Increase in Age Pension age to 70:
Is this a good idea?
On 1 July, the Age Pension eligibility age will increase to 67, the final incremental increase in a process that started in 2017 when the eligibility age was 65. .
Unlike the situation in France, where the official pension age will rise in one hit by two years, from 62 to 64, Australian politicians have managed our increases in a much more orderly manner.
So we can now breathe a sigh of relief, secure that the age of eligibility won’t increase again, any time soon?
Not quite.
Recent research from the Macquarie Business School has recommended further increases to the qualifying age – all the way up to age 70 in 2050. This would see an increase to 68 by 2030, 69 by 2036 and 70 by 2050.
Why, you may well wonder?
The stated need for such an increase is based upon meeting a target of 23% for the somewhat unflatteringly named ‘Old Age Dependency Ratio’. This is a measure of people aged over retirement age and not in the work force, divided by ‘working age’ adults (15-67).
One of the authors of the research, Professor Hanlin Shang, noted:
“While it’s great that we are living longer, it may not be good for the government pension system. Who would have ever thought there would be so many centenarians? As people live longer, there is a longevity risk and they’ll consume more pension from the government.”
“Less people in the working group and more in retirement will make the old age dependency ratio (OADR) higher. What this means is there is less working people to support elderly people. And with more elderly people in the population, this will create a burden for the government pension system.”
Other solutions offered by Professor Shang and his fellow researchers focused on increasing the number of taxpayers through possible increase to migration and more government incentives to increase the total fertility rate.
These insights are arguable.
The article sharing the solution of a higher Age Pension age did not mention superannuation. As more Australians retire, they will retire with higher and higher super balances owing to the number of years compulsory superannuation has been in place (more than 20). The higher the balance, the lower the likelihood of receiving a full or even part-Age Pension. Over time the pressure on government coffers to provide an Age Pension will reduce.
Separately, but just as importantly, there is an inherent assumption that all citizens under retirement age – whether the previous 65, soon to be 67 or proposed 70 – are fit and able to work. Those who are not will be forced to live on Job Seeker payments unless they have sufficient savings to fully fund themselves.
Similarly the ‘Old Age Dependency Ratio’ is not just poorly named, it’s wildly inaccurate. Sadly the Gross Domestic Product (GDP) in Australia does not measure the value of volunteering, estimated to total $17.3 Billion. Many retirees turn to volunteering after leaving work, but this contribution is not recognised when the ‘dependency’ ratio is calculated.
Other unrecognised inputs from the older population include inter-generational wealth transfers, often in the form of inheritances, but now, more frequently, as living gifts in the form of home deposits, education, cars and other significant loans or gifts. And then there are the boomerang kids who return to live rent free in order to save for their own home thus increasing household costs for their retiree parents. Or the army of grandparents who provide free child minding so many hours every week. You only need to wander past a primary school at pick-up time to see this in action.
The notion of older Australians as ‘dependent’ is both inaccurate and poorly measured. Basing an increase to Age Pension eligibility age on this ratio is questionable at the very least.
What are your thoughts?
Do you believe that there is a case to raise the Age Pension eligibility age? Or would you keep it at 67 (post 1 July) for the foreseeable future?
Don’t forget you can check your own Age Pension eligibility using our free calculator at any time. With the change to entitlement age moving to 67, your own situation may be about to change.
I am 65 and 8 months pushing through until 67. I am cranky with the government as I was retirement planning for 60 initially, then 65, now I have to go for another year and 4 months with bad knees, and problem hands…
The federal government’s long term objective is to minimise the amount they need to fund retirees “Full Stop” if any person thinks they are going to be looked after should think again. That’s not going to happen. Trouble is working until you are 67 also had its drawbacks because Workers Compensation laws drastically increase on employers for older people as they are deemed ” High Risk” it’s another case of the governments in Australia putting the cart before the horse. Superannuation is no longer viable either after 65 and you cannot contribute any further but ironically the federal government still wants your taxes each week. Wake up Australia
My main gripe with this is that it doesn’t apply to the pollies. They get theirs as soon as they leave government.
yes I don’t blame you ..it’s about time gov stopped paying young ones with kids and sent them out to work .
I don’t understand why the government wants us to still be working till 67. Not many of us will live to 80-90, and those of us that do have will have other medical conditions that come will old age. Why can’t we enjoy our twilight years & get those youngsters (20-40year olds)who are getting benefits from the government for just sitting and doing nothing.
it is ludicrous to think that, older Australians will be able to actually get a job. the attitude of employers is so ageist as to be stupid. Most older Australians con not do the tech or manual labour required, past age 67 onwards.
