Raising the Age Pension age to 70 will hurt many older workers who can’t choose when they retire, says the Australian Institute of Superannuation Trustees (AIST).
The Federal Social Services Minister, Christian Porter, recently confirmed that it was still Government policy to raise the Age Pension age to 70. Mr Porter said that the Government wanted to increase the Age Pension age from 67 to 70 over the ten year period from 2025 to 2035.
AIST is urging the Government to consider the high level of involuntary retirement before raising the Age Pension age.
“Many older Australians do not get to choose when they retire,” said AIST Ceo Eva Scheerlinck.
“We know that while health plays a role, other factors such as age discrimination, job type and caring demands all have a significant impact on when a person retires from paid work.”
Research conducted by AIST and the Australian Centre for Financial Studies found that up to 40% of older Australians don’t get to choose when they retire, due to a range of factors.
The research found that, according to ABS data, “’community and personal service workers’, ‘clerical and administrative workers’, ‘sales workers’ and ‘labourers’ are between 50 and 35 per cent more likely to retire before the age of 60 than professional workers.”
“Ensuring long-term sustainability of the system is important but we need to make sure there are appropriate mechanisms in place to protect older Australians who are unable to work longer,” said Ms Scheerlinck.
“Any changes that affect access to the Age Pension need to be part of a broader community conversation on retirement objectives.”
“We do need to look at ways to keep Australians in the workforce longer but simply raising the pension age is not the answer.”
The Combined Pensioners and Superannuants Association (CPSA) said that anyone born in or after 1966 should be “very worried”.
“The Government’s push to raise the pension age to 70 is a cynical money-saving policy that will throw tens of thousands of post-babyboomers on the Newstart scrap heap,” said CPSA Policy Coordinator, Paul Versteege.
“Proposing raising the pension age to 70 without worrying how people will maintain employment until they reach that age would be the act of an irresponsible Government. Blue collar workers, tradies and people in disrupted industries who don’t make it to 70 in their jobs, may face well over a decade on Newstart, which is 40% lower than the Age Pension for singles and 22% lower for couples.
“The most recent labor underutilisation rate for people in the 55 – 65 age bracket is more than 12%, more than double the current overall unemployment rate of 5.8%. Clearly, a policy to increase the pension age to 70 without a substantive employment strategy for older people is an anti-social policy.”