IF YOU’RE about to turn 65 and hoping to become eligible for an age pension or part pension, you’re out of luck.
From July 1, the pension age rose by six months to 65 years and six months as part of the federal government’s attempts to cut back on welfare spending, particularly across the ageing sector.
The pension eligibility age will continue to rise by six months every two years until it reaches 67 in July 2023.
There are no changes for anyone born before July 1, 1952. For these people the age pension qualifying age remains 65.
The federal government has also confirmed that its proposal to raise the pension age to 70 by 2035 is still policy although not yet legislated.
In effect, it means unemployed older people who can’t find a job, or who are no longer physically capable of working in their chosen field (but not eligible for a disability support pension), will be paid the Newstart allowance – about $579.30 a fortnight at today’s rates for a single person after nine continuous months on income support, and dependent on assets.
They may be able to draw on superannuation but will risk exhausting this funding by the time they become eligible for a pension, leaving them solely reliant on the welfare payment.
In some circumstances money taken out of superannuation for day-to-day living may also be considered an asset.
The move to age 70 pension eligibility has remained on the Coalition’s books since the 2014 budget, despite other unpopular measures being axed. It is opposed by Labor. “How does [Prime Minister>[/embedp>
Council on the Ageing chief executive Ian Yates said while not opposed in principle to the age increase, any move to eligibility at age 70 would have to be accompanied by:
- A substantial increase in rental assistance;
- No change to eligibility for disability support pension that is available to people under age pension age;
- A significant increase in Newstart allowance – more than a third of the long-term unemployed are mature age;
- Major government action against age discrimination in the workforce and workplace;
- An increase in measures to help older workers avoid unemployment and rejoin the workforce if made redundant;
- An increase in the superannuation preservation age to at least 65 to strengthen the retirement income system (with exemptions on the grounds of hardship).
Changes make system fairer: department
A statement from the Department of Social Services said the changes would make the pension system fairer, better targeted and sustainable for the future.
“Those below qualification age who are unable to support themselves fully financially are supported by Australia’s social security safety net, if they meet the relevant eligibility criteria,” it said.
“Currently, 4.5 people of working age support every person aged 65 years and over. This will drop to 2.7 people by 2054-55.”
