Living Longer, Working Longer – is this the new the Australian way?

Australians born after 1966 will now not be eligible for the aged pension until age 70.  The measure first flagged in then treasurer Joe Hockey’s 2014 budget, was expected to be scrapped but seemingly has now become a reality.

Age to which pension will be raised Date this applies People effected Earliest date from which you qualify for the age pension
65.5 1 July 2017 1 July 1952 to 31 December 1953 1 January 2018
66 1 July 2019 1 January 1954 to 30 June 1955 1 January 2020
66.5 1 July 2021 1 July 1955 to December 1956 1 January 2022
67 1 July 2023 1 January 1957 to 30 June 1958 1 January 2024
67.5 1 July 2025 1 July 1958 to 31 December 1959 1 January 2026
68 1 July 2027 1 January 1960 to 30 June 1961 1 January 2028
68.5 1 July 2029 1 July 1961 to 31 December 1962 1 January 2030
69 1 July 2031 1 January 1963 to 30 June 1964 1 January 2032
69.5 1 July 2033 1 July 1964 to 31 December 1965 1 January 2034
70 1 July 2035 1 January 1966 and later 1 January 2036

 

Australians aging population and shrinking tax payer base is certainly driving this move.  Consider the following:

Year Tax payers (approx.) Retirees
1970 7 1
2017 4 1
2056 2.5 1

 

This coupled with the fact that the cost to taxpayers of the age pension will rise from $39.5 billion in 2013/14 to 72.3 billion in 2023/24, has resulted in Australians potentially retiring later in life.

So, what does this mean for you?

  • Don’t worry you can retire whenever you want provided you have enough money to do so.
  • If your born prior to 1 July 1960 you can access your super at 55, if you are born after 1 July 1964 its 60 and if you are born in-between these dates its somewhere between 55-60 subject to meeting conditions of release.
  • If you are born after 1 January 1966 and require Centrelink income to live you may need to work until you are 70
  • Many older unemployed workers may be pushed on to Newstart benefits which are far lower than the pension until they reach 70
  • Physical and mental wear and tear on the mind and body may be prolonged

Given that this change went through quietly and a Federal Budget occurs each year, who’s to say that in ten years’ time we won’t be working until we are 75?

Source – the news daily