the <a href="http://www5.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s52.html">Retirement Income Covenant</a> in 2022 to force super fund trustees to develop a strategy that would provide better retirement outcomes for their members.</p>
<p>The strategy is based on retirees maximising their expected retirement income, managing expected risks to their retirement income and having flexible access to super funds during their retirement.</p>
<p>A 2022-23 review conducted by <a href="https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-766-implementation-of-the-retirement-income-covenant-findings-from-the-apra-and-asic-thematic-review/">Australian Prudential Regulation Authority and the Australian Securities and Investments Commission</a> found while trustees were providing more help to retirees, overall there was a lack of progress and urgency among trustees to improve retirement outcomes.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/should-i-put-more-money-into-my-super-what-are-the-benefits-and-can-i-take-it-out-before-retirement-if-i-need-it-201950">Should I put more money into my super? What are the benefits and can I take it out before retirement if I need it?</a>
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</em>
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<h2>How the system could be improved</h2>
<p>Several proposals have been put forward to improve the experiences and decision-making of retirees. These have included:</p>
<ul>
<li><p>improved support from and education by superannuation fund trustees </p></li>
<li><p>changing how people view their super savings from an accumulation of wealth to a system that enables drawdown of retirement savings over time to fund expenses.</p></li>
<li><p>providing an automatic rollover of retirement savings into an income-stream instead of allowing a lump sum withdrawal on retirement</p></li>
<li><p>expanding existing income products (that are starting to be offered by several financial institutions) which combine providing investment choice with a pension for life</p></li>
<li><p>setting up a MyRetire product that would run parallel to <a href="https://treasury.gov.au/programs-and-initiatives-superannuation/mysuper">MySuper</a> and provide a simple and cost-effective retirement income system for less engaged members. MySuper only applies to the accumulation phase. Once a member starts an income stream in retirement, their MySuper account ceases</p></li>
<li><p>improving access to financial planning advice which is shown to play a significant role in preparing Australians for retirement.</p></li>
</ul>
<p>The government, superannuation industry and the community all have a greater role to play in improving the financial outcomes and experiences of retirees.</p>
<p>With Australia’s ageing population, the need to better support retirees to achieve a dignified retirement is becoming more urgent.</p>
<p>All Australians expect and deserve a financially secure retirement.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/politics-with-michelle-grattan-jim-chalmers-says-australians-will-be-better-off-next-year-219905">Politics with Michelle Grattan: Jim Chalmers says Australians will be better off next year</a>
</strong>
</em>
</p>
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<img src="https://counter.theconversation.com/content/219217/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc Olynyk is Chair of the Financial Planning Education Council (FPEC). FPEC has been accrediting higher education courses and supporting research in financial planning for more than 20 years. FPEC seeks to raise the standard of financial planning education, and promote financial planning as a distinct learning area, as a profession, and as a career of choice for new students and career changers. FPEC is comprised of representatives from the higher education sector, financial planning practice, and professional associations. Fpec receives administrative support from the Financial Advice Association Australia.</span></em></p>Australians are good at accumulating savings for retirement but they are not so good at mapping out the best way to spend their savings once they retire.Marc Olynyk, Director of Financial Planning, Deakin Business School, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2013582023-06-05T15:57:30Z2023-06-05T15:57:30ZRetirement reinvented: how to find fulfilment later in life<figure><img src="https://images.theconversation.com/files/529124/original/file-20230530-15-95xzx2.jpg?ixlib=rb-1.1.0&rect=57%2C0%2C6397%2C4261&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.pexels.com/photo/elderly-woman-blowing-a-party-horn-7867916/">pexels/rdne stock project</a></span></figcaption></figure><p>Retirement can feel like a strange time for many people. Gone is the routine of work, your time is your own – in theory. How to stop chores from taking over can become a tricky balance. Some people retreat and return to work. Often, those that persevere find they are as busy as ever – but not always with the fun leisurely activities they were looking forward to.</p>
<p>It’s strange that this is so often the case because retirement is something many of us look forward to for most of our working lives. Indeed, it’s the one time in life when you can really devote yourself to hobbies and interests, leisure and pleasure.<br>
This uncertain picture means that approaching retirement can be a time of fear – <a href="https://www.forbes.com/sites/davidkudla/2020/03/13/6-ways-to-ease-your-retirement-anxiety/">retirement anxiety</a> is a real thing. So too are the <a href="https://www.health.harvard.edu/mens-health/retirement-stress-taking-it-too-easy-can-be-bad-for-you">retirement blues</a>. </p>
<p>When you add in potential health concerns and financial worries, it’s maybe not surprising that a recent survey found that more than half of <a href="https://www.independent.co.uk/money/more-than-half-of-over40s-feel-anxious-about-retiring-survey-suggests-b2146484.html">over-40s feel anxious about retiring</a>.</p>
<p>One retirement challenge is how to replace the <a href="https://www.degruyter.com/document/doi/10.1515/ger-2020-0109/html#:%7E:text=We%20find%20that%20retirement%20changes,effect%20on%20the%20network's%20size.">friendships</a> you make through work. Indeed, it seems the people who fare best in retirement find ways to cultivate connections. </p>
<p>The longest-running <a href="https://www.adultdevelopmentstudy.org/">study on human happiness</a> found the thing that makes us most happy in life is our relationships and positive social connections – they also help us to live longer too. Indeed, this 85-year-old Harvard study shows that maintaining quality relationships has a huge benefit for our physical and mental health and wellbeing.</p>
<p>Similarly, the charity The Centre for Better Ageing has found that <a href="https://ageing-better.org.uk/resources/later-life-2015-executive-summary">social connections</a> are just as important as money and health to a good later life.</p>
<h2>Beyond routine</h2>
<p>When it comes to retirement anxiety, <a href="https://link.springer.com/chapter/10.1007/978-3-030-71672-1_2">my research</a> with retirees shows that most people who have been retired for several years learn to manage their concerns and develop <a href="https://link.springer.com/chapter/10.1007/978-3-030-71672-1_5">satisfying and interesting lives</a>. </p>
<p>As with a lot of us, most of their time was taken up with home-based chores, self-care, looking after friends and relatives and serving the community – along with working really hard to keep fit, so as to “age well”.</p>
<p>But my research also found that negative notions of ageing can <a href="https://link.springer.com/book/10.1007/978-3-030-71672-1">become internalised</a> and prevent people from having fun and making new connections. </p>
<p>In my study, people said they were conscious that others might judge the <a href="https://link.springer.com/content/pdf/bfm:978-3-030-71672-1/1?pdf=chapter%20toc">suitability of their leisure choices</a>. While some rebels could only really enjoy a pastime if they knew their children would disapprove (think daytime drinking, gambling, watching TV, cycling on busy roads in a rainstorm and flirting with strangers), most were limited in their leisure choices by this concern.</p>
<p>Several did not have any pastimes they enjoyed. <a href="https://link.springer.com/chapter/10.1007/978-3-030-71672-1_6">Those who found a balance</a> had rich and varied leisure lives, but they preferred people from their own age group and a similar background, where they were less likely to be told how amazing they are, for their age.</p>
<h2>From anxiety to adventure</h2>
<p>While mixing with people from similar backgrounds and age groups can feel safe and comfortable. It can also mean you miss out on new and interesting experiences or having your worldviews challenged or expanded by spending time with different people</p>
<p>Retirement is the ideal opportunity to mix things up and gently expand your leisure repertoire. It’s a time to embrace the convivial in the presence of others, not just the usual people you see. </p>
<p>If you are happy with your leisure life, great. But if there is a little something missing, a little fun that could enhance it, consider adding in something new. Think outside the box of what’s “<a href="https://link.springer.com/chapter/10.1007/978-3-030-71672-1_5">suitable for your age group</a>”, (what does that even mean?). Indeed, age should not be a barrier to anything, age discrimination is illegal. So if you’re interested then it’s suitable.</p>
<p>If you have limited resources learn a language with <a href="https://www.duolingo.com/">Duolingo</a> in five minutes a day. Then when you’re ready, find a language conversation group and join them for a social event. </p>
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<img alt="Collage of older people doing fun activities." src="https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/529122/original/file-20230530-17-fp17wr.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Think of all the things you could do – then go and try one of them.</span>
<span class="attribution"><a class="source" href="http://www.pexels.com">Pexels</a></span>
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<p>Learn a song, you can do it yourself using YouTube tutorials. If you enjoy that, you could join a community choir, or drag your friends and family to a karaoke night. You could even pick up an instrument and see how it feels to add percussion. Alternatively, perfect a dance at home and if you like it try a dance class – <a href="https://www.youtube.com/watch?v=Oe4xqYSoiUo">pole dancing</a> has become very popular.</p>
<p>If you have a bit more time to spare, explore taking an interest to the next level. There are local groups for many activities, including rowing, climbing, circus skills, martial arts and horse riding – what takes your fancy?</p>
<p>Not an “organised group” person? Try Frisbee, a boomerang, kite flying, bike rides, skateboarding or roller skating. You don’t have to be with people, just being around them is interesting. </p>
<p>For more sedate options consider a cinema club, jazz club, poetry group, or start a quiz team. If you like the TV show <a href="https://www.channel4.com/programmes/the-great-pottery-throw-down">The Great Pottery Throw Down</a> join a ceramic studio and unlock your inner creativity. If you have a free afternoon or evening, look at <a href="https://www.eventbrite.co.uk/">Eventbright</a> and try something random, because we don’t really know what we love until we find it.</p>
<p>Nothing has to be a lifelong commitment. If you like it, carry on, if not, then move on to something else. Anything you try will make a good story to tell the younger people in your life – they need to know that later life is an adventure worth working towards. </p>
<p>So defy expectations, knock down those mental barriers and try something different. Start today and see where it takes you.</p><img src="https://counter.theconversation.com/content/201358/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tania Wiseman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Unlocking the full potential of retirement: embracing fun, connections and new experiences.Tania Wiseman, Associate Professor, Head of Therapies , Faculty of Medicine, Health and Life Science, Swansea UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2006952023-03-09T13:39:38Z2023-03-09T13:39:38ZTeacher pensions are becoming a bigger share of educational costs<figure><img src="https://images.theconversation.com/files/513265/original/file-20230302-24-d8akfb.jpg?ixlib=rb-1.1.0&rect=15%2C0%2C5018%2C3358&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Teacher pensions cost nearly $66 billion in 2020.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/teacher-holding-a-stack-of-books-royalty-free-image/57012360?phrase=retired%20teacher&adppopup=true">Jose Luis Pelaez Inc/Getty Images</a></span></figcaption></figure><p><em>The 2022 stock market plunge has taken a toll on some of the nation’s <a href="https://www.pionline.com/section/returns-tracker">largest state and municipal pension funds</a>, making it harder for governments to pay for future retirement benefits to millions of K-12 teachers and other public employees.</em></p>
<p><em>Here, <a href="https://education.wayne.edu/profile/aa0901">Michael Addonizio</a>, an education policy expert at Wayne State University, provides insight on how teacher pensions are affecting K-12 school budgets overall and what, if anything, can be done to better manage pension systems and close funding gaps.</em></p>
<h2>1. Is there enough money to pay teacher pensions?</h2>
<p>Yes and no. There is enough money to pay pension benefits to current retirees. But there is not enough money to pay all promised benefits to future retirees. </p>
<p>U.S. teacher pension funds collectively manage <a href="https://equable.org/teacher-pensions-in-2022/">about US$3 trillion in assets</a>. These dollars are invested in various ways – stocks, bonds, real estate, foreign currency, and other ways. But these assets held by the retirement plans are generally less than the plans’ liabilities – that is, the projected cost of benefits promised to future retirees. As of 2022, this gap between assets and liabilities is <a href="https://equable.org/teacher-pensions-in-2022/">about $878 billion</a>. Put another way, the ratio of assets to liabilities is about 77%. This ratio is down from about 84% in 2021, but is higher than any other year since 2008.</p>
<p>The amount spent on teacher retirement costs in 2020 – <a href="https://equable.org/hidden-funding-cuts/">$65.9 billion</a> – represented 5.5% of total state and local K-12 spending. </p>
<p>The problem is that these <a href="https://equable.org/hidden-funding-cuts/">retirement costs have been growing faster</a> than total K-12 expenditures for decades. In 2001, retirement costs amounted to only 1.3% of total state and local school spending. </p>
<p>The growth in teacher retirement costs is due mostly to an increase in payments for unfunded pension liabilities, often referred to as pension debt. This is the amount of money that states and municipalities pay annually into their retirement systems to cover previously unfunded liabilities – that is, the shortfall that a pension fund needs to pay all future promised benefits.</p>
<h2>2. How do these pension funding shortfalls occur?</h2>
<p>Every year, pension planners have to make assumptions about how fast teacher salaries will grow, how many teachers will teach long enough to qualify for a pension, how long qualified retired teachers will live and collect benefits and how the pension fund’s investments will perform. If all these assumptions are correct and the plan’s expected assets cover its expected liabilities, the plan is considered fully funded.</p>
<p>But the typical teacher pension plan <a href="https://www.brookings.edu/blog/brown-center-chalkboard/2020/02/25/teacher-pension-plans-are-getting-riskier-and-it-could-backfire-on-american-schools/">has not been fully funded</a> at any point since about the year 2000. Overly optimistic investment assumptions are often the <a href="https://www.brookings.edu/blog/brown-center-chalkboard/2020/02/25/teacher-pension-plans-are-getting-riskier-and-it-could-backfire-on-american-schools/">biggest part of unfunded liabilities</a>. In response, states or big cities often redirect money from school operating budgets into the pension funds. But these governments often <a href="https://direct.mit.edu/edfp/article-abstract/5/4/402/10127/An-Introduction-to-Teacher-Retirement-Benefits?redirectedFrom=fulltext">fail to make these payments in full</a>. </p>
<p>States and cities face fiscal pressures from other spending demands and from tax collections that fail to keep pace. Pushing some unfunded pension liability costs into the future is often seen as less painful than cutting current government programs or raising taxes. But skimping on covering costs for future retirees often compounds the system’s liability problem over time.</p>
<p>In 2021, fully <a href="https://equable.org/hidden-funding-cuts/">69% of teacher retirement costs</a> went to cover unfunded pension liabilities, up from 17% in 2001. In other words, the cost of future benefits is growing faster than the cost of current-year benefits. </p>
<p>Could it be due to increasingly generous retirement benefits? No. A recent report by the Equable Institute, a bipartisan nonprofit that studies public pensions and advises employees, communities and policymakers, concludes that the average value of lifetime benefits for new teachers is <a href="https://equable.org/hidden-funding-cuts/">about $100,000 less</a> than for their more senior colleagues. </p>
<p>Rather, unfunded pension liabilities can rise because of downturns in the financial market, lowering the systems’ investment earnings. Also, they may increase when schools hire more teachers and support staff, increasing the numbers of workers in the pension system. It can also be due to the <a href="https://www.cnbc.com/2022/11/02/fed-raises-borrowing-costs-with-another-jumbo-interest-rate-hike.html">rising cost of borrowing</a>, </p>
