Reevaluating Retirement: Should 70 be the New Standard Age for Pensions?
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Our Senior Discount Club members might remember the good old days when men looked forward to retiring at 65 and receiving the Age Pension, while women's pension age was set at 60.
However, times have changed over the past decade, with the introduction of incremental rises in the pension age, taking it to 67 for all Australians from 1 July 2023.
But how would you feel if the pension age was raised even further, to 70?
Backtracking a little, it was the Rudd Labor government who legislated the pension age increase to 67. However, in May 2014, the then Treasurer Joe Hockey made waves by announcing the pension age would rise to 70 by 2035, a proposition that was met with public outcry and faced serious backlash.
Remember the famous slogan: 'Only a bloke who's worked in an office his whole life would think you can work until you're 70'?
Years later, Scott Morrison officially dropped the age-70 target as a Liberal policy. Micheal McCormack, his deputy, said it was 'probably a step too far', adding, 'I think if you are a tradie, or a brickie, or a shearer in rural and regional Australia, you don't want some suit in Canberra telling you you're going to have to work until you're 70'.
While many can rejoice for now, as all Australians will soon have the same retirement age for the first time in over a decade—there is no guarantee that the debate over raising the pension age is over.
Recently, a group of academics revisited the statistics and released a report suggesting that further pension age increases may be warranted to ensure the country has a sufficient supply of workers in the future.
Macquarie University Business School Professor Hanlin Shang and his co-authors recommend three more pension-age increases over the next 27 years, stepping up to 68 by 2030, 69 by 2036, and 70 by 2050.
The proposal is based on factors such as Australia's low birth rate, which impacts the number of workers available to sustain an ageing population.
Professor Shang says, 'Fewer people in the working group and more in retirement will make the old age dependency ratio (OADR) higher. What this means is there are fewer working people to support elderly people, and with more elderly people in the population, this will create a burden for the government pension system.'
Unsurprisingly, the proposal has been met with criticism. One Australian worker told a news outlet, 'Try and be a tradie at 70,' while a retired nurse added, 'People in their 60s are exhausted. I've got back pain from nursing. I cannot work anymore. People should not have to work in old age.'
In response, National Seniors Australia, a non-profit membership and advocacy organisation, has firmly opposed the proposal to increase the pension age to 70. They argue that numerous individuals leave the workforce due to poor health and are unable to sustain employment. Instead, they propose an alternative solution: providing incentives to those who wish to work for a longer period.
Their campaign, known as Let Pensioners Work, advocates for a reduction in the income test taper rates. This will enable individuals to retain a larger portion of their pension if they opt to continue working. National Seniors Australia believes this approach is more equitable than raising the pension age, as it recognises and rewards individuals who have the desire and necessity to work.
As Chief Advocate Ian Henschke recently told Radio 4BC, 'If you are on a pension, you want to keep working; let them work, and it'll be a win for the economy, a win for the pensioners themselves, and a win for the government'.
Members, we'd love to hear your thoughts on this matter. Should the Australian pension age remain at 67, be raised to 70 as proposed, or revert to 65 as previously set? Are there any alternative suggestions that would better suit the needs of the ageing population? Share your opinions in the comments section below, and let's talk!
However, times have changed over the past decade, with the introduction of incremental rises in the pension age, taking it to 67 for all Australians from 1 July 2023.
But how would you feel if the pension age was raised even further, to 70?
Backtracking a little, it was the Rudd Labor government who legislated the pension age increase to 67. However, in May 2014, the then Treasurer Joe Hockey made waves by announcing the pension age would rise to 70 by 2035, a proposition that was met with public outcry and faced serious backlash.
Remember the famous slogan: 'Only a bloke who's worked in an office his whole life would think you can work until you're 70'?
Years later, Scott Morrison officially dropped the age-70 target as a Liberal policy. Micheal McCormack, his deputy, said it was 'probably a step too far', adding, 'I think if you are a tradie, or a brickie, or a shearer in rural and regional Australia, you don't want some suit in Canberra telling you you're going to have to work until you're 70'.
While many can rejoice for now, as all Australians will soon have the same retirement age for the first time in over a decade—there is no guarantee that the debate over raising the pension age is over.
Recently, a group of academics revisited the statistics and released a report suggesting that further pension age increases may be warranted to ensure the country has a sufficient supply of workers in the future.
Macquarie University Business School Professor Hanlin Shang and his co-authors recommend three more pension-age increases over the next 27 years, stepping up to 68 by 2030, 69 by 2036, and 70 by 2050.
The proposal is based on factors such as Australia's low birth rate, which impacts the number of workers available to sustain an ageing population.
Professor Shang says, 'Fewer people in the working group and more in retirement will make the old age dependency ratio (OADR) higher. What this means is there are fewer working people to support elderly people, and with more elderly people in the population, this will create a burden for the government pension system.'
Unsurprisingly, the proposal has been met with criticism. One Australian worker told a news outlet, 'Try and be a tradie at 70,' while a retired nurse added, 'People in their 60s are exhausted. I've got back pain from nursing. I cannot work anymore. People should not have to work in old age.'
In response, National Seniors Australia, a non-profit membership and advocacy organisation, has firmly opposed the proposal to increase the pension age to 70. They argue that numerous individuals leave the workforce due to poor health and are unable to sustain employment. Instead, they propose an alternative solution: providing incentives to those who wish to work for a longer period.
Their campaign, known as Let Pensioners Work, advocates for a reduction in the income test taper rates. This will enable individuals to retain a larger portion of their pension if they opt to continue working. National Seniors Australia believes this approach is more equitable than raising the pension age, as it recognises and rewards individuals who have the desire and necessity to work.
As Chief Advocate Ian Henschke recently told Radio 4BC, 'If you are on a pension, you want to keep working; let them work, and it'll be a win for the economy, a win for the pensioners themselves, and a win for the government'.
Key Takeaways
- The pension age for all Australians is set to be 67, effective on 1 July 2023, after incremental rises were introduced a decade ago.
- In 2014, then Treasurer Joe Hockey announced plans to further raise the pension age to 70 by 2035, but this was met with public backlash and was later dropped as Liberal policy.
- A group of academics have recently released a report suggesting three more pension-age increases over the next 27 years, reaching 70 by 2050, to ensure a sufficient supply of workers in the future.
- National Seniors Australia, a not-for-profit membership and advocacy organisation, rejects calls for raising the pension age to 70 and has instead launched the Let Pensioners Work campaign, advocating for reduced income test taper rates to provide incentives for those who choose to work longer.
Members, we'd love to hear your thoughts on this matter. Should the Australian pension age remain at 67, be raised to 70 as proposed, or revert to 65 as previously set? Are there any alternative suggestions that would better suit the needs of the ageing population? Share your opinions in the comments section below, and let's talk!