How many employers would hire old folks???
The answer is not many I returned to Australia during the COVID hysteria at the age of 62 I applied for well over 50 jobs I could do with my eyes shut ,I got 2 interviews and no job , I know myself as a former manager of a company any resumes I received for positions advertised if they were over 45 they weren’t considered ,karma I suppose
as a 74 year old man and once a tradesman ln the building industry most of us are buggered by the age of sixty which is a product of manual work all our lives / the ones who sit in an air-conditioned office making these changes to our lives need to spend time in the real world where most of us live perhaps things would be different
Some of us could work till we are 80. At 65 I thought I could go on working, now at 75
I know it was good to have retired at 65 so we enjoyed the good years out of work.
It depends on your work, mine was more on the physical side and I can well believe
that a person with an interesting job in an office with air conditioning can go on longer than
a person on his/her feet constantly. Let people retire at a decent age please.
As a fitter machinist that works in a freezing cold shed in winter, and a very hot one in Summer, i find it difficult now ( age 65 ) to perform the physical duties of this trade, and i have to do this for another two years.
I have friends, my age that are brickies, and Labourers. They are also thinking that they wont be able to do this trade till 67 which is their current retirement age.
Do politicians understand that not all people get to be in air conditioned buildings most of their life with nothing much heavier than a lap top to carry around and a pen to push.
How people in physical trades are expected to work untill 67 cruel, let alone expecting them to do these physically demanding jobs untill age 70.
Fair go!!!!
One size fits all is NOT a good model.
ABSOLUTELY DISAGREE with this hike in pensionable age. I started working and paying taxes at 16. That is at least 30 years paying tax on a teaching wage. ( also raised four kids) My husband has worked for 50 years paying big taxes. now he gets the ‘piddling little’ old age pension…BUT I cant get the OAP for 2 more years , still ONLY 64 yrs old, AND, if I do ONE days work as a teacher he loses his WHOLE weekly pension.
I’m 65 this year. Chose to stop work at end of 2022 due to health issues and now we live on the pension….woo hooo
And don’t even get me started on applying for Job Seeker. What a mission in frustration and time wasting !!!! Grrrrrrrr
I started working after school at 13 saying I was 15
We older Australians have contributed in so many ways.We deserve a decent income and health care in our old age. I read in countries like Turkey depending on your age and service you can get the age pension earlier it’s not considered a handout from the government it’s your right you also receive the maximum amount regardless of your income.
I think the our system needs a massive shake up.
Greece also has a similar system but they went broke.
It’s not our fault we seem to be living longer but why should we suffer at work because we have to be there. We may live longer but this does not mean we are not suffering. It’s hard to work at 65 let alone 70. We should be able to enjoy our retirement years not suffer and not be able to do anything
One size fits all is NOT a good model.
I turned 66 in March, 2023, I have heard I can retire at 66 years and 6 months, in September?? Is this correct???
Hi Marilyn, thank you for seeking our guidance! If you were born prior to 31/12/1956 then you can apply for the Age Pension at 66.5 but otherwise anyone born from 01/01/1957 onward must be 67. You can apply 13 weeks prior to turning 67 to allow Centrelink time to approve your claim before you are due to receive your first payment.
I am 64 this year. Like so many others I have worked since I was 16. I had no idea I would have to work for so long. That is not old by any means, however you try to find a job at this age. You get overlooked. I spent the last 20 years in Admininistration in Aged Care and could not secure a job doing the same thing with all my experience, why? My beliefs is that there is age discrimination. No one will tell you that but it exists. You can’t blame the employers either. This can lead to mental health issues, depression and anxiety, putting another stain on the health system. We are taking up jobs younger people could have. I worked with so many colleagues in the Aged Care industry that just wanted to retire but could not. Some had health issues, some just wanted to assist family and help with the grandchildren etc but had to keep working. Two people I know eventually had bad accidents at work and had to quit. Another that cared for her grandchildren and worked, got cancer at 67 and passed away. They all had to work.
In Aged Care there were residents that were ages from 68 upwards some even younger. So basically you might have to work then go into care (but that’s if you can afford it!).
Increasing the retirement age to 70 might fit with some people but there are others who have worked in manual labour all their lives whose bodies cannot keep up with the type of work they are suited to. How will the Government decide who can and can’t retire? Needs a lot more thought and discussion before putting an age to retirement, it is very subjective and there are many variables.