<h2>3. What does this mean for education funding?</h2>
<p>As more public dollars flow to teacher retirement systems, fewer resources are available for schools and classrooms. From 2002 to 2020, <a href="https://equable.org/hidden-funding-cuts/">total state and local K-12 spending rose 33%</a>, while teacher retirement spending rose 220%. Nationally, and in most states, teacher pension costs have been rising faster than K-12 spending for the past two decades. States then <a href="https://equable.org/hidden-funding-cuts/">take money from state funds</a> normally dedicated to school operations and move them to the pension fund. The result has been less spending for school operations, in the form of either spending cuts or a smaller share of a growing spending pie.</p>
<p>For example, in the 2022-23 fiscal year, my state of <a href="https://www.house.mi.gov/hfa/PDF/Summaries/SchAid_Exec_Rec_Summary_fy23-24.pdf">Michigan will pay nearly $3 billion</a> from the state School Aid Fund into the state-administered Public School Employees Retirement System to cover future pension costs. However, while this move will lower the amount of unfunded liabilities in the system, these dollars will come directly from state funds intended to support general K-12 school operations.</p>
<p>This practice has been repeated in many states over the past two decades. According to the Equable Institute study, the “<a href="https://equable.org/hidden-funding-cuts/">hidden cuts</a>” of using K-12 funds to cover pension costs have risen from $457 per student in 2001 to $1,290 per student in 2021 – a 182% increase in constant 2021 dollars.</p>
<h2>4. How can the problem be solved?</h2>
<p>The solutions rest with the states, and there is no “one size fits all” remedy. Each state has its own K-12 funding system and <a href="https://direct.mit.edu/edfp/article-abstract/5/4/402/10127/An-Introduction-to-Teacher-Retirement-Benefits?redirectedFrom=fulltext">teacher retirement plans</a>, which are governed by many rules that are embedded in state constitutions and laws. These state laws vary. For example, teachers in 15 states, including California and Texas, <a href="https://www.fool.com/retirement/2018/10/07/why-does-social-security-leave-out-teachers-in-the.aspx">aren’t covered by the Social Security system</a>. But there are some common issues and ways to address them.</p>
<p>One common problem is transparency. While it’s usually relatively easy to see how much states, districts and schools are spending for operations, it’s much more difficult to find public data on teacher retirement costs, particularly pension liability costs, because the data is <a href="https://www.brookings.edu/blog/brown-center-chalkboard/2017/03/07/another-reason-to-stop-ignoring-teacher-pensions/">remarkably scarce</a>. </p>
<p>Pension dollars are as much a part of public education budgets as spending on teacher and staff salaries, books, buses and the rest. Careful monitoring and reporting of pension costs, both payments and liabilities, may improve management of these costs before they inflict more damage on budgets for teaching and learning.</p>
<p>Secondly, many states have reduced their financial support for K-12 schools in recent years. The share of personal income given to K-12 schools has <a href="https://www.schoolfinancedata.org/the-adequacy-and-fairness-of-state-school-finance-systems-2023/">steadily declined</a> since the 2007-2009 Great Recession in 39 states. </p>
<p>States could protect school operating budgets by using general fund revenue to pay pension liability costs, not dedicated K-12 aid. Local districts could be responsible for the cost of current-year retirement benefits but cannot do much to manage unfunded pension liabilities. States could cover pension debt costs without reducing state aid for school operations, but it would require raising taxes or cutting programs in other areas.</p>
<p>To begin moving in this direction, states could restore their pre-recession levels of tax effort for K-12 education. <a href="https://www.schoolfinancedata.org/the-adequacy-and-fairness-of-state-school-finance-systems-2023/">A recent study</a> by researchers from Rutgers University, the University of Miami and the Albert Shanker Institute concluded that had all states done this by 2016, schools would have reaped $288 billion in added funding. </p>
<p>Trading off pension support against school operating funds is not an inevitable result of rising pension costs. Whether states have the economic means or political will to address this problem effectively remains to be seen.</p><img src="https://counter.theconversation.com/content/200695/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Addonizio does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>States are struggling to cover pension costs for public school teachers. A education policy expert weighs in on potential solutions.Michael Addonizio, Professor of Educational Leadership and Policy Studies, Wayne State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2013932023-03-08T08:33:49Z2023-03-08T08:33:49ZPolitics with Michelle Grattan: Chair of Retirement Income Review, Mike Callaghan, on reforming superannuation<p>Treasurer Jim Chalmers sparked a political row when he announced a tax hike on superannuation concessions for accounts with balances over $3 million, from 15% to 30%, to begin in 2025. Polling indicates the move has broad support from the public, although any change to super is always controversial. Opposition leader Peter Dutton has promised the change would be reversed by a Coalition government. </p>
<p>Mike Callaghan, a former treasury official, chaired the Retirement Income Review that was handed to the Morrison government in 2020.</p>
<p>Callaghan sees the Chalmers’ change to super as “an important step”. </p>
<p>“I think one of the most encouraging things is the fact that this issue regarding equity and sustainability of superannuation, and the measure, has taken place now because it’s a very controversial topic […] The fact that we have seen movement is very encouraging.” </p>
<p>“There’s a lot more that needs to be done in terms of improving the equity and sustainability of the retirement income system and superannuation in particular.</p>
<p>"The unfortunate thing is, given the controversy around it, it might kerb enthusiasm […] towards some more significant changes for some time. That could be the downside of this.”</p>
<p>The superannuation tax concessions are skewed heavily towards higher income earners. Observers have noted that superannuation has become an inheritance vehicle in many cases. Ageing Australians are passing their assets to family rather than using the “nest egg” for their retirement. Callaghan sees this as a “significant issue”. </p>
<p>“It’s fine if people want to leave an inheritance to their children, but what we’re seeing now is that’s not generally a conscious decision of people. We’re seeing across the system now, people not drawing [superannuation savings] down to use them for the intended purpose, which was to support the standard of living in retirement. </p>
<p>"The problem is […] that people don’t know what to do to make the best use of the assets they have in retirement. A lot of it is ignorance, a lot of it is confusion, a lot of it is that having a savings mentality has been drummed into them. Build up your nest egg. Don’t spend your nest egg.”</p>
<p>People need advice to navigate the system “and they’re not getting the advice. The biggest deficiency we’ve seen that’s leading to this outcome, I think, is that people don’t get advice. I think it’s about only 10% of retirees actually get advice entering retirement.</p>
<p>"They need a positive push that they do need advice. When you see the surveys of why people don’t get advice, they say ‘it’s too costly’ and they say, ‘but I don’t have that big financial asset, so I’m not one that has that need for financial advice’. There’s the other one of lack of trust.”</p>
<p>Home ownership is a major factor in what life will be like for retirees. “If you own your own house, you don’t have to pay rent and you have a substantial asset […] that you can draw on to support your retirement.”</p>
<p>But Callaghan doesn’t think younger people should be able to access their super for a house deposit. “While [having a home is] important, solving the problem of helping first home owners get into housing is not going to be solved by tweaks to the superannuation system. It’s not going to achieve its objective at all, as many people say, it’s likely to just add extra pressure to house prices and there is a cost, this very significant cost to the individual of letting them access superannuation.”</p><img src="https://counter.theconversation.com/content/201393/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Michelle Grattan and Mike Callaghan discuss the government's change to super, the complexities regarding it, and whether young people should be able to access it for a house depositMichelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1923712022-10-13T18:57:37Z2022-10-13T18:57:37ZSoaring inflation prompts biggest Social Security cost-of-living boost since 1981 – 6 questions answered <figure><img src="https://images.theconversation.com/files/489641/original/file-20221013-11-56zp8r.jpg?ixlib=rb-1.1.0&rect=159%2C199%2C6243%2C4178&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Social Security benefits have lost their purchasing power as inflation has soared in 2022.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/senior-man-with-face-mask-buying-vegetables-in-royalty-free-image/1257463364?phrase=retiree%20shopping">Luis Alvarez/DigitalVision via Getty Images</a></span></figcaption></figure><p><em>Social Security is set to <a href="https://www.ssa.gov/news/press/releases/2022/#10-2022-2">boost the benefits it provides retirees</a> by 8.7%, the biggest cost-of-living adjustment since 1981. It comes as sky-high inflation continues to eat into incomes and savings.</em></p>
<p><em>The changes are set to take effect in January 2023 and were announced following the release of the <a href="https://www.bls.gov/news.release/cpi.nr0.htm">September 2022 consumer price index report</a>, which showed inflation <a href="https://www.reuters.com/markets/us/us-consumer-prices-increase-more-than-expected-september-weekly-jobless-claims-2022-10-13/">climbing more than expected</a> during the month, by 0.4%.</em></p>
<p><em>The automatic adjustment will surely come as a relief to tens of millions of retirees and those who receive <a href="https://www.ssa.gov/ssi/">supplemental security income</a> who may be struggling to afford basic necessities as inflation has accelerated throughout 2022. But an annual adjustment wasn’t always the case – and other government benefits and programs deal with inflation differently.</em></p>
<p><em>John Diamond, who <a href="https://www.bakerinstitute.org/expert/john-w-diamond">directs the Center for Public Finance at Rice’s Baker Institute</a>, explains the history of the Social Security cost-of-living, or COLA, increase, what other benefits are adjusted for inflation and why the government makes these changes.</em></p>
<h2>1. How fast is the cost of living rising?</h2>
<p>The latest data, for September, shows <a href="https://www.bls.gov/news.release/cpi.nr0.htm">average consumer prices are up 8.2%</a> from a year earlier. The monthly gain of 0.4% was double what economists <a href="https://www.reuters.com/markets/us/us-consumer-prices-increase-more-than-expected-september-weekly-jobless-claims-2022-10-13/">surveyed by Reuters had expected</a>. </p>
<p>More troubling, so-called <a href="https://fred.stlouisfed.org/series/CPILFESL">core inflation</a> – which excludes volatile food and energy prices – gained even more in September, ticking up by 0.6%. Core inflation is a measure that’s <a href="https://www.cnbc.com/2022/07/29/inflation-figure-that-the-fed-follows-closely-hits-highest-level-since-january-1982.html">closely watched by the Federal Reserve</a>, as it helps show how pervasive and persistent inflation has become in the economy. </p>
<h2>2. How are Social Security benefits adjusted for inflation?</h2>
<p>Automatic adjustments to Social Security benefits began in 1975 after President Richard Nixon signed the 1972 <a href="https://www.ssa.gov/history/1972amend.html">Social Security amendments</a> into law.</p>
<p>Before 1975, Congress had to act each year to increase benefits to offset the effects of inflation. But this was an inefficient system, as politics would often be injected into a simple economic decision. Under this system, an increase in benefits <a href="https://www.ssa.gov/history/50mm2.html">could be too small</a> or too large, or could fail to happen at all if one party blocked the change entirely.</p>
<p>Not to mention that with the baby boomers – those born from 1946 to 1964 – entering the labor force it was already clear that Social Security would face long-term funding issues in the future, and so <a href="https://www.ssa.gov/history/tally1972b.html">putting the program on autopilot</a> reduced the political risk faced by politicians. </p>
<p>Since then, benefits have climbed automatically by the average increase in consumer prices during the third quarter of a given year from the same period 12 months earlier. This is based on a <a href="https://fred.stlouisfed.org/series/CWUR0000SA0#0">version of the consumer price index</a> meant to estimate price changes for working people and has been rising slightly faster than the overall pace of inflation.</p>
<p>While helpful, these inflation adjustments are backward-looking and imperfect. For example, 2022 Social Security benefits <a href="https://www.ssa.gov/cola/">increased by 5.9%</a> from the previous year, even though inflation throughout this year <a href="https://fred.stlouisfed.org/series/CPIAUCSL#0">has been significantly higher</a> – which means the higher benefits weren’t covering the higher cost of living. Thus, the 2023 increase in benefits primarily offsets what was lost over the previous year. </p>
<figure class="align-center ">
<img alt="A white hand holds a card reading social security" src="https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/489656/original/file-20221013-23-gha634.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Millions of retirees and other will soon see a big jump in their Social Security benefits.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/SocialSecurity/6a2e67a3cc6849b8857dee55fa6005ae/photo?Query=inflation&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=8106&currentItemNo=4">AP Photo/Jenny Kane</a></span>
</figcaption>
</figure>
<h2>3. Are the benefits taxable?</h2>
<p>A growing portion of Social Security benefits are taxed in the same way as ordinary income, except at different threshold with various caps and percentages. <a href="https://www.socialsecurityintelligence.com/inflation-social-security/">Only 8% of benefits were subject to taxation</a> in 1984, but that’s climbed to almost 50% in recent years. That percentage will likely continue to increase as the taxable thresholds are not adjusted for inflation. </p>
<p>For example, if an individual filer’s income, including benefits, is below US$25,000, <a href="https://www.irs.gov/newsroom/dont-forget-social-security-benefits-may-be-taxable">none of that is taxed</a>. But up to 50% of a person’s benefits may be taxed at incomes of $25,000 to $34,000. After that, up to 85% of their benefits may be taxed. </p>
<p>Such a big increase in Social Security benefits likely means some people who paid no tax will now have to pay some, while others will see larger increases in their tax liability. </p>
<h2>4. Why does the government adjust benefits for inflation?</h2>
<p><a href="https://www.bloomberg.com/news/articles/2022-06-30/soaring-inflation-to-hit-britain-harder-than-any-other-major-economy-boe-warns">Rapid gains of inflation</a>, like the kind the U.S. and many other countries are currently experiencing, can have significant impacts on the finances of households and businesses. </p>
<p>For example, it might mean seniors cutting back on heating or food. Government policies generally try to account for this to reduce the negative impacts that rising prices can have on those with limited or fixed resources.</p>
<p>In addition, reducing the impacts of price changes creates a more efficient and fair allocation of resources and reduces the arbitrary outcomes that would otherwise occur.</p>
<h2>5. What other government programs typically get a COLA?</h2>
<p>Other government programs and benefits also increase to account for inflation. </p>
<p>The U.S. Department of Agriculture <a href="https://www.fns.usda.gov/snap/allotment/COLA">estimates the cost of its Thrifty Food Plan</a> each June and adjusts Supplemental Nutrition Assistance Program or SNAP benefits – formerly known as food stamps – in October of each year. Beginning in October 2022, food stamp benefits <a href="https://www.cnn.com/2022/09/30/politics/snap-food-stamps-benefits-inflation-increase/index.html">rose by 12.5%</a>, which helps make up for the <a href="https://fred.stlouisfed.org/series/CPIUFDSL#0">largest increases in food prices since the 1970s</a>. </p>
<p>In addition, the federal <a href="https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines">poverty level is adjusted</a> for changes in the consumer price index annually by the Department of Health and Human Services, an adjustment that affects a number of government-provided benefits, such as housing benefits, health insurance and others, including SNAP benefits.</p>
<h2>6. Does the tax system also adjust for inflation?</h2>
<p>While some aspects of the tax code adjust for inflation, others do not. </p>
<p>For example, income tax bracket thresholds, the size of the standard deduction, alternative minimum tax parameters and estate tax provisions <a href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022">all increase annually for inflation</a>. That means come tax filing season next year, U.S. tax filers will likely see big changes in all these items. </p>
