Age Pension age increasing to 70 years (updated table)

Note: This article explains the current Age Pension rules, which are applicable until at least December 2016. If you are seeking information on the proposed changes to the Age Pension rules announced in the 2015 Federal Budget, and taking effect from January 2017 (subject to legislation, and assuming the Liberal party wins the next election) , then see the SuperGuide article 300,000 retired Australians to lose some or all Age Pension entitlements.

Note: This article (including table) explains the Age Pension eligibility age, which jumps by 5 years for younger Australians, subject to legislation. If you are seeking information on the retirement age for accessing superannuation benefits see SuperGuide article Accessing super: What is my preservation age?

In May 2014, the federal treasurer Joe Hockey announced that the Age Pension age will increase to age 70 by year 2035, and confirmed this fact in the 2014 Federal Budget. The Age Pension age is the age at which you can claim the Age Pension.

What this means in practical terms is that those born after 1965 can only claim the Age Pension from the age of 70. Anyone born before July 1952 has an Age Pension age of 65 (or if a woman, younger than 65 in some circumstances). Anyone born after June 1952 but before January 1966 will have an Age Pension age somewhere between age 65 and age 70. See table later in the article to find out your Age Pension age.

The minority political party, Palmer United, has the balance of power in the Senate and claims it will not be passing the legislation that increases the Age Pension age, and other measures (that is the Social Security and Other Legislation Amendment (2014 Budget Measures No 2) Bill 2014). The federal government’s proposed changes are more aggressive than the recommendation made by the National Commission of Audit (click on link for retirement-related recommendations of NCOA). The NCOA recommended that the Age Pension age increase to age 70 by 2053, while Hockey has announced it will increase by 2035. (At the time of the NCOA report release, I mused if 2053 was a typo in the NCOA report).

Assuming the legislation passes this year or next year, in 21 years’ time (by 2035), those Australians born after 1965 will be eligible for the Age Pension when they reach the age of 70. If you were born in the year 1965 however, then your Age Pension age is 69.5 years (see table below for more details).

How does the Age Pension age increase affect those retiring within the next 5 years?

For the majority of Australians, the Age Pension will remain an important component of any retirement plan, even when an individual has substantial superannuation and non-superannuation savings.

Around 80% of Australians who have reached Age Pension age currently receive a full or part Age Pension. Some couples who hold more than a $1 million in assets (in addition to the family home) are currently eligible for a part Age Pension.

Australians retiring today can access the Age Pension at age 65 (for men) and since July 2013, from age 65 for women. The Age Pension age for women used to be 60 years but has steadily increased to 65 years, in line with the Age Pension age for men.

Note: The Age Pension age will then remain at 65 for anyone born before July 1952, and will then steadily increase by six months every two years, until it reaches 70 in 2035.

Another broken promise by the Government

Note that prior to the September 2013 Federal Election, the Liberals publicly stated they had no intention of pushing the Age Pension age to 70 years. It seems that pre-election promises count for nothing. The government has since announced that the Age Pension age will increase to 70, and confirmed this fact in the 2014 Federal Budget.

The Government’s backtracking on election promises was also partly triggered by a Productivity Commission report, as well as Australia’s longevity demographics. In late November 2013, the Productivity Commission released a report about the ageing population of Australia and recommended the Age Pension age increase to 70 years. A word of warning: this same report also recommended that retired home-owners should be forced to access the equity in their home to pay for health costs!

Age Pension age already increasing to 67 years

As previously announced by the previous Labor government, the Age Pension age was already gradually increasing to age 67, but only for those born after a certain date (see table below).

Depending on your date of birth, your Age Pension age may remain at 65 or it could increase to 66 or 67, or 68, or 69 or 70 years, or somewhere in between. You can find out your Age Pension age later in this article.

Just for the record, in my view, suggesting raising the Age Pension age further while ignoring that mature age employees struggle to obtain work, and many Australians are not physically able to work full-time until age 70 or even until late-60s, is a simplistic solution to a more complex social issue. I provide a more detailed opinion on this issue at the end of this article.

Lift in Age Pension age for those born after June 1952

Five years ago, in the May 2009 Federal Budget, the Government announced that the Age Pension age is set to increase to 67 years of age from 2023. Until recently, this major change had disappeared from the front pages of newspapers. It should remain ‘top of mind’ for most Australians thinking about retirement.

