The sharing economy and pre-retirees

Written and accurate as at: 10 November 2016

The sharing economy currently consists of ride sharing (e.g. Uber), staying (e.g. Airbnb), buying (e.g. Gumtree and eBay), car sharing (e.g. CarNextDoor), services (e.g. Air Tasker) and funding (e.g.  Kickstarter) whereby users and providers are connected through a facilitator who usually operates an ‘app’ or website.

There is an index called the ‘RateSetter Sharing Economy Trust Index’, which seeks to measure the attitudes and behaviours of Australians towards sharing economy services.

RateSetter has found that nearly two thirds of Australians participated in the sharing economy in the last six months.


In terms of spending and earning habits, the figures show that on average:


  • 34% of Australians using goods and services in the sharing economy spend more than $50 per month: 18-24 years $105; 25-34 years $120; 35-44 years $102; 45-54 years $77; 55-64 years $74; and, 65+ years $52.
  • 21% of Australians providing goods and services in the sharing economy earn at least $50 per month: 18-24 years $122; 25-34 years $120; 35-44 years $93; 45-54 years $74; 55-64 years $115; and, 65+ years $55.

The recent bi-annual report by RateSetter has seen an increasing number of pre-retirees participating in the sharing economy as providers and suggests that the reason behind this in an attempt to boost their wealth and income because finding traditional jobs is proving to be challenging for that age group in the contemporary work space.

If you are considering getting involved in the sharing economy as a provider, it pays to seek professional advice to understand your potential upfront and ongoing tax obligations, estate planning considerations, as well as discuss how this new participation fits into your financial goals and objectives. Here are a few important things you may need to consider discussing with your:

  •  Tax adviser:
    • Are you carrying on an enterprise or simply selling goods or performing a service as a spare-time activity or pastime,
    • What GST credits and income tax deductions can you claim for your expenses related to earning your income?
    • How may be an appropriate way to record your income and expenses so that you can keep track of your activities, provide accurate tax invoices for your sales, as well as assist with tax obligations when they arise?
    • Do you qualify to make tax deductible contributions to superannuation under the 10% income test rule?
    • Potential Capital Gains implications on using a main residence for income-producing purposes.
  • Solicitor:

    • Making sure that you are aware of regulatory frameworks governing the provision of goods and/or services such as Australian Consumer Law and its jurisdictional implementation (e.g. the Competition and Consumer Act 2010).
    • If you are renting out a room, thoughts towards potential implications this may have on the Capital Gains of your main residence or investment property when you choose to pass this asset from you to your beneficiaries via your estate plan.
  • Financial adviser:

    • How to grow your retirement nest egg with the income earned from providing goods and services. For example, if you don’t need the extra income to help cover your day-to-day living costs, it may make sense to establish a regular savings plan and/or ad-hoc contributions directed towards investing inside or outside of superannuation (concessional and non-concessional contribution limits apply) or paying off any outstanding debts.
    • If you are struggling to make ends meet or want to take a slight step back from work prior to full retirement, whether a transition to retirement strategy may suit your particular situation.
    • And, depending on your situation, making sure you have a Plan B in place, a personal insurance plan, just in case something happens between now and your retirement date that may disrupt the hard work you are putting in towards making your financial goals and objectives a reality.

Regardless of your age, it is easy to see that the tides are changing in the goods and services industry as we become more and more connected with each other, but one of the most common factors still affecting trust in the sharing economy continues to be a lack of understanding of how it all works. So before riding the sharing economy wave as a user and/or provider, it may be a good idea to educate yourself so you can get the most out of it.