<p>But examples of provisions that are not adjusted for inflation include the maximum value of the child tax credit and the $10,000 cap on the deduction of state and local taxes. In addition, the threshold that determines who is liable for the net investment income tax – the additional 3.8% tax on investment and passive income for taxpayers above a certain income level – doesn’t adjust, which means each year more individuals are subject to it.</p><img src="https://counter.theconversation.com/content/192371/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John W. Diamond does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Social Security is increasing benefits by 8.7%, beginning in January 2023, to offset the surging cost of living in the US.John W. Diamond, Director of the Center for Public Finance at the Baker Institute, Rice UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1582162021-05-12T19:59:49Z2021-05-12T19:59:49ZSoaring housing costs are pushing retirees into areas where disaster risks are high<p>The impacts of a <a href="https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert/coronavirus-covid-19-restrictions/coronavirus-covid-19-advice-for-international-travellers">closed border</a> and <a href="https://theconversation.com/managed-retreat-of-settlements-remains-a-tough-call-even-as-homes-flood-and-coasts-erode-157595">recent floods</a> have highlighted the challenges facing older Australians who live permanently in caravan parks and manufactured home estates. These properties have long provided affordable housing for retirees, particularly those who rely on the age pension and have limited assets or housing equity. Residents typically own their caravan or mobile home and pay a regular site rental.</p>
<p>Two trends are emerging as problems for these residents:</p>
<ol>
<li><p>caravan parks and manufactured home estates are undergoing “gentrification” as they transform into high-end domestic tourism (with border closures boosting demand) and lifestyle estates</p></li>
<li><p>many properties that house older Australians are increasingly exposed to natural hazards such as fire and floods. </p></li>
</ol>
<p>The interrelated issues of a <a href="https://theconversation.com/housing-affordability-is-a-problem-heres-why-super-for-housing-isnt-a-solution-158699">shortage of affordable housing</a>, <a href="https://theconversation.com/managed-retreat-of-settlements-remains-a-tough-call-even-as-homes-flood-and-coasts-erode-157595">development in hazard-affected locations</a> and gentrification are funnelling the most disadvantaged Australians into the most problematic locations. Recent fieldwork in the Hastings and Manning river regions of New South Wales identified a number of caravan parks and manufactured home estates close to or even next to rivers that had been flooded. The most flood-affected properties tended to be those with the most affordable housing.</p>
<figure class="align-center ">
<img alt="aerial view of flooded caravans, cabins and houses" src="https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=342&fit=crop&dpr=1 600w, https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=342&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=342&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=430&fit=crop&dpr=1 754w, https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=430&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/399355/original/file-20210507-22-15qxf8n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=430&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dunbogan Caravan Park in northern New South Wales during the March 2021 floods.</span>
<span class="attribution"><span class="source">Image: David Wainwright</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-are-manufactured-home-estates-and-why-are-they-so-problematic-for-retirees-145752">What are manufactured home estates and why are they so problematic for retirees?</a>
</strong>
</em>
</p>
<hr>
<h2>Why are properties being gentrified?</h2>
<p>The sector is far from homogenous. Properties range from expensive upmarket holiday parks and lifestyle estates to permanent residents in caravan parks and older manufactured home estates.</p>
<p>Large caravan park operators, such as Big 4 Holiday Parks and Discovery Parks, provide an upmarket holiday option. These feature manicured lawns and offer cabins, glamping and powered sites. On-site management provides regularly cleaned communal cooking facilities and ablution blocks. </p>
<p>Many feature panoramic views of oceans and waterways, which add to the upmarket offering. Operators focus on properties where maximum value can be extracted from holidaymakers. These have come a long way from the cheap caravan parks with dry grass, a few trees and rundown amenities. </p>
<p>The industry has also benefited from international border closures resulting in a boom in Australians holidaying at home. </p>
<p>But these trends leaves little room for permanent residents – especially low-income residents – as tourists are unlikely to pay premium prices to stay in parks with retirees in second-hand caravans. Operators usually partition permanent residents from the holidaymakers or, increasingly, remove permanent residents altogether.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/older-and-poorer-retirement-income-review-cant-ignore-the-changing-role-of-home-131151">Older and poorer: Retirement Income Review can't ignore the changing role of home</a>
</strong>
</em>
</p>
<hr>
<p>Manufactured home estates are also gentrifying. They are increasingly branded as over-50s estates, with resort-style facilities including community centres and swimming pools. The operators include listed organisations Ingenia, Stockland and Lifestyle Communities, and private organisations Hampshire Villages and National Lifestyle Villages. </p>
<p>Manufactured home estate living is advertised as being affordable, as relocatable homes are exempt from stamp duty, land tax and council rates. But advertised prices for relocatable homes in lifestyle estates can be over $700,000 and are anything but affordable for people on lower incomes.</p>
<p>By requiring incoming residents to buy new and used homes through them, operators can achieve profit margins and agency fees. The more expensive the relocatable home, the higher the margins and fees. This is why operators have moved relentlessly upmarket. </p>
<p>Many lifestyle estate operators have embarked on significant expansion programs. They are actively buying up and redeveloping caravan parks and manufactured home estates. This leaves a shrinking pool of properties, owned by smaller operators, that still offer affordable housing. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/retiree-home-ownership-is-about-to-plummet-soon-little-more-than-half-will-own-where-they-live-115255">Retiree home ownership is about to plummet. Soon little more than half will own where they live</a>
</strong>
</em>
</p>
<hr>
<h2>Why are hazard risks higher at affordable sites?</h2>
<p>Caravan parks and manufactured home estates are not classed as permanent housing. This means they can be developed on a wider range of sites, including hazard-affected land. </p>
<p>Sites close to beaches and waterways have long been popular as they provide recreational amenity to holidaymakers and residents. The flip side is that these locations are more prone to natural hazards such as storms and flooding.</p>
<p>Large operators have selectively bought up caravan parks and manufactured home estates to create more upmarket offerings. As they spend money upgrading communal facilities and ablution blocks, their preference has been for properties that are not hazard-affected. </p>
<p>As a result, many of the caravan parks and manufactured home estates that remain affordable housing are in the most hazard-affected locations. </p>
<figure class="align-center ">
<img alt="caravans under trees in a caravan park" src="https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/399354/original/file-20210507-17-1m4lvb6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dunbogan Caravan Park, pictured after the flood, remains affordable but that comes with a risk for residents.</span>
<span class="attribution"><span class="source">Lois Towart</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>What happens when disaster strikes?</h2>
<p>During the recent floods in the Port Macquarie, Old Bar and Hawkesbury regions of NSW, it was permanent residents in caravan parks and non-lifestyle manufactured home estates who were most badly affected. </p>
<p>For many of these residents, the caravan or relocatable home (and its contents) was their major asset. While some may initially float, the water-damaged dwelling is usually uninhabitable. There is often little left to salvage.</p>
<p>Local governments, in addition to the cost of repairing damaged infrastructure, now have to deal with increasing numbers of homeless people. Many have to rely on the generosity of the local community.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/thousands-of-flood-stricken-people-are-sheltering-in-schools-clubs-and-halls-but-we-can-do-better-157584">Thousands of flood-stricken people are sheltering in schools, clubs and halls – but we can do better</a>
</strong>
</em>
</p>
<hr>
<p>All is not lost. There are creative solutions. </p>
<figure class="align-center ">
<img alt="housing on stilts in a residential village" src="https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/399356/original/file-20210507-14-ohnjo3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A creative solution, putting housing on stilts, in in Riverside Residential Village, Port Macquarie.</span>
<span class="attribution"><span class="source">Image: Lois Towart</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>For example, a manufactured home estate in Port Macquarie, Riverside Residential Village, is on a flood-prone site. The solution is relocatable dwellings on stilts. The space underneath can then be used for car parking and storage. However, some older people might find the stairs a bit of a problem. </p>
<hr>
<p><em>This story is part of a series The Conversation is running on the nexus between disaster, disadvantage and resilience. It is supported by a philanthropic grant from the Paul Ramsay foundation. You can read the rest of the stories <a href="https://theconversation.com/au/topics/disaster-and-resilience-series-97537">here</a>.</em></p><img src="https://counter.theconversation.com/content/158216/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lois Towart owns shares in Ingenia and Stockland. </span></em></p><p class="fine-print"><em><span>Kristian Ruming receives funding from the Australian Research Council and Landcom.</span></em></p>Low-income retirees have long found affordable housing in caravan parks and relocatable home estates. But they are becoming harder to find, and often come with a risk of hazards such as flooding.Lois Towart, Lecturer in Property Economics, University of Technology SydneyKristian Ruming, Associate Professor in Urban Geography, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1457522020-09-22T20:06:55Z2020-09-22T20:06:55ZWhat are manufactured home estates and why are they so problematic for retirees?<figure><img src="https://images.theconversation.com/files/357798/original/file-20200914-22-nwzr6n.JPG?ixlib=rb-1.1.0&rect=15%2C0%2C5152%2C3383&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Author provided</span></span></figcaption></figure><p>Some operators <a href="http://minerva.mq.edu.au:8080/vital/access/manager/Repository/mq:71580">have predicted</a> manufactured home estates will be the most popular type of retirement living in the near future, surpassing retirement villages.</p>
<p>But enthusiastic development of manufactured home estates as retirement communities is creating future problems for the older Australians who call them home. As explored in <a href="http://minerva.mq.edu.au:8080/vital/access/manager/Repository/mq:71580">recently published PhD research</a> in New South Wales, these home estates are often situated in locations affected by flooding and bushfire, and as the residents own the relocatable home, they bear the cost of these hazards.</p>
<h2>What is a manufactured home estate?</h2>
<p>Manufactured home estates evolved from caravan parks and have a similar business model. The operator owns the land and rents individual dwelling sites to residents who then purchase a relocatable home and pay a fortnightly/monthly rental to the operator. Rental returns to operators are very attractive, with listed operators <a href="https://onlinereports.irmau.com/2019/INA/">openly extolling</a> the financial performance of these investments.</p>
<p>Under <a href="https://www.legislation.nsw.gov.au/view/html/inforce/current/epi-1993-0320#sec.2">NSW state planning legislation</a>, where the research was conducted, manufactured home estates can be developed on land where caravan parks are permitted, including rural land, flood affected land and other hazard affected land. Such land is generally available at a cheaper price compared to sites zoned for residential uses. The result is medium density housing occupied by older Australians in locations where similar permanent residential development would not be permitted.</p>
<p>For example, an agglomeration of <a href="http://minerva.mq.edu.au:8080/vital/access/manager/Repository/mq:71580">seven manufactured home estates</a>, all or partially operated as retirement housing, are located around Anna Bay in the Port Stephens area. The two manufactured home estates most recently established were on rural land where development approval for caravan park had been received. This was then converted to development approval for a manufactured home estate. Neither property had been operated as a caravan park.</p>
<p>Four of these manufactured home estates around Anna Bay are wholly or partially on flood-affected land (see map below). This in turn restricts the development of permanent residential housing, yet these sites can be developed with manufactured home estates.</p>
<p>In other states, similar interaction between local and state government planning have facilitated the establishment of these estates on sites where caravan parks are permitted. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Map showing housing estates in flood affected regions." src="https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357841/original/file-20200914-16-kujope.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Manufactured housing estates in flood affected regions.</span>
<span class="attribution"><span class="source">Author provided.</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Why this is such a problem</h2>
<p>Manufactured home estates situated on hazard affected lands create problems for residents as they own their relocatable home and bear the cost of any damage. In the event of flooding or bushfire, residents could lose their homes unless insurance was available and affordable.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/vertical-retirement-villages-are-on-the-rise-and-theyre-high-tech-too-96916">Vertical retirement villages are on the rise, and they're high-tech too</a>
</strong>
</em>
</p>
<hr>
<p>The proliferation of manufactured home estates in many coastal and rural locations, similar to Anna Bay, creates challenges for local governments. Such locations are distant from retail, commercial and community amenities, resulting in increasing populations of older people in locations away from required services. </p>
<p>Few of these locations have long-term strategic and infrastructure plans to accommodate medium density housing, let alone housing for older people. Residents without private transport have difficulty accessing services and amenities. As they age in place, their level of mobility can be expected to decline, highlighting the shortcomings of these locations. </p>
<p>Once they have moved in, residents may not be able to afford to relocate if they need to. Manufactured home estate living is promoted on the basis of its affordability, as the purchase price of relocatable homes can be lower than nearby permanent residential housing. </p>
<p>Many manufactured home estates are affordable, incoming prices in the region were as low as A$100,000 for a second-hand dwelling (advertised on Gumtree at the time of my research), with <a href="http://minerva.mq.edu.au:8080/vital/access/manager/Repository/mq:71580">most around $350,000 to $450,000</a>. However, prices can be much higher, with a new dwelling in a Port Stephens estate being <a href="http://minerva.mq.edu.au:8080/vital/access/manager/Repository/mq:71580">advertised for $660,000</a>. While I was undertaking my research in Port Macquarie, participants reported to me prices in excess of $800,000.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/retiree-home-ownership-is-about-to-plummet-soon-little-more-than-half-will-own-where-they-live-115255">Retiree home ownership is about to plummet. Soon little more than half will own where they live</a>
</strong>
</em>
</p>
<hr>
<p>Many retirees can anticipate remaining in a manufactured home estate for 20 years or more. After 20 years, a relocatable home has minimal value, leaving residents with few assets with which to access residential aged care, if needed. When the total cost of house purchase and site rental for 20 years is compared with living in conventional residential housing, manufactured home estates living is <a href="https://www.tandfonline.com/doi/abs/10.1080/08111149608551606">less affordable</a>.</p>
<p>Not all manufactured home estates are in hazard affected locations, but their ability to be located on sites where caravan park permission has been received creates a planning loophole. </p>
<p>This loophole has arisen through the interaction of local government planning controls with NSW State Environmental Planning Policies. Following rejection of a development application for a manufactured home estate at the local government level, operators are able to get approval at the state level. </p>
<p>The result is concentrations of older Australians living in hazard affected locations from which they may not be able to afford to leave.</p><img src="https://counter.theconversation.com/content/145752/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lois Towart owns shares in Ingenia and Stockland.
