Scott Morrison ditches plan to raise pension age to 70, advocates delighted

"The pension age going to 70, gone," Mr Morrison told the Nine Network on Wednesday morning in response to a viewer's question.

It’s an unexpected backflip by the new Prime Minister who was previously a major supporter of the policy.

However, it has delighted seniors’ advocates and poverty action groups and raised a sigh of relief from cash-strapped older Australians facing the possibility of either staying in the workforce or, if unemployed, living on the totally inadequate Newstart allowance until they turned 70.

The proposal to raise the qualifying age for the age pension from 67 to 70 beginning in 2025, was first proposed in 2014 and remained a Coalition policy despite never being legislated.  

Earlier this year the government confirmed its commitment to the policy at a Senate estimates hearing. 

It would have left Australia with a higher retirement age than the United States, the United Kingdom, Canada and New Zealand.

Currently the legislated age at which people can access the age pension is 65.5 years. Next year this will rise to 66, then to 66.5 in 2021 and 67 in 2023.

“This is clearly a vote winner,” said Ian Henschke, chief advocate for National Seniors.

“We shouldn’t have the pension as a political football that is kicked around by political parties every four years.

“We know there are people who are fit at 65 but there are others that are just very worn out. 

“Every second voter in Australia is now over 50 and being told they might have to work past 67 was not well received.

“Raising the retirement age to 70 flew in the face of widespread discrimination against older people in the workplace.

“Even workers as young as 50 find it hard to secure work if they lose their job through redundancy or for some other reason,” Mr Henschke said.

“People who are involved in manual or physically demanding jobs are often not capable of working until they are 70. Imagine being construction worker, labourer or a nurse and being told you’re not eligible for a pension.”

“We know many older workers end up on Newstart because they just can’t get a job. In fact, 25 per cent of people on Newstart are aged over 55 and unemployed Australians aged 10 to 64 are on unemployment benefit, on average, almost twice as long as those aged 25 to 29. 

Mr Henschke said National Seniors believed the whole retirement and pension system needed to be reviewed and was lobbying for an independent tribunal to set the pension rate.

“We are a rich country and we shouldn’t have old people living in poverty.” 

Paul Versteege from Combined Pensioners and Superannuants Association also welcomed the announcement.

“Many of the 100,000 people over 50 who are on Newstart and have no real chance to ever work again now at least know they won’t have to wait an extra three years for the age pension.

“The logical next step for the Government to take would be to increase the Newstart Allowance. It was designed for people who were temporarily out of work, not permanently. The inadequacy of Newstart is not disputed. We need to see action.” he said.

Ian Yates from Council on the Ageing said the decision was “sensible”. 

“There is no point in raising the pension age further when people who want to work longer are too often locked out of even being considered for jobs because of persistent ageism and age discrimination.

“Forcing older jobseekers to wait another three years struggling on Newstart before accessing the aged pension, because we have an employment system that is stacked against older workers, is not fair or sensible, and many do not even access Newstart because of the draconian means testing requirements.”

Mr Yates said government needed to focus on lifting workforce participation rates substantially among people older than 55 and supporting people who wanted to work into their 70s.

Talking about the policy U-turn deputy Prime Minister Michael McCormack said Mr Morrison had discussed the policy with his cabinet colleagues and expected cabinet to formally agree to the decision at a meeting next week.

Mr McCormack said people who worked in physically demanding jobs would appreciate the move.

"You don't want some suit in Canberra telling you you've got to work until you're 70," Mr McCormack told Sky News.