OLDER workers must be encouraged to stay in the workforce if Australia is to avoid an explosion in the cost of the age pension, according to proposals to be taken to the federal government's tax summit this week.
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The Age Discrimination Commissioner, Susan Ryan, wants age restrictions on workers compensation and income insurance scrapped and a national standard introduced.
''Most people in their 60s and 70s would like to be in work, probably part time, but if people can keep a job after 65 they can't get workers compensation or income insurance,'' she said. ''People don't want to employ people they can't get cover for.''
There are age limits on workers compensation in all states other than NSW and Western Australia.
Ms Ryan, a former Hawke government minister, wants the tax summit to examine ways of keeping older people working for longer, which would ease the burden on the pension system.
This week's summit will examine a range of taxation issues, with one session devoted to the complicated interaction between payments, such as the pension, and taxes which often act as a disincentive for people to work.
The Treasurer, Wayne Swan, said the government was committed to introducing ''better incentives to work for students, single parents and pensioners to boost workforce participation and strengthen our economy''.
The tax forum would ''help us build on our substantial record of tax reform by identifying potential priorities and reforms,'' he said.
Ms Ryan said most older people wanted to keep working, but found themselves battling stereotypes which portrayed them as too frail or ignorant of modern technology.
''Although we hear a lot about the health issues for very old people we shouldn't forget there are plenty of people in their 60s, 70s and beyond who want to work and there shouldn't be these impediments,'' she said.
''Most people live healthy, vigorous lives until close to their time of death. Most people don't get dementia. Most people don't go into residential care. We have got this idea that when you're in your 60s and 70s you're a huge burden.''
Ms Ryan is the first Age Discrimination Commissioner.
The Age Discrimination Act has only been in place since 2004, but Ms Ryan says it is under-used by the people it is designed to protect.
''[Age] is different from other discrimination issues because everyone gets older,'' she said.