</span></em></p><p class="fine-print"><em><span>Kristian Ruming receives funding from the Australian Research Council and Landcom. </span></em></p>Manufactured home estates are popping up as a “cheaper” option for retirees. But they’ll end up costing more, and could be in hazard prone or affected areas.Lois Towart, Lecturer in Property Economics, University of Technology SydneyKristian Ruming, Associate Professor in Urban Geography, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1459912020-09-17T11:28:26Z2020-09-17T11:28:26ZPoll workers on Election Day will be younger – and probably more diverse – due to COVID-19<figure><img src="https://images.theconversation.com/files/358171/original/file-20200915-22-1pff5dj.jpg?ixlib=rb-1.1.0&rect=37%2C117%2C2746%2C1524&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">With its largely white and older workers, this poll site in Maine is typical of poll sites across the U.S.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/poll-workers-check-in-voters-as-they-make-their-way-to-the-news-photo/495619496?adppopup=true">Shawn Patrick Ouellette/Portland Portland Press Herald via Getty Images</a></span></figcaption></figure><p>Election officials are <a href="https://www.axios.com/poll-workers-coronavirus-elderly-young-people-b50c1c36-385c-49dc-9585-06fdd9b729c6.html">busily trying to recruit</a> younger volunteers to staff the United States’ roughly <a href="https://www.ncsl.org/research/elections-and-campaigns/polling-places.aspx">230,000 polling sites</a> on Election Day in November.</p>
<p>Many of the nation’s poll workers are reluctant to work during the pandemic because they are, <a href="https://www.pewresearch.org/fact-tank/2020/04/06/older-people-account-for-large-shares-of-poll-workers-and-voters-in-u-s-general-elections/">overwhelmingly, older</a> and at <a href="https://www.npr.org/2020/08/05/894331965/wanted-young-people-to-work-the-polls-this-november">high risk of severe COVID-19 infection</a>. </p>
<p>Poll workers are the gatekeepers of democracy. They check people in, verify their identity and determine their eligibility to vote. If voters do not appear on the rolls, poll workers trouble-shoot the problem or offer a provisional ballot. Poll workers also explain how the machines work, answer questions about the ballot and field complaints about long lines. </p>
<p>For all this, they <a href="https://www.ncsl.org/research/elections-and-campaigns/election-poll-workers637018267.aspx">are paid modestly</a> – <a href="https://www.newscentermaine.com/article/news/politics/elections/portland-gets-more-than-100-poll-worker-applications-on-monday-encourages-more-to-apply/97-62b4eff8-4b29-4833-bbfe-57974387df13">US$12 an hour in Portland</a>, Maine, or up to <a href="https://vote.nyc/page/poll-worker-positions">$280 a day in New York City</a>. So local election officials are used to facing <a href="https://www.liebertpub.com/doi/full/10.1089/elj.2014.0277">shortages of poll workers</a>. </p>
<p>But COVID-19 makes the staffing challenge greater than ever.</p>
<h2>Who are poll workers</h2>
<p>There isn’t much research on the <a href="https://www.liebertpub.com/doi/full/10.1089/elj.2014.0277">cadre of elderly volunteers</a> that run American elections. </p>
<p>The most <a href="https://electionline.org/wp-content/uploads/2019/02/2019_Elec_LEOSurveyBrief_v02.pdf">comprehensive study of local election administrators</a>, published in 2019 by the Democracy Fund, finds that poll worker recruitment is a constant challenge for election officials. The majority of poll workers are <a href="https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2018/10/22/few-people-want-to-be-poll-workers-and-thats-a-problem">61 or older</a>. Most are retirees, who arguably have more free time on their hands. They also have a strong sense of civic duty and patriotism, according to <a href="https://journals.sagepub.com/doi/full/10.1177/1532673X20920266?casa_token=Jm1Zezq-9RMAAAAA:z8X-hK70JNqrkjc5Ngsxdi3QK2DbtMeYe-cy1ETE2eCakcUEzdgOL0JvjzQQJC82zKDmnBZxdg5v8Q">academic research</a> and <a href="https://www.npr.org/2020/08/05/894331965/wanted-young-people-to-work-the-polls-this-november">media interviews</a> with volunteers.</p>
<p>Once people have worked the polls, they are likely to do it again, usually at the same polling location. This is in part civic duty but also because election officials – who have limited time and resources for recruitment and training – tend to recruit reliable past workers for the job.</p>
<p>The small, largely white and older candidate pool means certain people are less likely to serve as poll workers – namely people of color and young people.</p>
<p>This matters because poll workers, <a href="https://journals.sagepub.com/doi/abs/10.1177/1065912908324870?casa_token=wq7_botRIPUAAAAA:XYWglW4VV2TO22m71F5_9VkGSlAmMLMdNIQy8Qa4016ncqIQdsw_fEPh_kegX_OXxFZ99MXU5eUosg">the human dimension of an election</a>, influence voter experience in various ways. As <a href="https://scholar.google.com/citations?user=9AlVoYcAAAAJ&hl=en">my research has documented</a>, they have significant discretion on issues like verifying eligibility and offering provisional ballots – the ballots used when there are questions about a given voter’s eligibility that must be resolved before the vote can count. </p>
<p>Voters have been wrongly turned away or denied a provisional ballot because of poll worker error, though the <a href="https://www.eac.gov/about_the_eac/help_america_vote_act.aspx">2002 Help America Vote Act</a> requires that provisional ballots be offered to all voters. White poll workers have also shown <a href="https://www.jstor.org/stable/pdf/10.1017/S0022381614000528.pdf?casa_token=C4BZ9reY9FMAAAAA:w7PuLB5toLOCMuDWMw1X4Jz28j5xJtukNjvA2vHjiisQCCb6W0uWl1Y-oIi7whN4gJgc28EVzYLzGNw0fRgd5GVXhIeYR6bGElTGIt8X5GwBtz_K6RNH">biases against nonwhite voters</a>, questioning them more intensely. </p>
<p>Poll workers can even <a href="https://www.washingtonpost.com/politics/2020/05/21/heres-problem-with-mail-in-ballots-they-might-not-be-counted/">invalidate a person’s vote</a> if they determine that the signature on their mail-in or absentee ballot does not match the one on their voter registration record. </p>
<p>Compared to <a href="https://www.pewresearch.org/fact-tank/2020/04/06/older-people-account-for-large-shares-of-poll-workers-and-voters-in-u-s-general-elections/">older voters</a>, young people often give <a href="https://journals.sagepub.com/doi/abs/10.1177/1065912908324870?casa_token=SL28Wu_643MAAAAA:kkYhRroTh-DcQIdsUXZ5-NY7kqn-WF1jZZ00grdWjg_ZBtIH7LZPoQbvQZursWYxf1Z4BJsSMQd1tw">their poll workers poorer evaluations</a>, especially when they <a href="https://dspace.mit.edu/bitstream/handle/1721.1/97651/WP_77.pdf?sequence=1&isAllowed=y">vote for the first time</a>. And minority voters report more positive experiences when they interact with poll workers who <a href="https://www.liebertpub.com/doi/abs/10.1089/elj.2018.0485">look like them</a>. Both are groups that are already more likely to <a href="https://theconversation.com/closing-polling-places-is-the-21st-centurys-version-of-a-poll-tax-133301">feel or be politically excluded</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A Black woman and her small son receive instructions from a Black poll worker in a gym set up for voting" src="https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358169/original/file-20200915-20-e6b7g7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Voters of color may have a better voting experience if their poll worker looks like them.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/woman-and-her-son-take-direction-from-a-poll-worker-during-news-photo/1228299406?adppopup=true">Craig F. Walker/The Boston Globe via Getty Images</a></span>
</figcaption>
</figure>
<p>Meanwhile, older voters may view young poll workers with skepticism. In Mississippi’s 2018 midterm election, many of my students signed up to be first-time poll workers. Some older voters, expecting a more senior poll worker, asked to deal with the “poll manager.”</p>
<h2>Young people save the day?</h2>
<p>With so many veteran poll workers refusing to work during the pandemic due to health concerns, some polling sites may not open on Nov. 3 and many others will have long lines. In <a href="https://theconversation.com/georgias-election-disaster-shows-how-bad-voting-in-2020-can-be-141678">Georgia’s disastrous June 9 primary</a>, many people waited for hours to vote; some were sent home without voting when polling sites closed.</p>
<p>Across the country, poll workers who reported for primary duty said it was “<a href="https://www.pbs.org/newshour/politics/georgia-poll-worker-describes-overwhelming-voting-chaos">overwhelming</a>” to maintain COVID-19 safety protocols and still service voters who were anxious to cast their vote and leave. </p>
<p>To help remedy the situation in November, the federal Election Assistance Commission declared Sept. 1, 2020 to be “<a href="https://www.eac.gov/help-america-vote">National Poll Worker Recruitment Day</a>.” Organizations like <a href="https://www.powerthepolls.org/">Power the Polls</a> pushed this initiative hard with younger Americans. News outlets reported that <a href="https://www.wsj.com/articles/companies-recruit-350-000-poll-workers-for-u-s-election-11599384600">350,000 new poll workers signed up</a>. </p>
<p>For perspective, <a href="https://www.eac.gov/documents/2017/11/15/eavs-deep-dive-poll-workers-and-polling-places">917,694</a> poll workers worked the 2016 presidential election.</p>
<p>More volunteers are a good sign for November’s election, and it may improve the voting experience in certain ways. Young people are generally more tech savvy. And if this crowd is more diverse than the veteran poll workers, they could boost the generally low election confidence of first-time voters and voters of color.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Dozens of people in masks standing outside in a long line" src="https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358201/original/file-20200915-14-13vfwfi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A sort of socially distanced line to vote in Atlanta, June 9, 2020.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/people-wait-in-line-to-vote-in-georgias-primary-election-on-news-photo/1218845591?adppopup=true">Elijah Nouvelage/Getty Images</a></span>
</figcaption>
</figure>
<h2>Experience matters</h2>
<p>The inexperience of the new poll workers, however, will present challenges. Long-time poll workers develop a familiarity with the election process and with regular voters. This can make elections run more smoothly. </p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>Take the contentious issue of <a href="https://www.cnn.com/2020/09/14/politics/election-2020-ballot-signature-mismatches/index.html">signature validation</a>, for example. Individual poll workers may interpret state election laws differently and receive different levels of training on this topic. </p>
<p>In Mississippi’s 2018 midterm election, many of my student first-time poll workers reported that absentee ballots coming from retirement communities had signatures that did not match the ones on the record and should therefore be rejected. Older poll workers, on the other hand, argued that they’d known these voters for decades and that the votes should count. Research shows one’s signature is <a href="https://www.nytimes.com/2018/11/14/us/voting-signatures-matching-elections.html">very likely to change over time</a>. </p>
<p>Election officials provide training to new recruits, either in person or online, but it’s no match for years on the job. Regardless, the country needs more poll workers, veteran or otherwise. </p>
<p><a href="https://www.eac.gov/help-america-vote">Positions are still wide open, nationwide</a>.</p><img src="https://counter.theconversation.com/content/145991/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thessalia Merivaki's research on election administration has received funding from the MIT Elections Lab.</span></em></p>An army of mostly older, white volunteers run America’s voting sites. They’re reluctant to work during a pandemic. So new recruits are signing up to run the polls, for better and for worse.Thessalia Merivaki, Assistant Professor of American Politics, Mississippi State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1348342020-04-06T12:06:13Z2020-04-06T12:06:13ZStuck at home with your partner? Look to retirees for how to make it work<figure><img src="https://images.theconversation.com/files/325344/original/file-20200403-74279-zobcwa.jpg?ixlib=rb-1.1.0&rect=1439%2C1088%2C6806%2C4667&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Take a note from older couples who know how to do it right.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/senior-couple-breakfast-royalty-free-image/1095804716">Geber86/E+ via Getty Images</a></span></figcaption></figure><p>Across the country an unprecedented number of couples are suddenly spending every waking and sleeping hour of the day with one another. </p>
<p>That’s what <a href="https://doi.org/10.1037/a0019087">many older retired couples do too</a>, even when there isn’t a pandemic. Their experiences are worth listening to, because many psychology studies find that marriages among the Medicare-eligible set <a href="https://doi.org/10.1037/0022-3514.79.4.644">are the happiest</a> of any <a href="https://doi.org/10.1177/000312240807300202">cohort across the life span</a>.</p>
<p>A review of the research reveals a <a href="https://doi.org/10.1037/0022-3514.88.1.189">U-shaped pattern of marital happiness</a> over the life cycle. Early marriage features many positive aspects interlaced with a lot of conflict, while older couples enjoy the highest levels of companionship with low levels of conflict. Midlife couples who are raising children are at the bottom of the U. They tend to see a plunge in their enjoyment of one another, along with an uptick in fighting.</p>
<p>Of course, you might wish you could be securely retired with a partner right now, especially if you’re currently on your own. Working remotely or facing unemployment while running a one-room schoolhouse, planning three meals a day without running out of food and worrying about your family’s health makes retirement look like a dreamy vacation.</p>
<p>But there are some important similarities between retirement and the isolation required by social distancing. Your social networks have shrunk. Without work connections and friends to meet for lunch or at the gym, a partner becomes more essential than ever. <a href="https://scholar.google.com/citations?user=sh-v7eQAAAAJ&hl=en&oi=ao">As a therapist who has been treating couples</a> <a href="http://www.momentumpress.net/books/life-cycle-approach-treating-couples-dating-death">at all stages of life</a> for almost three decades, I’m currently witnessing the relational challenges of this pandemic, a big magnifier that can bring out the very best and sometimes the worst in relationships.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/325345/original/file-20200403-74255-12eb4un.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Older couples rely on one another to help weather the storms.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/senior-couple-looking-out-the-window-leaning-on-royalty-free-image/1141290546">Adolescent Content/Niyani Lingham Green/DigitalVision via Getty Images</a></span>
</figcaption>
</figure>
<h2>Lean on me</h2>
<p><a href="https://doi.org/10.1093/geronb/56.6.p321">Older, retired couples</a> primarily focus on supporting one another: Can I depend on you when I need help, feel scared, worry about dying or don’t feel well? And am I willing to be that source of comfort and stability when you need me?</p>
<p>No matter the age or stage of the couple, the current pandemic has revealed the need for much more mutual dependency. Can I count on you to protect yourself and us when you go to the grocery store? If I’m feeling scared about my parents’ health or mine, can I tell you? If teaching algebra (a subject I struggled with the first time around) to our children has pushed me to the breaking point, can I ask you to take over, kindly and with no eye-rolling?</p>
<p>Now is an ideal time to develop your help-asking muscle and, in turn, to welcome your partner’s vulnerability. You can practice now for the years ahead when you’ll need to be comfortable with more mutual dependency – being able to count on and be counted on in moments of need and frailty.</p>
<h2>Have fewer, kinder fights</h2>
<p>My colleague, psychiatrist Bob Waldinger, <a href="https://doi.org/10.1037/a0019087">brings octogenarian couples</a> into his laboratory to study their conflicts. He told me that he often has trouble getting them to reenact a fight. Having had the same fights for decades, these older couples are quite bored at the prospect of another round. They already know the other one’s lines. Do we have to do this again?</p>