This year, in early May 2014 and confirmed on 13 May 2015 in the 2014 Federal Budget, the Age Pension age will increase to 70 years of age from 2035, subject to legislation, which at the moment will have difficulty in the Senate.

The lift in Age Pension age applies to all Australians born after June 1952. Your retirement planning will be affected if you were born after June 1952, and you’re expecting to receive a part or full Age Pension on retirement.

Gradual increase in Age Pension age from 2017

The first shift upwards in Age Pension age will occur in 2017 when the eligibility age increases to 65.5 years, and then in six-month increments every two years, until it reaches the age of 67 in 2023 (see table below).

The Age Pension age will continue to increase in six-month increments every two years until Age Pension age reaches 70 years from 1 July 2035 (see table below).

Note: I am not aware that the Government has made any announcement about the Service Pension age for the benefits paid to veterans, although it is generally always 5 years earlier than the Age Pension age. I assume that the Service Pension age will also gradually increase in line with the Age Pension age, but I will confirm when I have a statement from the government. Currently, the Service Pension qualifying age is 60 for men, and since 1 July 2013, 60 years for women.

Why is the Government increasing the Age Pension age?

The increase to the Age Pension age was debated several years ago by the former Liberal Howard Government but shelved due to its political sensitivity. The arguments that the former Labor Government used to justify the increase in eligibility age for the Age Pension to 67 years were:

  • Age Pension age has not increased above 65 years since its inception in 1909.
  • When the Age Pension was introduced, a male retiring at age 65 spent, on average, 11 years in retirement. At that time, around half of the male population reached retirement age.
  • Today over 85 per cent of the male population reaches retirement age and then can expect to spend, on average, more than 19 years in retirement.
  • This change is consistent with international trends: The United States, Germany, Iceland, Norway and Denmark currently have, or are moving towards, retirement ages of 67. The United Kingdom is increasing the Age Pension age to 68.

I explain the context for this fundamental shift in retirement incomes policy in more detail in the 2011 SuperGuide article Retirement: Can Australia afford to support your lifestyle?

What is your Age Pension age?

If you were born before July 1952 then your Age Pension age is 65 years (and younger for women born before 1949).

If you were born after June 1952, then your Age Pension age depends on your specific date of birth. See table below to discover your Age Pension age.

What is your Age Pension age?
Commencement date Age Pension age Affects people born
65 Born before July 1952
From 1 July 2017 65.5 From 1 July 1952 to 31 December 1953
From 1 July 2019 66 From 1 January 1954 to 30 June 1955
From 1 July 2021 66.5 From 1 July 1955 to 31 December 1956
From 1 July 2023 67 From 1 January 1957 to 30 June 1958
From 1 July 2025 67.5 From 1 July 1958 to 31 December 1959
From 1 July 2027 68 From 1 January 1960 to 30 June 1961
From 1 July 2029 68.5 From 1 July 1961 to 31 December 1962
From 1 July 2031 69 From 1 January 1963 to 30 June 1964
From 1 July 2033 69.5 From 1 July 1964 to 30 December 1965
From 1 July 2035 70 From 1 January 1966 onwards

Source: Table is the copyright of Trish Power and cannot be reproduced without express permission of SuperGuide and Trish Power. Table created from media transcripts, 2014 Federal Budget and some information published on Centrelink website (www.centrelink.gov.au).

Simplistic solutions distract from ageing population issues

Lifting the Age Pension age further, beyond age 67, causes unnecessary anxiety for our older workers, while ignoring that mature age employees struggle to obtain work, and many Australians are not physically able to work full-time until age 70. The recent suggestions contained in the Productivity Commission report, are simplistic solutions to a more complex social issue.

Further, increasing the Age Pension age won’t resolve the issue of rising health costs, which is a greater budgetary cost, and a greater problem than Age Pension costs. Making such announcements without offering supporting policies to transition older workers into a new world of working longer in meaningful employment is close to reckless by the Federal Government, and by the organisations making these suggestions. It also causes unnecessary anxiety for a generation (particularly for women) who have not had access to superannuation for much of their working lives. In the case of older women, many have not had access to an income (or worked when women were paid only half of what mean earned). Many more women have had limited work experience for much of their lives, due to raising families.

In a related matter, an Australian think tank, the Grattan Institute, has come up with another simplistic suggestion that the government should raise the preservation age (age at which you can access your super), and the Age Pension age to 70 years, to balance the budget. The same think tank reckons your family home should not be exempt from the Age Pension assets test – not sure where they think Australia’s retirees are supposed to live. Why do economists (I confess to also holding such a qualification) so often treat the family home solely as an economic asset, notwithstanding there may be a minority of Age Pensioners who live in million-dollar homes while accessing the Age Pension.

