Older unemployed out of retirement review

Finance Minister Mathias Cormann insists there is no chance the adequacy of unemployment benefits will be included in an upcoming review of retirement policies.

Despite thousands of older Australians living on the Newstart allowance, Senator Cormann is determined to separate the issues.

More than 23 per cent of jobseekers nearing retirement age have been on the dole for more than a year, receiving about $40 a day in Newstart payments.

This compares to the aged pension of $926.29 per fortnight given to retired Australians, aged over 65.

Senator Cormann agreed that being out of work was tough but ruled out adding Newstart payments to the Morrison government's review of retirement policies.

"Newstart allowance is not a retirement income," he told Sky News on Friday.

Treasurer Josh Frydenberg is working on the terms of reference for the government's review, recommended by the Productivity Commission in January, as part of its inquiry into the superannuation sector.

The review is expected to take up to 18 months to deliver its findings.

In the meantime, Newstart and related welfare payments will be examined in a wide-ranging Senate inquiry, due to report its findings in March next year.

The government has been steadfast in its refusal to lift Newstart and opposed the inquiry.

But it was defeated on Thursday when crossbench senators joined Labor and the Greens to send the issue off to an upper house committee for scrutiny.

Senator Cormann reiterated the government's policy focus on getting more Australians back to work.

"Two thirds of people on Newstart allowance are on it for less than a year, it is not designed to be an ongoing payment," he said.

The Australian Council of Social Service says that at $277 a week, Newstart is the lowest such payment in the OECD.

A Salvation Army report found, on average, people on Newstart have $17 a day left after covering accommodation costs.

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