<p><a href="https://doi.org/10.1037//0003-066x.54.3.165">When older couples do fight</a>, they tend to <a href="https://doi.org/10.1037/0882-7974.10.1.140">handle conflict better</a> than younger ones: They are more likely to interject expressions of affection and are less prone to voicing disgust, belligerence and whining. Because the relationship is so central, they may be more likely to forgive their partners or let a grievance slide.</p>
<p>So, try to catch a fight as it starts and consider saying to your partner, “Can we talk about something more interesting? We probably already know how this is going to unfold.”</p>
<p>Or, if the conflict is important to air, try to remember that you can say something kind without surrendering, or give a warm nonverbal smile or touch. </p>
<p>It’s also a good idea to refrain from making any contemptuous or nasty comments. Couples researchers recommend following the <a href="https://www.gottman.com/blog/the-magic-relationship-ratio-according-science/">“magic ratio” of 5 to 1</a> during a fight to secure a stable relationship: Try to say five positive things to every one zinger or negative comment. This ratio, which may seem outlandish, is based on the fact that <a href="https://doi.org/10.1111/j.1545-5300.2002.40102000083.x">negative interactions carry more weight</a> than positive ones.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/325348/original/file-20200403-74206-1luvyl5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">When ‘for better or worse’ includes every waking moment.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/senior-married-couple-eating-healthy-food-for-royalty-free-image/1207315875">Drazen_/E+ via Getty Images</a></span>
</figcaption>
</figure>
<h2>Focus on the present reality</h2>
<p>Studies suggest that older couples <a href="https://doi.org/10.1093/geronb/56.6.p321">focus on the present</a> and are better able to accept the relationship as it is, rather than looking ahead to a time when it is going to be transformed. </p>
<p>While they may not discuss their own mortality, <a href="https://doi.org/10.1023/A:1024569803230">older couples’ perspectives are shaped</a> by a shorter time horizon. They typically pay more attention to positive experiences, want to understand their emotions better and focus on a smaller group of close friends and family.</p>
<p>Try focusing on what is good about your relationship. What do you admire and feel grateful for? If you focus on the ways your partner is supportive, research shows that both you and your spouse will <a href="https://doi.org/10.1024/1662-9647/a000077">feel better about the relationship</a>. Focusing on emotion will not be hard during a pandemic that elicits powerful feelings of anger, fear, worry, grief, love and gratitude. What can you learn about your partner that you didn’t know before about his or her strengths, ways of coping and cracks in that coping?</p>
<p>Being stuck with your partner 24/7 may leave you pondering the expression “for better or worse, but not for breakfast, lunch and dinner.” But you may come out the other side with some new skills. You don’t have to wait for retirement to have a stronger relationship.</p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/134834/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anne Fishel does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cooped up with a partner and nowhere to go to break it up? Coronavirus social distancing… or another day in retirement? Research on older couples holds tips for everyone else on how to deal.Anne Fishel, Associate Clinical Professor of Psychology, Harvard UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1311512020-02-25T18:57:51Z2020-02-25T18:57:51ZOlder and poorer: Retirement Income Review can’t ignore the changing role of home<figure><img src="https://images.theconversation.com/files/316795/original/file-20200224-24651-e7femb.jpg?ixlib=rb-1.1.0&rect=353%2C344%2C5254%2C3388&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-senior-old-couple-discuss-about-1338826637">natasaelena/Shutterstock</a></span></figcaption></figure><p>The assumption that retired people have minimal housing costs underpins the settings of our retirement incomes system. But the real state of housing for older Australians today makes it critical for the <a href="https://treasury.gov.au/review/retirement-income-review">Retirement Incomes Review</a> to look at the evidence that now challenges this assumption. </p>
<p>When announcing the <a href="https://treasury.gov.au/review/retirement-income-review/TOR">terms of reference</a>, federal government ministers <a href="http://ministers.treasury.gov.au/ministers/jane-hume-2019/media-releases/review-retirement-income-system">acknowledged</a> the critical role of the home in a good retirement by including it in the third pillar of the system, voluntary saving.</p>
<p>The fact is the soaring costs of land and housing in Australia over the past three decades have effectively destroyed the asset base on which our retirement income system relies.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=502&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=502&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=502&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=631&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=631&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316765/original/file-20200224-116128-p7ocmn.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=631&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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Read more:
<a href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">Fall in ageing Australians' home-ownership rates looms as seismic shock for housing policy</a>
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<p>The <a href="https://www.ahuri.edu.au/research/final-reports/319">proportion</a> of home owners aged 55 to 64 years who owe money on a mortgage has more than tripled from 14% in 1990 to 47% in 2015. The rate has doubled among those aged 45 to 54, as has the ratio of mortgage debt to income (from 82% to 169%). This ratio has blown out from 72% to 132% for those in their last decade before the retirement age.</p>
<p>These debts will greatly reduce retirement incomes. The impact will only grow as successive generations take much <a href="https://theconversation.com/were-delaying-major-life-events-and-our-retirement-income-system-hasnt-caught-up-127231">longer to enter the property market</a> and live with higher housing debt much later in life than previous generations.</p>
<p>The numbers of older Australians who have never owned a home, or have <a href="https://theconversation.com/were-delaying-major-life-events-and-our-retirement-income-system-hasnt-caught-up-127231">fallen out of home ownership</a> before retirement, have also exploded. In particular, older women (55-plus) in private rental housing grew in number by an extraordinary 39% between 2006 and 2011. </p>
<p>This trend is directly linked to a 28% rise in homelessness among older Australians over the same period. Women over 55 are the <a href="https://www.agedcareguide.com.au/talking-aged-care/more-older-australians-without-a-a-place-to-call-home">fastest-growing cohort at risk of homelessness</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=202&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=202&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=202&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=254&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=254&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316770/original/file-20200224-116109-1ee72t0.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=254&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Projected changes in housing tenures of older Australians between 2016 and 2031.</span>
<span class="attribution"><a class="source" href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">Source: Rachel Ong ViforJ et al, calculations from HILDA Survey and ABS population projections</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Failing to meet retirees’ needs</h2>
<p>The housing market is clearly failing older people. Any consideration of retirement incomes must grapple urgently with the implications this will have for retirees.</p>
<p>Australian policymakers currently take a segmented approach to housing for older people. </p>
<p>The retirement village model is expensive to enter and to <a href="https://percapita.org.au/wp-content/uploads/2017/08/Retirement-housing-in-Victoria-2502017.pdf">exit</a>. It’s the preferred housing model for <a href="https://www.agedcare101.com.au/retirement-living/types-retirement-living/retirement-villages">just 8%</a> of retirees. </p>
<p>“Down-sized” units often provide unsuitable multi-level accommodation and lack the amenities <a href="https://theconversation.com/eight-simple-changes-to-our-neighbourhoods-can-help-us-age-well-83962">older people need to thrive</a>. As a result, these units often <a href="https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931">fail to attract older buyers</a>. </p>
<p>Stamp duties are another barrier.</p>
<p>As a result, many older people stay in large homes they find increasingly difficult to manage and which would better suit young families.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/half-of-over-55s-are-open-to-downsizing-if-only-they-could-find-homes-that-suit-them-130531">Half of over-55s are open to downsizing – if only they could find homes that suit them</a>
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</em>
</p>
<hr>
<h2>Home’s greatest value is social</h2>
<p>To fully understand the role of home in providing a comfortable and dignified retirement, the review panel has to go beyond traditional concepts of housing as a financial asset. It must consider the full emotional and social role of home in the lives of older people. Per Capita’s Centre for Applied Policy in Positive Ageing in collaboration with The Australian Centre for Social Innovation is launching the <a href="https://percapita.org.au/our_work/home-for-good/">Home for Good</a> project today.</p>
<p>The real value of the home for older people isn’t financial, <a href="https://www.tacsi.org.au/future-of-home/importance-of-home-as-we-age/">research</a> by <a href="https://www.tacsi.org.au/">The Australian Centre for Social Innovation</a> shows. Its greatest value is as a safe and private space from which to connect with the outside world, express identity and build social relationships.</p>
<p>Recent <a href="https://percapita.org.au/wp-content/uploads/2019/09/Mutual-Appreciation_formFINAL.pdf">research</a> by the <a href="https://percapita.org.au/our_work/centre-for-applied-policy-in-positive-ageing/">Centre for Applied Policy in Positive Ageing</a> at <a href="https://percapita.org.au/about/">Per Capita</a> confirmed older people experience home as a social as well as financial asset. Exploring models of co-housing with older women, we found even women in secure housing, such as home owners or public housing tenants, would move to other housing that offered a sense of belonging within a connected community.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316794/original/file-20200224-24690-1hck2hj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Housing that offers a sense of community belonging is highly valued.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/i-really-have-thought-this-cant-go-on-loneliness-looms-for-rising-numbers-of-older-private-renters-118046">'I really have thought this can’t go on': loneliness looms for rising numbers of older private renters</a>
</strong>
</em>
</p>
<hr>
<p>In the economic narrative that drives policy thinking about housing in Australia, we lose sight of this intrinsic link between home and community. Policymakers are confusing an attachment to the bricks and mortar of the family home with the desire for a socially located space that suits the occupants’ age and abilities and is connected to community.</p>
<p>That older people are not emotionally wedded to the family home, but rather seeking communities of belonging, challenges traditional assumptions about ageing in place.</p>
<h2>Suitable housing choices in short supply</h2>
<p>Australian Housing and Urban Research Institute (<a href="https://www.ahuri.edu.au/about-us/who-we-are-and-what-we-do">AHURI</a>) research has confirmed older Australians are willing to move from the family home to ideal housing. The research found a “<a href="https://www.ahuri.edu.au/research/final-reports/317">housing aspiration gap</a>” between the desires of older Australians for homes in small, regional towns and policy settings that prioritise the family home.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-sort-of-housing-do-older-australians-want-and-where-do-they-want-to-live-120987">What sort of housing do older Australians want and where do they want to live?</a>
</strong>
</em>
</p>
<hr>
<p>The research doesn’t explore why traditional neighbourhoods are no longer meeting the demands of older people. However, we do know gentrification and increasing density have remodelled many suburbs. Many older people are vulnerable to isolation as families and neighbours move away and the pace and character of community life change.</p>
<p>Well-travelled and consumer-savvy baby boomers might also be more open to seeking alternatives to staying put. </p>
<p>Whatever the motives, older Australians have a clear need for more diverse housing options.</p>
<p>We need to develop a bolder vision for housing in retirement, to move beyond an economic framing of housing wealth to one that enables us to build connected and vibrant communities that support people to age well.</p>
<p>This demands we rethink models of home ownership, developing financial and legal products that support shared equity and co-ownership, and diversify development models, encouraging the housing choices for which older people are crying out.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/co-housing-works-well-for-older-people-once-they-get-past-the-image-problem-79907">Co-housing works well for older people, once they get past the image problem</a>
</strong>
</em>
</p>
<hr>
<p>As many more retirees remain in rental properties into old age, we must also find ways to increase tenant control and provide secure tenure. We need uniform tenancy laws covering private rental housing across the nation. </p>
<p>And we must actively design neighbourhoods that encourage neighbourliness, combining privacy with informal networks of social and practical support, companionship and care.</p>
<p>Achieving these changes begins with accepting that every Australian has a right to secure housing. Like health care, a secure and stable home is fundamental to quality of life. It should be delivered as a universal basic service.</p>
<p>It will take significant reform before we have a housing system in which Australians of all ages and abilities live in thriving, connected and safe neighbourhoods. </p>
<p>This shift from housing as a commodity to home as a community will take time, investment and, most importantly, imagination, but the potential for Australia to build a world-standard housing system for retirees is there for the taking.</p>
<hr>
<p><em>Per Capita’s Centre for Applied Policy in Positive Ageing is launching its Home for Good project in collaboration with The Australian Centre for Social Innovation today. Read more about the project <a href="http://bit.ly/home-for-good">here</a>.</em></p>
<p><em>This article was co-authored by Kerry Jones, Director: Systems Initiatives, at <a href="https://www.tacsi.org.au/about/">The Australian Centre for Social Innovation</a>. The centre is generously supported by the Wicking Trust.</em></p><img src="https://counter.theconversation.com/content/131151/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emma Dawson is the Executive Director of Per Capita. Per Capita’s Centre for Applied Policy in Positive Ageing receives funding from the Wicking Trust. </span></em></p><p class="fine-print"><em><span>Myfan Jordan is the Director of Social Innovation at Per Capita’s Centre for Applied Policy in Positive Ageing (CAPPA). The centre receives funding from the Wicking Trust.</span></em></p>More older Australians are carrying housing debt later in life, or not owning homes at all, but lack suitable alternatives to the family home. The result is lower incomes in retirement.Emma Dawson, Honorary Fellow, School of Social and Political Sciences, The University of MelbourneMyfan Jordan, Associate, Health Ageing Research Group (HARG), La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1301932020-01-30T19:03:45Z2020-01-30T19:03:45ZThe uncomfortable truth about super: there’s no ‘one-size-fits-all’ contribution<figure><img src="https://images.theconversation.com/files/312749/original/file-20200130-41485-s0n1hj.jpg?ixlib=rb-1.1.0&rect=29%2C53%2C3964%2C2604&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People come in different shapes and sizes, which can make a one-size-fits-all retirement scheme uncomfortable.