Note that the National Commission of Audit has recommended increasing preservation age (age that you can access your super) to 62 years rather than 60 years, and eventually increasing it to 65 years, so it follows the increase in the Age Pension age, but 5 years’ earlier.

Talk about picking the low-hanging fruit. What about offering some insights into flexible workplaces for parents and older workers, and carers? Purely economic solutions are pointless without providing the infrastructure and social support necessary for fundamental economic and social change. Yes, we are living longer. If those longer lives are healthier, then, in most cases those healthier lives are due to life-saving heart and blood medication, joint replacements, transplants, and cancer treatments and other procedures. Perhaps we need to work out ways to tackle the rising costs of health care, and budget for them, while ensuring that we develop solutions that are acceptable for the Australian population – both young and old. I want our older generation to be able to afford quality healthcare, as well as to be able to live comfortably.

Feel free to offer your views in the comments section at the end of the article. Anyway, back to retirement planning…

In summary, your Age Pension age is:

  • 65 years if you were born before July 1952
  • 70 years if you were born after 1965 (subject to legislation)
  • Between 65 years and 70 years if you were born after June 1952 and before January (subject to legislation). For birth dates and Age Pension ages between these two key dates, see table above for your Age Pension age.

Age Pension ages if proposed legislation is not passed…

If the federal government cannot get the increase in maximum Age Pension age from 67 to 70, then the current Age Pension age rules apply. The current Age Pension rules are set out in the table below.

What is your Age Pension age?
Commencement date Age Pension age Affects people born
65 Born before July 1952
From 1 July 2017 65.5 From 1 July 1952 to 31 December 1953
From 1 July 2019 66 From 1 January 1954 to 30 June 1955
From 1 July 2021 66.5 From 1 July 1955 to 31 December 1956
From 1 July 2023 67 On or after 1 January 1957

Source: Adapted from information on Centrelink section of DHS website.


IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. No matter how much political correctness is thrown around the outcome is still the same for anyone over 50. It’s really difficult to show how much experience you have on a resume when you have to leave off a good portion of your working life to appear as a much younger person. To dare to be brave and actually show your entire work history is madness as the 20 or 30 year old looking at your resume would instantly bin it. Anyone 60 and older is expected to drop off the perch and give up their job anyway so it all seems ridiculous.
    Being over 50 it’s difficult to get an interview. One time I was lucky and got an interview and the job but was treated like dirt. The owner would come in and ask me if my heart was ok because he didnt want me having a heart attack at work. When the pornography started appearing on my computer and I complained to the manager the treatment got worse and I actually put up with it because I didnt want to get into trouble from Centrelink for leaving a job. Eventually I was fired and I can honestly say after first being upset for not having a job I was elated because I no longer had to work somewhere I was not respected.

  2. I agree with Sam. I have worked very hard for 40 years paid my taxes and have to wait till 66 to receive some pension. why is that people who came in the 70’s from overseas returned to their country after they received their australian passport. Worked for 25 years in their own country and have returned to Australia age 65 to receive Australia pension and public hospital services. Never contribute to paying taxes. How is this fair? What is the government going to do?

  3. Mimi Nguyen says:

    My dad is always on my back about my income. He is so adamant that I must always take the right steps to prepare for retirement. I am only 24! Retirement is a long way away for me. But with the state of the government, and the new policies being outlined within the Intergenerational Report (IGR) I can understand why he would be feeling this way. I imagine the effects of the increased retirement age have touched the lives of millions of Australian families. The IGR fails to take into account the fact that many Australian families are multigenerational families, with each generation working to support each other financially; any policy that affects one generation within a household affects everyone in that family (Bainbridge, 2015).

    The content within the 2015 Intergenerational Report and the media surrounding it, are such a misrepresentation of the financial hardships of working Australian families (Kelly, 2015). The current government has continued to stubbornly push their unpopular political agenda; in their sad effort to pull the wool over the eyes of working Australians. A large part of the IGR talks about the aging population and the implication it will have on the age that workers go into retirement. A proposal in the IGR explains that pension eligibility is set to move from 65 to 70 by 2035 (Commonwealth of Australia, 2015, p. 18). Much of the reasoning is based in the notion that the life expectancy of the average Australian is increasing, with the male life span increasing from 91.5 to 95.1 and the female lifespan increasing from 93.6 to 96.6 in 2055 (Commonwealth of Australia, 2015, p. 5).