I have worked hard without hand outs from the Government never been without a Job I’m now at a time were I’m self funded retirement with my super that I contributed to I think it’s time the Government done something about the hand out to people who just don’t want a Job. If we have to have a vote on the referendum for a first nations vice to parliament the we should have a vote on this of course if your a politician you can retire much earlier with a much higher fund not happy
Very poor rsearch from the Macquarie Business School as it includes the 23% Old Age Dependency Ratio’ but excludes many other factors that are relevant eg physical work, health for quality of life, stress, and many more. I stopped at 65 due to hernias, hip replacement & then heart attack and are currently self supporting on my Super until can get some pension.
Disagree with pension hike totally
life expectancy has stopped rising and is now dropping back it’s around 80 now in QLD so that argument doesn’t work
I started work at 14 in the UK so
I’ve worked 52 yrs already 1 to go
although haven’t worked full-time for a while due to major health issues.
I think the government just wants us all dead so they don’t have to pay the pension
Give the young people the job’s
rather than pay them job seeker
For women the pension age went from 60 to 67 in one foul swoop. I don’t call that a reasonable increment. When the average person hits 60 they are tired and usually have some or alot of medical issues so 67 is hard to work fulltime. Even if you work in an office, your mind is not as quick and your memory is not as good so you make more mistakes which employers don’t take kindly to. So raising it to 70 is ludicrous for the average wage earner. How old are the politicans when they retire on their full salaries for the rest of their lives. They are hyprocrites and can’t understand or see what this will mean to the country. Homelessness increases, old people have no quality of life because they can’t even feed themselves due to being sacked for under performance. Then the government has to fork out unemployment benefits. Use your minds to see the other side of your plan and stop forcing Australia in becoming a third world country with only the rich being able to actually live a life worth living.
I don’t see politicians having to work till 70 ! As Aussies we each have an inherant right to retire and enjoy some years of R & R , after paying income tax, GST, medicare levy and emergency services levy for many years;- and not be forced to work till 70 (or longer) and be too old to enjoy an active recreation, or just die after a few years. — Regardless- not many can live on the meagre age pension. I suggest for equality that all politicos be forced retire on the same commonwealth aged pension as we of the population. Maybe then they’ll vote for an increase in a more survivable aged pension. 65 is even too old. Come on- give us lifetime workers a fair go.
Basically the politicians on inflated pension schemes are out of touch with reality. They get there staff to do all the figures and if they push the retirement age to 70 they know more people will fall off the perch in those extra 3 years ,less pensions to pay. it amazes me having worked 53 years and now 70 payed taxes and still paying tax all my life, that if you are to lazy to work or just keep having kids etc and don’t work, then the government just throws money at you through Centrelink….yet those of us who worked long hours ,went without ,didn’t have holidays ,we are now penalised in our old age ,pensions are cut if we earn interest on our savings etc…the older we get the government penalises us more.Also if you are offered a job at over 67 and your on the pension ,the government penalises you for continuing to work…thats the other thing politicians sprout off about the mature age work force ,yet age discrimination is rife with employers, even government, employment agencies etc, it is all smoke and mirrors by politicians and political parties to get your vote. As for Superannuation it is the biggest rort by government, that money would be better of coming off your mortgage than going into a superfund, it would save you thousands and years less paying a bank for a home loan…its all rigged by government, banks,supefunds etc.Anyone who works a full 45-50 years of there life should be entitled to a full pension at age 67 and the pension shouldn’t be reduced just because you worked hard and have savings in the bank and own your home.In this country now the harder you work ,the more the government penalises you in retirement. How far out of touch are politicians, one just resigned in WA and gets a $5000 per week pension for the rest of his life indexed to inflation, not bad is it for 27 years work.Just shows you how much politicians rally care about us.A single pensioner gets $500 a week…big difference and if the pensioner works to supplement his pension to get by ,he or she is penalised ,their pension payment is reduced.
I hate say it this country is being stuffed by WOKES,sacred sites,Political parties and so called minority so called do-gooders and the politicians are more concerned about this and their re-election than what 95 percent of the population (yes the real people who keep the country going) want. Sent without prejudice.
Hi, I had an office job that relied heavily on my technical knowledge until at 66 I retired mostly because I was losing my mental acumen. Now almost 2 years later I know that to capably continue in my job I would have had to consider a demotion to less demanding work. In actual fact I was struggling mentally for about the last 12-18 months of my work-life. I think 65 would be a reasonable age for retirement. Maybe there should be more focus on younger and middle-aged people being financially productive. One idea would be to only encourage people who actually need a specific university degree to attend university. When I attended uni in my late 40s with my specific goal in mind, I undertook a particular degree and it worked for me. However the majority of students at uni were either young, deferring paid work with no intention of using their degree in employment, or were older students using uni to get Austudy and with no intention of ever getting a job or repaying their HECS/FEE-HELP debt. I don’t believe it is right to blame the Old Age Dependency Ratio on older people, most of whom have worked since their teens, without putting pressure on people in the 17- 65 age group to contribute all that they can to balance the other part of the ratio. But then from the government’s angle, it is probably easier to deny the age pension than to get all people to work and contribute their share.