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Among the topics being investigated by the government’s <a href="https://treasury.gov.au/review/retirement-income-review">retirement incomes review</a> is whether compulsory super contributions should be lifted from 9.5% to 12%.</p>
<p>Our research has identified two uncomfortable truths. One is that there is no “one-size fits all” correct contribution. The other is that 9.5% will be enough for most people, unless the aim is to replace the age pension.</p>
<p>It queries the need to lift the contribution rate to 12%, and also the idea of having uniform compulsory contributions.</p>
<h2>What our study did</h2>
<p>We used what is known as a <a href="https://www.dictionary.com/browse/stochastic">stochastic life-cycle model</a> to calculate the optimal level of super contributions for Australians at nine different income levels (ranging from A$30,000 to $150,000), applying existing tax, super and pension rules. </p>
<p>While necessarily limited, it is an advance on previous modelling that does not balance the loss of pre-retirement spending power against the income subsequently gained post-retirement. Household status, gender, assets outside of super and home ownership status also matter a lot, but are not directly modelled.</p>
<p>For each income group, we considered different income objectives for retirement including the Australian Association of Superannuation Funds of Australia’s “<a href="https://www.superannuation.asn.au/resources/retirement-standard">comfortable</a>” and “<a href="https://www.superannuation.asn.au/resources/retirement-standard">modest</a>” standards. We examined different retirement ages, life expectancies, super returns and effective employer contributions.</p>
<h2>How much you need</h2>
<p>The model produced a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3517590">wide range of estimates</a>. </p>
<p>Depending on income and other assumptions, the right amount of super contributions can be anywhere between about 3% up to 20%, although the higher levels typically assume away the age pension. </p>
<p>This table presents selected findings.</p>
<hr>
<p><strong>Some optimal super contributions by income level and objectives</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=364&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=364&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=364&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=458&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=458&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312781/original/file-20200130-41481-iho6v3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=458&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3517590">Source: The 'Right’ Level for the Superannuation Guarantee: A Straightforward Issue by No Means, Khemka and Warren, 2020</a></span>
</figcaption>
</figure>
<hr>
<h2>Two conditions could justify a higher contribution for all</h2>
<p>One condition that would justify a higher superannuation contribution would be a policy objective of replacing the age pension as far as possible. Our modelling reveals that even compulsory contributions of 12% might not even be enough to achieve this objective. </p>
<p>The second is where super is used as a sort-of self-insurance mechanism in case things don’t go as planned. This could be because someone retires earlier than expected, lives longer than expected or gets lower than expected returns.</p>
<p>Early retirement poses the biggest threat because it stops income before the pension becomes available, forcing retirees to use savings. The career breaks common among women have similar effects, although they have the chance to catch up on contributions later and may receive some income support during the break.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/productivity-commission-finds-super-a-bad-deal-and-yes-it-comes-out-of-wages-109638">Productivity Commission finds super a bad deal. And yes, it comes out of wages</a>
</strong>
</em>
</p>
<hr>
<p>The problem with saving more “just in case” is that it can result in over-saving if the feared risks don’t eventuate, unnecessarily forcing down pre-retirement living standards.</p>
<p>There are other ways to addressing these risks, including through social security and various forms of insurance. The pension is one such mechanism, annuities are another. We would prefer to see policy makers explore insurance against risk rather than forcing everyone to save more.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=962&fit=crop&dpr=1 600w, https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=962&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=962&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1210&fit=crop&dpr=1 754w, https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1210&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/265468/original/file-20190324-36267-olwp2z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1210&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?anchor=Superguaranteepercentage">Source: Australian Tax Office</a></span>
</figcaption>
</figure>
<p>The key point is that a “one-size-fits-all” contribution is a very blunt instrument, and an asymmetrical one. </p>
<p>Employees can currently do nothing about an compulsory contribution rate that is set too high for them, but can add more if it is set too low. </p>
<p>A higher compulsory contribution could help some if it was genuinely additional to wage increases and was paid for by employers (as is legally the case) rather than coming out of take-home pay via lower wage rises (as is often practically the case). </p>
<p>We have no strong opinion on where the extra contributions would come from, but we note that the evidence is far from straightforward that employers will necessarily bear the cost. </p>
<p>The retirement income review might try to find out. It might also like to consider our work, which calls into question the whole idea of a single contribution rate. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/5-questions-about-superannuation-the-governments-new-inquiry-will-need-to-ask-124400">5 questions about superannuation the government's new inquiry will need to ask</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/130193/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>No single super contribution rate suits everyone, and there’s only a clear case for an increase if there’s no age pension.Gaurav Khemka, Senior Lecturer in Actuarial Studies, Australian National UniversityGeoff Warren, Associate Professor, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1206512019-08-26T19:59:26Z2019-08-26T19:59:26ZFall in ageing Australians’ home-ownership rates looms as seismic shock for housing policy<figure><img src="https://images.theconversation.com/files/289355/original/file-20190826-170922-16hpfo2.jpg?ixlib=rb-1.1.0&rect=46%2C0%2C5184%2C3422&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Increasing numbers of older Australians face a harder time paying the bills when they retire because they'll still be paying off a mortgage or renting a home.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/senior-couple-reading-documents-calculating-bills-1321860905?src=L888Uc72jzoK79JpT5xT7A-1-9">Art_Photo/Shutterstock</a></span></figcaption></figure><p>Outright home ownership has long been regarded as a supporting pillar of Australian retirement incomes policies. A <a href="https://www.ahuri.edu.au/research/final-reports/319">report</a> released today by the Australian Housing and Urban Research Institute (<a href="https://www.ahuri.edu.au/about-us/who-we-are-and-what-we-do">AHURI</a>) raises concerns that rising mortgage debt and falling home ownership rates in later life are undermining the role of home ownership in supporting retirees’ financial wellbeing.</p>
<p>Achieving outright home ownership is similar to the accumulation of pension income entitlements that come on stream in later life. This is because the outright owner does not have to meet rents. That reduces the need for a large income stream to pay for shelter as well as the <a href="https://link.springer.com/article/10.1007/s10901-010-9187-4">chances of low-income older Australians falling into poverty</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-secure-and-affordable-housing-is-an-increasing-worry-for-age-pensioners-69350">Why secure and affordable housing is an increasing worry for age pensioners</a>
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</p>
<hr>
<h2>Numbers of mortgagors and private renters soar</h2>
<p>According to data from the Australian Bureau of Statistics (ABS) <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/6540.0">Survey of Income and Housing</a>, home-ownership rates among Australians aged 55-64 years dropped from 86% to 81% between 2001 and 2016. We are also seeing a major shift in older Australians’ readiness to shoulder mortgage debt in later life.</p>
<p>Mortgage burdens have spiked in the 55-64 age group. In 2001 roughly 80% were mortgage-free. Fifteen years later this had plummeted to only 56%. </p>
<p>Indebtedness is even growing among owners aged 65 and over. In 2001 nearly 96% were mortgage-free. By 2016 this proportion had fallen below 90%.</p>
<p>These trends are expected to continue. That means, as the population ages, a growing number of older Australians will still be paying off mortgages, or trying to meet rents from fixed incomes. </p>
<p>The table below shows how the housing tenures of older Australians are projected to change between 2016 and 2031 based on ABS population forecasts and modelling estimates. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=207&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=207&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=207&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=260&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=260&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289341/original/file-20190826-170951-1r3k0le.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=260&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Projected changes in housing tenures of older Australians between 2016 and 2031.</span>
<span class="attribution"><span class="source">Authors’ calculations from HILDA Survey and ABS population projections</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>We expect the number of outright owners aged 55-64 to plunge by 42%, from more than 1.2 million to 708,000. The number of 65-plus outright owners is predicted to rise by 41%, but this lags behind the 52% population growth in this age group. </p>
<p>On the other hand, the numbers of older mortgagors and private renters are projected to soar. Among 55-to-64-year-olds, mortgagor numbers jump from under 1 million to over 1.6 million, a 71% increase. The number of private renters rises by 54% from 369,000 to 567,000. </p>
<p>Beyond what was the age pension threshold of 65 years, mortgagors and private renters are expected to roughly double in number.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/more-of-us-are-retiring-with-mortgage-debts-the-implications-are-huge-115134">More of us are retiring with mortgage debts. The implications are huge</a>
</strong>
</em>
</p>
<hr>
<h2>What are the budget impacts?</h2>
<p>The combined impact of these changes in tenure and demographics is expected to increase Commonwealth Rent Assistance (CRA) eligibility among seniors. </p>
<p>On its own, demographic change is forecast to lift the number of CRA recipients, and the real cost of providing CRA, by around 35%. </p>
<p>Add the projected increases in the private rental share of the housing stock and the number of CRA recipients is estimated to rise by 60%, from 414,000 to 664,000, between 2016 and 2031. </p>
<p>The real cost to the federal budget of rent assistance payments to older Australians is forecast to blow out from $972 million to $1.55 billion a year.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=105&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=105&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=105&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=132&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=132&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289342/original/file-20190826-170918-10qw0cc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=132&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Actual 2016 and projected 2031 tenure shares and population counts among Australians aged 55+ years.</span>
<span class="attribution"><span class="source">Authors’ calculations from HILDA Survey and ABS population projections</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>We can also expect to see public housing waiting lists grow if these tenure changes and demographics eventuate. Their combined impact through to 2031 is expected to swell the number of older persons eligible for public housing from 247,000 to 441,000 – a 79% increase.</p>
<h2>What are the impacts on poverty?</h2>
<p>On an income-only basis we estimate 1.25 million seniors were in poverty in 2016. On taking their housing costs into account, that number falls to 802,000. </p>
<p>But the role of home ownership in preventing poverty is challenged if our projected declines in home ownership rates and increases in debt eventuate. The table below shows the projected increase in the after-housing-cost poverty count from 802,000 in 2016 to 1.15 million in 2031. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=114&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=114&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=114&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=143&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=143&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289347/original/file-20190826-170927-xyszg6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=143&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Actual 2016 and projected 2031 poverty counts on a before- and after-housing-cost basis among Australians aged 55+ years.</span>
<span class="attribution"><span class="source">Authors’ calculations from HILDA Survey and ABS population projections</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Policy challenges on multiple fronts</h2>
<p>The demand for public housing will grow. If all else remains unchanged in the housing system and economy, seniors on public housing wait lists will increase by over 75%. That’s more than twice the 35% increase in the population of seniors between 2016 and 2031. </p>
<p>Community housing organisations would also come under increasing pressure.</p>
<p>As the number of senior private rental tenants grows, governments will need to reform tenancy regulations in ways that enable housing retrofits to meet mobility needs and allow for ageing in place. Tenure insecurity in the rental sector could hinder planning for aged support services. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/life-as-an-older-renter-and-what-it-tells-us-about-the-urgent-need-for-tenancy-reform-103842">Life as an older renter, and what it tells us about the urgent need for tenancy reform</a>
</strong>
</em>
</p>
<hr>
<p>We may also see a more fundamental transformation of Australia’s housing system and lifestyles in old age. High real house price growth relative to incomes remains a <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/HousingAffordability">barrier to first home ownership</a> despite low interest rates. Furthermore, the mandatory <a href="https://www.superguide.com.au/superannuation-topics/superannuation-guarantee-sg">superannuation guarantee</a> likely displaces some saving in other assets, including housing. </p>
<p>There is therefore a growing prospect of delayed entry into home ownership and of people carrying more debt in later life. Longer working lives and the use of superannuation benefits to pay down mortgages both look increasingly likely.</p><img src="https://counter.theconversation.com/content/120651/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research report in this article is funded by the Australian Housing and Urban Research Institute under grant number 81189.
Rachel Ong ViforJ receives funding from AHURI and the ARC.</span></em></p><p class="fine-print"><em><span>Gavin Wood receives funding from the Australian Research Council and the Australian Housing and Urban Research Institute. </span></em></p><p class="fine-print"><em><span>Melek Cigdem-Bayram receives funding from the Australian Housing and Urban Research Institute. </span></em></p><p class="fine-print"><em><span>Silvia Salazar receives funding from AHURI. </span></em></p>People over 65 who still have a mortgage or are renting are projected to double in number by 2031. The trend is likely to hit government budgets and leave more retirees in poverty.Rachel Ong ViforJ, Professor of Economics, School of Economics, Finance and Property, Curtin UniversityGavin Wood, Emeritus Professor of Housing and Housing Studies, RMIT UniversityMelek Cigdem-Bayram, Research Fellow, RMIT UniversitySilvia Salazar, Research fellow, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1062372018-11-06T19:14:23Z2018-11-06T19:14:23ZWhy we should worry less about retirement - and leave super at 9.5%<figure><img src="https://images.theconversation.com/files/244054/original/file-20181106-74754-18c9lhn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Most retirees are financially secure. Many earn more than they did while working, the Grattan Institute finds.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>It’s conventional wisdom that Australians don’t save enough for retirement. Most workers themselves <a href="http://csrm.cass.anu.edu.au/sites/default/files/docs/ANUPoll-ageing-money-feb-2016%257B%255C_%257D0.pdf">think</a> they won’t have enough to retire on, and their concerns are <a href="http://nabnews.efront-flare.com.au/wp-content/uploads/2017/08/MLCWealth-%2520Sentiment-Survey-Q1-2017.pdf">rising</a>. </p>
<p>But the conventional wisdom is wrong.</p>
<p>Our new report, <a href="https://grattan.edu.au/report/money-in-retirement/">Money In Retirement: More Than Enough</a> shows that most people who are actually retired <a href="https://www.mebank.com.au/getmedia/2046702b-39c0-457b-8950-80d75e716bcd/ME-s-14th-Household-Financial-Comfort-Report_August-2018.pdf">feel more comfortable financially</a> than the Australians younger than them who are still working. </p>
<p>Retirees of today tend to slow their spending as they age, tend to keep saving in retirement, and often leave an legacy almost as big as the nest egg they had on the day they retired.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-myth-of-the-ageing-crisis-168">The myth of the ageing 'crisis'</a>
</strong>
</em>
</p>
<hr>
<p>When surveyed today the retirees of the future might be worried about their retirement, but economic growth means they will almost certainly be on even higher incomes than retirees today.</p>
<p>These findings might seem surprising: they contradict the repeated messaging from the financial services industry that Australians won’t have enough for retirement. </p>
<p>But that industry’s claims are based on research that overlooks two important points.</p>
<h2>Retirees spend less over time</h2>
<p>Much of the research assumes that retirees need to save enough to enable their incomes to <a href="https://melbourneinstitute.unimelb.edu.au/downloads/working-paper-series/wp2014n05.pdf">keep</a> <a href="https://www.actuaries.asn.au/Library/Opinion/2015/ForRicherForPoorerRetirementIncomes2WEB.pdf">climbing</a> throughout their retirement in line with general wage growth. </p>
<p>Implicitly, it assumes that a retiree needs to spend 25% more at age 90 than at age 70, after accounting for inflation. </p>
<p>But our analysis shows that retired Australians tend to spend less over time, even those who have money to spare. </p>
<hr>
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<a href="https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/244006/original/file-20181105-74754-1c9ftyn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>Young retirees might chalk up frequent flyer points, but they do it less as they get older. </p>
<p>Spending tends to slow at around the age of 70, and falls rapidly after age 80, to just 84% of what was spent at retirement age.</p>
<p>Even the wealthiest retirees spend less as they age. At the other end of the scale, pensioners receive discounts on everything from car registration to rates.</p>
<p>Our research finds that retirees spend less over time on food, alcohol, tobacco, clothes, furnishings, transport and recreation.</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/244008/original/file-20181105-74775-1cthlie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>They spend more on health care as they age, but Medicare <a href="https://theconversation.com/young-australians-set-to-pay-for-government-policy-mistakes-35250">largely shields them</a> from the full costs. The modestly higher out-of-pocket costs they do pay are mainly due to <a href="https://theconversation.com/private-health-insurance-premium-increases-explained-in-14-charts-92825">rising premiums</a> for private health insurance.</p>
