The Association of Superannuation Funds of Australia (ASFA) welcomes the Prime Minister’s announcement today that the age of eligibility for the Age Pension will not be increased beyond 67 years.
ASFA CEO Dr Martin Fahy said the decision to no longer pursue an increase in eligibility age to 70 recognises many Australians find it difficult to work into their late 60s due to the nature of their occupation and/or their health.
“Maintaining the existing access age is a fairer public policy than pushing people onto Newstart in their late 60s because they are unable to find or retain employment,” he said.
“Disability rates increase quite sharply for people in their late 60s, with even relatively high levels of take-up of disability support benefits for those aged in their early 60s.”
Dr Fahy said Australia’s Age Pension was affordable at under three per cent of GDP and will continue to be so in the future due to the operation of the means test and more Australians having substantial retirement savings through superannuation.
“An increase in eligibility age beyond 67 is not needed on affordability grounds in terms of public finance,” he said.
“Superannuation is doing more of the heavy lifting and providing higher retirement incomes.
“With the scheduled increase in SG to 12 per cent, ASFA projects the rate of people relying solely or almost exclusively on the Age Pension will halve between now and 2050, from around 40 per cent to 20 per cent.
“It is good to incentivise people working later in life, however the benefit of a safety net for those who are not able to or do not wish to work should be maintained.
“For those able to work, measures announced in the Federal Budget, such as an increase to the Pension Work Bonus, provide incentives to remain in paid work.”
There has been an increase of $50 per fortnight to $300, before income starts to count for age pension means testing.
For further information, please contact:
Katrina Horrobin, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system so people can live in retirement with increasing prosperity.