    But does this relatively small increase in life expectancy really justify the retirement age pushed to 70? Coming to the end of their life, the proposed policy does not provide many options for those who, for no fault of their own, cannot physically continue working. Regardless of the increase in life span, the quality of life, and function of those in their twilight years are much more limited towards the end of life (Glenday, 2015).

    The IGR outlines that technology will drastically affect our way of living and the way that we perform work. In a presentation given by the treasurer about the IGR, Joe Hockey stated “I urge people to go and do an internet search of driverless cars. There is credible evidence that suggests that by 2040 three-quarters of the cars on the road will be driverless” (Martin & Massola, 2015). He went on to explain how automation and the advent of technology would work to drastically affect our production. However, with the aging population, there is danger that this mentality will only create a situation where older, less physically able workers are marginalised in favour of much more efficient automated practices – creating a situation where, like in my own family, older generations are fearful to change their vocation to go into a job market where their skills are obsolete (Glenday, 2015; Martin & Massola, 2015).

    Every fortnight the government takes a percentage Super Guarantee from my pay check in order to prepare for my retirement. Meanwhile, almost at the age of retirement themselves, my parents struggle to physically hold on as they are not able to receive the pension and yet, cannot afford to quit. This creates a compound problem as the younger generation works to support their parents by living at home and caring for the elderly, thus draining funds that would otherwise go towards building the next generation. All of this together creates a very difficult situation where one generation in the house will have to suffer in order to support the other (Bainbridge, 2015; Kelly, 2015).

    The 2015 Intergenerational Report fails to consider this compound problem raised when the proposed policies are applied to multigenerational families. If there is an answer to our money problems within the family, it does not lie with the traditional forms of investment.

    Word count: 523
    References
    Bainbridge, A. (2015, March 14). Intergenerational Report a dishonest weapon of the 1%. Retrieved March 17, 2015 from https://www.greenleft.org.au/node/58518
    Commonwealth of Australia. (2015). Intergenerational Report 2015: Australia in 2055, The Treasury: Canberra. Retrieved from http://www.treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2015/2015%20Intergenerational%20Report/Downloads/PDF/04_Chapter_1.ashx
    Glenday, J. (2015, March 5). Intergenerational Report: Older Australians and women need to be encouraged to work more. Retrieved March 20, 2015 from http://www.abc.net.au/news/2015-03-05/intergenerational-report-to-be-released/6281598
    Kelly, E. (2015, March 5). Intergenerational Report predicts long, hardworking life for Canberra baby Edgar. Retrieved March 20, 2015 from http://www.canberratimes.com.au/act-news/intergenerational-report-predicts-long-hardworking-life-for-canberra-baby-edgar-20150305-13w53c.html
    Martin, P. & Massola, J. (2015, March 7). Intergenerational report: Grey army marches to our rescue. Retrieved March 24, 2015 from http://www.smh.com.au/federal-politics/political-news/intergenerational-report-grey-army-marches-to-our-rescue-20150306-13wn0y.html

  4. I have worked most of my life. I am a female 60 years of age. I have paid my taxes. Why do I have to work til I’m 66 before I receive any pension. There are so many young people looking for work but can’t find any. They are being paid the dole. Why cant we, who have worked so hard all our lives give these young ones our jobs so that we can retire and enjoy the rest of our lives and our grandchildren before we die.

    • Yes the government is looking at the wrong end of the pole, I agreed with you once these young people start late to find a job they end up lazy for not having early training to work and they need more money than the older ones do such as buying stuff for a home and holidays, new family’s etc. The older ones is health and get very tired and worn out needed holidays and time in their life due to slowness only about one percent probably lucky to able to race around like a twenty yr old geez I am not impressed with these government are cutting right across the board to have less staff work underpaid and overwork with out butt on fire not funny these days so un real I wished these pollies would cut their priveleges of their gold cards and free plane trips 5 in a year its discusting

  5. Dole O'Dole says:

    Well I am 50 years old and have been doing the Centrelink hokey pokey for 3 years and guess what ?? I can’t get employment. I have all the training and experience to do Office Admin work but they all say no thanks we want younger worker. Thanks Mr Abbot you have made the next 20 years for me look like hell.
    Older workers are not wanted in this country … unless you have a dirty rag and spray bottle to wash car windows.

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