<p>Not only do most retirees not draw down their savings throughout retirement, many add to them. </p>
<p>Even among pensioners, one recent study found that the median (typical) pensioner <a href="http://journals.sagepub.com/doi/abs/10.1177/0312896216682577">still had 90%</a> of what he or she retired on after eight years.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/poor-and-rich-retirees-spend-about-the-same-64297">Poor and rich retirees spend about the same</a>
</strong>
</em>
</p>
<hr>
<p>This means that calculations about the adequacy of retirement savings ought to be based on whether they are enough to maintain buying power (at best) rather increase it in line with wage growth.</p>
<p>Many <a href="http://www.industrysuperaustralia.com/publications/reports/nearly-half-of-australians-will-not-have-a-comfortable-retirement/">prominent studies</a> also ignore non-super savings, which are <a href="https://theconversation.com/the-superannuation-myth-why-its-a-mistake-to-increase-contributions-to-12-of-earnings-66209">material</a>, especially for wealthier households. </p>
<p>They lead to misguided calls for ever-higher super contributions in order to ensure reach the point where super alone is enough to provide an adequate retirement income, even though many households will have income from other sources.</p>
<h2>Most will have enough super</h2>
<p>Our modelling shows that people starting work today will have adequate retirement incomes: workers of all income levels will retire on incomes at least 70% of their pre-retirement earnings – the so-called replacement benchmark used by the Organisation for Economic Cooperation and Development and the <a href="https://www.mercer.com.au/our-thinking/mmgpi.html#contactForm">Mercer Global Pension Index</a>. </p>
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<a href="https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/244011/original/file-20181105-74763-1bh59aw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>In fact the median (typical) worker can expect a retirement income of 91% of his or her pre-retirement income. </p>
<p>This means that many low-income Australians will actually get a <em>pay rise</em> on retirement.</p>
<p>Even workers in their 40s and 50s today – many of whom didn’t benefit from the present high rate of compulsory super contributions for their entire working lives – can expect a retirement income of about 70% of their pre-retirement incomes.</p>
<h2>So compulsory super can stay at 9.5%</h2>
<p>It means that that there is no obvious case to lift compulsory super contributions from 9.5% to 12% of salary as presently legislated.</p>
<p>Doing so might further boost retirement incomes (especially among those low and middle earners unable to compensate for the higher contributions by winding back other savings), but at the expense of providing lower incomes while working. </p>
<p>As the <a href="http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/publications/Papers/Final_Report_Part_2/chapter_a2-2.htm">Henry Tax Review</a> noted, higher compulsory super contributions are ultimately funded by lower wages than would have been the case, meaning lower living standards while in work.</p>
<p>As it happens, higher contributions would do little to change the retirement incomes of low and middle income Australians. Their extra superannuation income they provided would cut their age pension payments. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-superannuation-myth-why-its-a-mistake-to-increase-contributions-to-12-of-earnings-66209">The superannuation myth: why it's a mistake to increase contributions to 12% of earnings</a>
</strong>
</em>
</p>
<hr>
<p>Higher compulsory contributions would also damage pensions in another way. </p>
<p>The age pension is <a href="https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/pension-rates">indexed to wage growth</a> which would be lower if employers diverted a steadily increasing proportion of their employee budget to super.</p>
<p>It means the most fervent opponents of a lift in compulsory super contributions from 9.5% to 12% ought be those people presently on the age pension.</p>
<p>The government ought to oppose it as well. Diverting more of what would have been wages to more lightly taxed super will strain its budget. Scrapping the proposed increase would <a href="https://insidestory.org.au/not-so-super/">save</a> it an impressive A$2 billion a year.</p>
<h2>We can find better ways to help retirees</h2>
<p>Even if governments did feel it necessary to boost retirement incomes, lifting compulsory super contributions would be one of the worst ways to do it. </p>
<p>Loosening the age pension assets test taper could boost retirement incomes of around 20% of retirees, climbing to more than 70% over time. It would cost the Budget just A$750 million a year – less than half the cost to it of the proposed increase in compulsory super.</p>
<p>The real priority - by far the biggest bang for the buck in alleviating poverty in retirement - should be boosting Commonwealth rent assistance by 40%, providing an extra $1,410 a year for retired singles and $1,330 for retired couples.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/renters-beware-how-the-pension-and-super-could-leave-you-behind-105840">Renters Beware: how the pension and super could leave you behind</a>
</strong>
</em>
</p>
<hr>
<p>Senior Australians who rent privately are much more likely to <a href="https://theconversation.com/three-charts-on-poorer-australians-bearing-the-brunt-of-rising-housing-costs-87003">suffer financial stress</a> than homeowners. And renting will become more widespread as younger generations on low incomes find themselves less able to afford homes.</p>
<p>Australians have been told for decades that they’re not saving enough for retirement. Such claims are inconsistent with the facts. Most of today’s workers <a href="https://insidestory.org.au/the-reassuring-truth-about-retirement-incomes/.">can already expect a comfortable retirement</a>. Forcing them and future workers to save more money for retirement that they’ll never spend is simply a recipe for larger bequests.</p><img src="https://counter.theconversation.com/content/106237/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities as disclosed on its website. </span></em></p><p class="fine-print"><em><span>John Daley and Jonathan Nolan do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Compelling Australians to put even more into super runs the risk of giving them a better standard of living in retirement than they had while working.Brendan Coates, Fellow, Grattan InstituteJohn Daley, Chief Executive Officer, Grattan InstituteJonathan Nolan, Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/941732018-05-10T20:38:59Z2018-05-10T20:38:59ZWho are the wealthy retirees targeted in Labor’s plans?<p>In Labor’s budget reply speech, Bill Shorten reaffirmed the plan to remove refundability of dividend imputation credits. His pitch was to Australian voters on lower and middle incomes, in which he pledged to look after the country’s ageing population:</p>
<blockquote>
<p>We know that giving older Australians the security and dignity they deserve matters more than an $80 billion corporate tax cut. </p>
</blockquote>
<p>The issue of whether or not retirees should be able to get a refund in dividend imputation has sparked considerable discussion of retirees’ income and wealth. </p>
<p>The Household, Income and Labour Dynamics in Australia (HILDA) Survey shows that, overall, retired people tend to have lower incomes than the population as a whole, but higher wealth. This is because retirement typically involves ceasing employment and reducing income, while wealth tends to accumulate with age, at least up to the point of retirement, mainly due to paying off the mortgage and accumulating superannuation.</p>
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<p>The different mix of income and wealth for retired and non-retired households means it’s not straightforward to compare their economic well-being. For example, the HILDA Survey data show that only 23% of retirees aged 60 and over have above-median incomes (compared with 50% of the population as a whole); but 62% have above-median household wealth.</p>
<p>That said, retirees are generally wealthy if they have both above-median household income and above-median household wealth. With this definition, 20% of retirees aged 60 and over are wealthy. This compares with approximately 28% of the Australian population as a whole.</p>
<h2>What does retirement wealth look like?</h2>
<p>Among retirees aged 60 and over, wealthy retirees are on average about two years younger than other retirees, having an average age of 71.8. Nearly 97% of wealthy retirees own their home, compared with 76% of other retirees.</p>
<p>These retirees have net wealth in 2014 (when wealth was last measured by the HILDA survey) averaging over A$2.4 million at today’s prices. </p>
<p>While wealthy retirees have high average holdings of superannuation, investment property and other investments, the home is still the most important component of their wealth. The home is also the most important asset for other retirees, but in 2014 it was worth an average of only A$400,000 (at today’s prices) for these retirees, compared with A$800,000 for wealthy retirees.</p>
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<p>Wealthy retirees get most of their income from superannuation and other investments, although government benefits (mostly the Age Pension) nonetheless average over A$11,000 per wealthy retired household. For other retirees, the Age Pension is the dominant income source, averaging A$24,000 per household.</p>
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<p>The HILDA survey data indicates that both wealthy and other retirees on average pay little income tax - A$4,256 for wealthy retirees and only A$94 for other retirees. Indeed, less than 30% of wealthy retiree households, and only 5% of other retiree households, are estimated to actually pay any income tax. </p>
<p>Moreover, the data show that 42% of wealthy retirees, and 22% of other retirees, have negative income tax because of dividend imputation credits received on their holdings of Australian shares. This does not take into account taxes and imputation credits on dividends received by superannuation funds.</p>
<p>Given the tax-free status of superannuation in people’s “retirement phase” (albeit now only on the first A$1.6 million), it’s likely that more than 42% of wealthy retirees, and more than 22% of other retirees, effectively have negative income taxes.</p>
<p>Whether you consider Labor’s plan good or bad policy, given its exemption of pensioners, it is clear that its impact will be most acutely felt by wealthy retirees.</p><img src="https://counter.theconversation.com/content/94173/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Wilkins receives funding from the Australian Research Council. </span></em></p>Labor’s plan to axe franking credit refunds has reignited debate over the income and wealth of older Australians.Roger Wilkins, Professorial Research Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/886342017-12-11T19:15:16Z2017-12-11T19:15:16ZOlder people now less likely to fall into poverty<figure><img src="https://images.theconversation.com/files/198448/original/file-20171211-27686-1xnrbs9.jpg?ixlib=rb-1.1.0&rect=107%2C95%2C1934%2C1174&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The incidence of poverty among people over 65 is decreasing in part because of increased labour force participation.</span> <span class="attribution"><span class="source">Col Ford and Natasha de Vere/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The risk of people past retirement age falling into poverty is now decreasing. There has been a substantial improvement compared to 15 years ago, when the incidence of poverty among the elderly was 32.4%.</p>
<p>People past retirement age are much more at risk of poverty compared to people of other ages. In 2014, 23% of people over 65 were identified as experiencing poverty, while among the general population this was 10.1%. </p>
<p>If we look at poverty in older age using three alternative, well-established, definitions: the Henderson Poverty Line, the OECD 50% poverty line and the OECD 60% poverty line, they all lead to very similar conclusions.</p>
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<p><strong><em>Read more: <a href="https://theconversation.com/how-we-could-make-the-retirement-system-more-sustainable-78185">How we could make the retirement system more sustainable</a></em></strong> </p>
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<p>The OECD 50% poverty line is defined as 50% of median household equivalent disposable income. Equivalised household income allows for differences in household composition, like the number of adults and children who live in the household. It therefore makes income comparable between households of different sizes. Someone is counted as poor if their equivalised disposable household income falls below this poverty line.</p>
<p>Applying this to data from the Household, Income and Labour Dynamics Australia (HILDA) survey shows clear differences between ages. There’s a much larger incidence of poverty among people over 65, as well as a larger decrease in the poverty rate among those over 65. </p>
<p>Between 2000 and 2014, the prevalence of income poverty among older people declined by more than 9 percentage points, well above the decline of other age groups.</p>
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<p>There are a number of reasons for this decrease in the poverty rate. One is the increase in labour force participation from 6.9% to 12.5% for this older group, whereas for other age groups labour force participation has remained quite stable.</p>
<p>Another reason is the larger increase in pension rates (which is the typical social security payment for people over 65) compared to allowance rates (which is the typical social security payment for working-age people). From an already high base, the payment rates for the oldest age group clearly increased by the most.</p>
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<p>These two reasons combined account for over 75% of the decrease in poverty incidence. Increased private pensions account for a further large part of the decrease (nearly 41%), while changes in investment income would have increased the poverty rate. </p>
<h2>Why pensions are so important</h2>
<p>This shows just how important public and private pensions are for the standard of living of older people. Given that more and more people will be covered by superannuation, we expect that poverty rates will further decline in the future. However, maintaining the value of public pensions is equally important as a substantial proportion of people over 65 will remain dependent on these payments.</p>
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<p><strong><em>Read more: <a href="https://theconversation.com/how-can-we-prevent-financial-abuse-of-the-elderly-84991">How can we prevent financial abuse of the elderly?</a></em></strong> </p>
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<p>Those dependent on the age pension include people with a disability during their working life, and many women, as they remain the ones who are more frequently out of the labour force and working part time to raise children. As a result, these groups have less opportunity to build up sufficient superannuation. However, the age pension may perhaps be better targeted. </p>
<p>Although the largest increases in income support are for those classified as poor (with the largest average increase observed for those over 65), the non-poor population over 65 also receives a substantial increase in income support.</p>
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<p>The increase in payments for people who aren’t poor and over 65 is nearly as large as the increase for those classified as poor who are aged 15 to 64. Payments for working-age people have only been increased with inflation, while pensions increased at the same rate as average earnings which has generally been higher than inflation. </p>
<p>To better alleviate poverty for our whole population, government payments for working-age people need to keep up with average earnings like the pensions do. If the government is not prepared to direct more resources to income support payments, they need to treat different age groups more equally. This means better targeting payments among our older population and using any savings to increase payments for the working-age population at a similar rate as pensions.</p><img src="https://counter.theconversation.com/content/88634/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Guyonne Kalb does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There has been a substantial improvement compared to 15 years ago, when the incidence of poverty among the elderly was 32.4%.Guyonne Kalb, Professorial Research Fellow and Director of the Labour Economics and Social Policy Program, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/808952017-07-30T20:11:00Z2017-07-30T20:11:00ZDownsizing cost trap awaits retirees – five reasons to be wary<figure><img src="https://images.theconversation.com/files/179733/original/file-20170726-30108-h6wbsw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Add up all the neglected costs of downsizing and retirees have good reason to be wary of making the move.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-senior-couple-checking-their-bills-388566784?src=AAHgc3E3V_gFUzd07Jphfg-1-0">wavebreakmedia from www.shutterstock.com</a></span></figcaption></figure><p>It’s time to debunk the myth of zero housing costs in retirement if we want to understand why retirees resist downsizing. Retirees have at least five reasons to be wary of the costs of downsizing.</p>
<p>Retirees living in middle-ring suburbs face frequent calls to downsize into apartments to free up larger allotments in these suburbs for redevelopment. Retirees who fail to downsize into smaller units and apartments are viewed as being a greedy, baby-boomer elite, stealing financial security from younger generations. </p>
<p>It also makes sense to policymakers for retirees to move into less spacious accommodation and make way for high-density housing. Housing think-tank AHURI <a href="http://www.ahuri.edu.au/__data/assets/pdf_file/0021/14079/AHURI_Final_Report_No_286_Australian-demographic-trends-and-implications-for-housing-assistance-programs.pdf">fosters this view</a>. Yet seniors remain resistant to moving, in part because of the ongoing costs they would face. </p>
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<p><strong>Further reading:</strong> <a href="https://theconversation.com/lack-of-housing-choice-frustrates-would-be-downsizers-60512">Lack of housing choice frustrates would-be downsizers</a></p>
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<p>The concept of zero housing costs in retirement is based on a 1940s view of a well-maintained, single dwelling on a single allotment of land where the mortgage has been paid off. This concept is incompatible with medium- and high-density housing and refusing to acknowledge ongoing housing costs may cause significant poverty for retirees. </p>
<h2>Reason 1 – upfront moving costs are high</h2>
<p>When a house is sold the owner receives the sale funds minus the real estate and legal fees. When the same person then buys a different property to live in, they pay legal fees plus stamp duty. </p>
<p>For cities such as Melbourne and Sydney, these costs are likely to exceed A$70,000. </p>
<p>These high transfer costs may mean it is not cost-effective <a href="https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931">for the person to move</a>. </p>
<h2>Reason 2 – levies are high</h2>
<p>Because apartment owners pay body corporate levies, people often assume this is just the same as periodic payment of rates, water, insurance and other costs. It is not. </p>
<p>Fees remissions for low-income retirees for rates, power, insurance and water are difficult to apply within a body corporate environment. As a consequence, these are usually not applied to owners of apartments.</p>
<p>The costs of maintaining essential services, such as mandatory fire-alarm testing, yearly engineering certification, lift and air-conditioning inspections, significantly increase ownership costs. </p>
<p>When additional services are supplied, such as swimming pools, gyms and rooftop gardens, these also require periodic inspections. Garbage collection, cleaning, gardening, concierge and strata management services also <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23322">must be paid</a>. </p>