I feel the Government think that life is easy working – what do they do mostly sit all day and talk. When do people get to enjoy life before they are too old to do much due to aging process. It should be up to person themselves after 60 if they want to continue working or take the pension and take out their supers to live on for the rest of their days. Time is too short to keep working – you never know when you time is up but seriously when we get older and have not had much time let alone money to enjoy life let us enjoy while still fairly young 60 should be the limit and then up to you yourself to make decision to stay working f/time p/time casual or not at all and take on the age care pension to live on. Peoples Choice!
I will be 68 in a few months and will probably work til I am 70 from choice. I love my work as a therapist and am not ready to retire. I have reduced my hours though and only work three days per week. I am fit and health, don’t suffer from pain or chronic illness but I know that is not common for many people my age.
My husband retired at 66 and was glad to. After a lifetime of physical labour, his body was struggling. I know that each person’s situation is different. many people in their late 50s and early 60s suffer from chronic pain and wish they could retire. I think it is unrealistic to expect all people to work til they 70.
I have worked full time since I joined the work force in 1976. All my work has been pretty much in well paid (coal and electricity industries) Read well paid also read highly taxed (up to 49c in the $).
The situation in place during my career was pay higher tax to fund our pension. So I worked hard to fund my pension at 65. My generation didnt get any government hand outs. Our culture was you want something you work and save for it. You want kids? You work to provide for them and you dont get any freebies.
Our housing interest rates in the 80s went up to 17%.
Now along comes the great PM Scott Morrison! Change the pension age to 67 and wanting 70. The comment “the age of entitlement is over “gets made. He as a politician with his pension fund has the gall to say to me and my generation that we think we are entitled by expecting the pension we paid for to be delivered at 65 is the most absolute insulting comment any politician in Australia has ever made. Absolute piece of garbage!
The age of entitlement is now, current generation wants everything right now and work for it? Mmm maybe not.
My partner is younger than me. I am retired and on a pension. He is 64, with rheumatoid arthritis which is a chronic condition with no cure. He was a builder and very physically fit and active until 6 years ago. ( aged 58) He is now struggling to work and has been in agony with the pain. Some days he is too exhausted to function. He missed out on a disability pension by a fraction and now has to suffer the indignity of being “managed” by an employment agency, and is on job keeper. No one wants to employ a man who has a chronic disease that means he is not able to work regular hours, is in and out of hospital for treatments and infusions, and is made to apply for work that he cannot do. Making people work until 70 is cruel. People who do very hard physical work are struggling to make it to 67 as it is. It’s so easy for these pen pushers to make up the rules when they haven’t done a days physical work in their life.
I struggle everyday to go to work, I have bad knees and riddled with arthritis. I started work at 16 years of age and had many years where there wasnt any compulsory superannuation. So for years of working there was nothing put away for my retirement. I worked in poultry farms and dairy farms. I have had a fairly strenuous type of employment over the years and now I am paying for it. I get so upset knowing i have to keep working until i am 67. I am now 62 years old and so tired life seems to be such a struggle. My husband is still doing rural fencing and i am not sure he can keep going for another 2 years until his retirement. We have heaps of medical appts we have to go to and not enough sickies to cover them. I think the Government need to reassess the retirement age and bring it back down to at least 65. We have paid taxes for a lot of years and should be treated with respect not the countries burdens.
I read last week either Thursday or Friday in the news of MSN website that there would be no increase in aged pension, and aged pensioner recipients on retirement would be encouraged to work to be able to save money than saving from pensions, and get superannuation savings. Also, aged pensions would be stopped by the gov’t soon or later as people get superannuation from working as one of the plans of the gov’t.
Yep the Australian government really do punish the hard worker. Work longer hours and pay a stack more tax turning an extra 800 into $300 if lucky! Work until 67 and pray you can keep doing your physical and labouring job while politicians waltz around in tax payer funded cars on their tax payer funded high incomes, only for them to walk away with a taxpayer funded superannuation to make your eyes water. So many people are dying in their 60s and Covid has and still is knocking off so many more. Think they don’t mind this so they can stop paying existing pensions. So unfair under the guise of saving money. Reduce some high paid government wages on all levels and give our older folks the retirement they deserve at a time when they actually can enjoy it! With a seven year difference (I’m older) in age I’ll be waiting a long time to actually enjoy some retirement age with my husband.