<p>Owners of standard suburban homes choose whether they want these services, with those on fixed incomes going without them. </p>
<p>Annual levies for apartment buildings vary, but expect to pay between $10,000 and $15,000. They <a href="https://www.strata.community/understandingstrata/faqs">may be more than this</a>.</p>
<h2>Reason 3 – costs of maintenance</h2>
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<img alt="" src="https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=628&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=628&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=628&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=790&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=790&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=790&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Lift maintenance is one of many costs that suburban home owners needn’t worry about.</span>
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<p>Apartments are often sold as a maintenance-free solution for older people. The maintenance is not free. It needs to be paid for. </p>
<p>Maintenance costs are higher in an apartment than a standard suburban home because there are more items and services to be maintained and fixed. Lifts and air conditioning need periodic servicing and fixing. This is in addition to the mandatory inspections listed above.</p>
<h2>Reason 4 – loss of financial security</h2>
<p>It is a mistaken belief that the maintenance costs that form part of the body corporate fee include periodic property upgrades. This relates to items that are owned collectively with other apartment owners. </p>
<p>Major servicing at the ten-year mark and usually each five-to-seven years after that include painting, floor-covering replacement, and lift and air-conditioning repair or replacement. </p>
<p>Major upgrades may also include garden redesign or other external building enhancement including <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23315">environmental upgrades</a>. All owners share these upgrade costs. </p>
<p>Costs of upgrading the inside of an apartment (a bathroom disability upgrade, for example) are additional again. </p>
<p>Once the body corporate committee members pledge funds towards an upgrade, all owners are required to raise their share of the funds, whether they can afford it or not. Communal choice outweighs an individual owner’s need to delay upgrade costs. </p>
<p>Owners who buy apartments that are part of a body corporate effectively lose control of their future financial decisions.</p>
<h2>Reason 5 – loss of security of tenure</h2>
<p>Loss of security of tenure is usually associated with renters. However, the recent introduction of <a href="http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0009/25965/Termination_of_a_strata_scheme_by_RG.pdf">termination legislation</a> in New South Wales gives other owners the right to vote to terminate a strata title scheme. When this occurs, all owners, including reluctant owners of apartments within that scheme, are compelled to sell.</p>
<p>There are valid reasons why termination legislation is desirable, as many older apartment complexes are reaching the end of their useful life. </p>
<p>Even so, as termination legislation is rolled out across the states, owner- occupiers effectively lose control of how long they will own a property for. They no longer have security of tenure, which means retirees may face an uncertain housing future in their old age.</p>
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<p><strong>Further reading:</strong> <a href="https://theconversation.com/when-developers-come-knocking-why-strata-law-shake-up-wont-deliver-cheaper-housing-50971">Why strata law shake-up won’t deliver cheaper housing</a></p>
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<h2>Downsizing raises poverty risks</h2>
<p>Because current data sets do not adequately take account of ongoing costs associated with apartment living, the effect of downsizing on individual households is masked. </p>
<p>Downsizing retirees into the apartment sector creates ongoing financial stress for older people. Creating <a href="https://theconversation.com/it-will-take-more-than-piecemeal-reforms-to-convince-older-australians-to-downsize-51043">tax incentives to move</a> does not tackle these ongoing costs.</p>
<p>Centrelink payments for of <a href="https://www.humanservices.gov.au/customer/services/centrelink/age-pension">$404 per week</a> are well below <a href="http://acoss.wpengine.com/poverty-2/">the poverty line</a>. Yet we expect retirees to willingly downsize and to be able to cede most of their Centrelink payments to cover high body corporate costs. </p>
<p>Requiring retirees to downsize for the greater urban good will shift poverty onto retirees who could barely manage in their previously owned standard suburban home. </p>
<p>Failing to understand the effect of high ongoing costs associated with apartment living and reinforcing the myth of zero housing costs in retirement will continue to lead to poor policy outcomes.</p><img src="https://counter.theconversation.com/content/80895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erika Altmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Retirees are often urged to downsize to free up suburban properties for the next generation and for higher-density development. What’s being ignored is the costs of moving into a unit or apartment.Erika Altmann, Property and Housing Management Researcher, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/800592017-06-27T01:12:28Z2017-06-27T01:12:28ZWhy retirement village contracts need to be regulated like insurance<p>While you may think signing a retirement village contract is similar to buying a house or apartment, it isn’t. Retirement village contracts resemble insurance contracts more than purchase agreements, only they aren’t regulated like insurance products. </p>
<p>The lack of regulation increases the risk for retirees. They face considerable delays in receiving their payments when they leave, costs due to the delay, and the potential loss of all payment from companies that don’t need to meet the financial standards of an insurance company.</p>
<p>Most retirement village contracts provide the consumer with a combination of the right to reside in the retirement village (until death, incapacity for independent living, or voluntarily relocation) and an “exit payment” upon leaving. As both the amount and timing of this payment depends on the resident’s death or ill health, the payment is a de facto insurance payout.</p>
<p>This makes the retirement village contract a combination of the right to reside and a de facto insurance policy. But the insurance policy comes from companies that wouldn’t normally be allowed to sell insurance.</p>
<p>Retirement villages are mostly small private companies or not-for-profit organisations. This means they aren’t required to publish their annual financial statements, hold reserves, or have reinsurance arrangements like an insurance company. The consumer can’t be confident that the retirement village is financially healthy and able to pay out the exit fee, due to the absence of information about their accounts and financial condition. </p>
<h2>Fees and more fees</h2>
<p>There is a great variation in the structure of the fees that retirement villages charge – entry fees, ongoing fees and a so-called “<a href="http://www.fairtrading.nsw.gov.au/Factsheet_print/Tenants_and_home_owners/Retirement_villages/Leaving_a_village/_Departure_fees.pdf">deferred management fee</a>”, which is an amount taken out of the money refunded to departing residents.</p>
<p>These fees <a href="http://www.retirementliving.org.au/industry/services/census/">can be substantial</a> – the entry fee alone is often comparable with the cost of buying an apartment. Although the amount varies by location, one operator told a <a href="https://www.parliament.vic.gov.au/lsic/article/2972">Victorian parliamentary inquiry</a> the entry fee was equivalent to 80% of the cost of a house nearby.</p>
<p>A retirement village contract might have an entry fee of A$1 million, a deferred management fee of 6% of the entry fee per year of residence, and a maintenance fee of A$500 per month. </p>
<p>For a contract with a A$1 million entry fee, after five or more years of residence, the deferred management fee is A$300,000, so the exit payment is A$700,000. But the deferred management fee can vary greatly. It may be 10% per year for three years, or 3% for 10 years etc.</p>
<p>The exit payment can also include some share of the resale value of the apartment. But the retirement village needs to be able to pay out this exit payment.</p>
<h2>The need for proper regulation</h2>
<p>The assets held by retirement villages are almost all invested in real estate. This is risky, as they aren’t diversified and their assets can’t be easily turned into cash. </p>
<p>When a retirement village has to pay a departing resident their exit payment it may take a long time to sell their apartment, which could involve a loss on resale. This can also lead to delays in receiving exit payments.</p>
<p>After signing their retirement village contract, residents are also in a weaker bargaining position than a traditional tenant in a normal pay-as-you-go rental arrangement. This is because residents have already paid their rent in advance for the rest of their life, and it usually costs a lot of money to get out of these contracts. </p>
<p>In some retirement village contracts the resident may be forced to spend a lot of money on renovations – such as for a new bathroom and kitchen – so that the apartment can be sold and they can get the exit payment. </p>
<p>This issue is compounded by the complexity of the contracts, which can be hard <a href="https://www.parliament.vic.gov.au/lsic/article/2972">for both consumers and financial advisers</a> to understand.</p>
<p>This creates substantial risk for consumers, and the lack of a requirement to publish financial statements and related information makes it very difficult to assess the financial soundness of a retirement village operator.</p>
<p>If retirement village contracts are in fact insurance agreements, then they should be regulated differently – by the Australian Prudential Regulatory Authority and not by state governments, as is now the case.</p>
<p>If retirement villages were properly regulated then consumers would be better protected from failure of operators and better protected from delays and capital losses when they get their exit payment.</p><img src="https://counter.theconversation.com/content/80059/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Timothy Kyng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While retirement villages aren’t regulated like an insurance company, their contracts are essentially insurance policies. This puts the risk on retirees.Timothy Kyng, Senior Lecturer, Department of Applied Finance and Actuarial Studies, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/176972013-09-08T20:35:12Z2013-09-08T20:35:12ZHome equity: Australia’s growing wealth divide<figure><img src="https://images.theconversation.com/files/30650/original/28995xyr-1378258446.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1000%2C667&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The proportion of renters is now roughly equal to the numbers of outright home owners.</span> <span class="attribution"><span class="source">Image from www.shutterstock.com</span></span></figcaption></figure><p>For all our talk about housing affordability, few people want house prices to drop. That’s because most Australians are home owners, and much of our wealth is stored in housing.</p>
<p>But recent figures released by the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/4130.0">Australian Bureau of Statistics (ABS) </a> suggest a growing divide between those enjoying the financial benefits of home ownership, and those who may never be able to afford it.</p>
<p>Overall home ownership rates slipped from 69% to 67% between 2011-2012, signifying real change in Australia’s housing system. Age-specific home ownership rates have seen much sharper falls. </p>
<p>Since the Survey of Income and Housing began in 1995, home ownership rates have hovered between 71%-69%, although the proportion of home purchasers (people with mortgages) began to exceed outright home owners in 2004.</p>
<p>By this time Australia’s long housing boom (between 1996-2005) had begun to play out. Younger generations took longer to enter home ownership and needed to take on larger mortgages. As housing equity grew with the rising market, established households tapped into their home loans to finance other purchases, again meaning longer and bigger loans.</p>
<p>While some speculated that Gen Ys were avoiding the responsibilities and commitment of home ownership by choice, a <a href="http://www.coop.com.au/media/white-paper-august-2013.pdf">recent survey</a> of Australian university students reveals that home ownership remains an overriding aspiration for younger people. However, affordability (saving a deposit and meeting repayments) is a major concern for these students. Despite relatively bright employment prospects they fear they may never be mortgage free.</p>
<h2>Housing and wealth</h2>
<p>Home owners are vastly more wealthy than renters. The <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6523.0Main%20Features22011-12?opendocument&tabname=Summary&prodno=6523.0&issue=2011-12&num=&view=">latest ABS figures show </a>that the net worth of renter households was on average only about 13% of that enjoyed by owners with no mortgage, and about a fifth of the net worth of home purchasers. </p>
<p>Housing equity through ownership has provided an important nest egg for older Australians, with baby boomers the main winners in the housing market. Not only did they buy when prices were far more affordable, but family homes barely affect eligibility for the aged pension. If some retirees might over-invest in their castle, others are using super to pay off their home loan.</p>
<p>But although older Australians generally live in their own homes, home ownership among the over-55s has fallen too. This reflects changing household circumstances. Divorce is one of the flashpoints for falling out of home ownership, especially for women, and many are unable to climb back on the ladder. Older, lone person households are more likely to be in private rental than couples, and their financial future seems grim.</p>
<p>Falling rates of home ownership point to a looming problem. Government expenditure on older people, particularly the relatively low rate for the aged pension, depends on minimal housing costs and the capacity for co-payment (for care) by accessing home equity when the time comes. If older people retire with mortgage debt, and worse, without housing equity, ongoing government obligations for income and housing related payments will rise sharply.</p>
<h2>More renters, less equity</h2>
<p>The new data shows that while renting was once considered a transitional tenure, the proportion of renters is now roughly equal to the numbers of outright home owners (30.9%), down from nearly 42% in 1995. The proportion of households renting from a private landlord has grown from 18% in 1994-95 to 25% in 2011-12.</p>
<p>Households in public or social housing has fallen from 5.5% to 3.9% over the same period, exacerbating the shortage of affordable homes. Rather than investing in new social housing construction, government housing assistance has shifted to rental subsidy to help low-income earners afford rents in the private market.</p>
<p>Government subsidies for home ownership (largely through <a href="http://www.bsl.org.au/pdfs/Yates_tax_expenditure_and_housing_2009.pdf">preferential tax treatment</a>) amount to around $8,000 per household per year, but renters get only around $1,000 per year. Support for property investment equates to an additional $4,000. All up, that means in excess of <a href="http://www.rba.gov.au/publications/confs/2011/yates.html">$45 billion</a> for home ownership compared to around $8 billion for renting, including concessions for private landlords through negative gearing.</p>
<p>There’s a generational aspect here too – renters and younger home purchasers get much less than older, higher-income home owners without mortgages.</p>
<p>Worse, as the Henry Tax review highlighted, many of these incentives for property investment push up house prices, further disadvantaging aspiring first home owners.</p>
<p>In 2009/10 only 5.2% of houses sold were affordable to those on lower incomes, and 60% of low-income private renters were in housing stress (when housing costs exceed 30% of income). Overall homelessness has grown 17.3% since 2006, with more than 105,200 Australians sleeping rough, couchsurfing, in crisis or temporary accommodation in 2011.</p>
<h2>A fairer housing system</h2>
<p>In election season, it’s disappointing to see that housing hasn’t really made it on the radar. What can be done to make things fairer?</p>
<p>It’s time to consider real changes to benefit the growing numbers of renters in Australia. The major differences between living in your own home and renting, relate to tenure security and wealth. <a href="http://www.shelter.org.au/index.php?option=com_docman&view=docman&Itemid=487">Reforms to tenancy laws</a> in each state might improve security for private tenants, making rental housing more a choice than necessity.</p>
<p>The <a href="http://taxreview.treasury.gov.au/content/finalreport.aspx?doc=html/publications/papers/final_report_part_1/chapter_12.htm">Henry Tax Review recommended</a> a number of changes to housing and related taxes, including negative gearing, capital gains and land tax and stamp duties. The review also recommended extending the Commonwealth’s rent assistance scheme for lower-income households, while warning that initiatives to increase the supply of housing affordable for low and moderate-income earners are needed.</p>
<p>We’re still waiting for the tax reforms, so what about affordable housing supply? Demand for housing is concentrated in established, inner-city locations accessible to transport and jobs; where supply is inherently constrained. So, just increasing the overall number of new houses produced in Australia won’t fix affordability problems for those currently locked out of home ownership.</p>
<p>Specific strategies to target the production of housing affordable for these groups are needed.</p>
<p>The federally funded <a href="http://www.fahcsia.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme">National Rental Housing Affordability Scheme </a>(NRAS) is worth keeping. It provides tax credits (worth $100,000 per dwelling) to investors or community organisations who build and rent dwellings for low and moderate-income earners, at 20% below market rates.</p>
<p>South Australia, WA and the ACT have all introduced programs to increase the supply of affordable homes for purchase, combining planning requirements and incentives, and in some cases, government land or equity sharing.</p>
<h2>Design initiatives</h2>
<p>Ingenious design may also help. With smaller households and more people preferring to live in inner-city areas near transport, jobs and services, some designers are experimenting with smaller, cost-effective and high-density housing prototypes.</p>
<p>Cash strapped, tech happy Gen Y’s keen to stay in the hood will like the new <a href="http://yo.co.uk/">Yo!Home</a> hitting London right now. A single room transforms to kitchen, diner, lounge or boudoir at the push of a button. It’s cramped, but facebook friends hang in virtual space.</p>
<p>For others, a prefab backyard flat might appeal. Changes to the NSW planning system mean small accessory dwellings (AKA granny flats) are now permissible on most residential lots.</p>
<p>It’s about making sure there’s sufficient housing of all sizes, types and costs in well-located areas. Extending the range of housing options also means sensible and committed strategies for planned decentralisation, in selected suburban and regional centres.</p>
<p>Home ownership rates in Australia have fallen, threatening to deepen the wealth divide. But it’s not too late to make things fairer for aspiring home owners and long-term renters alike.</p><img src="https://counter.theconversation.com/content/17697/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicole Gurran receives funding from the Australian Research Council and has received funding from the Australian Housing and Research Institute (AHURI).</span></em></p><p class="fine-print"><em><span>Peter Phibbs receives funding from the Australian Housing and Urban Research Institute</span></em></p>For all our talk about housing affordability, few people want house prices to drop. That’s because most Australians are home owners, and much of our wealth is stored in housing. But recent figures released…Nicole Gurran, Associate Professor, University of SydneyPeter Phibbs, Chair of Urban Planning and Policy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.