Age Pension age increasing to 70 years (updated table)

Note: This article (including table) explains the Age Pension eligibility age, which has jumped by 5 years for younger Australians. If you are seeking information on the retirement age for accessing superannuation benefits see SuperGuide articles Preservation age: I’m 58. Can I withdraw my super benefits? and I’m 60. Why can’t I access my super benefits?

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 announcement by Joe Hockey is 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).

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).

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.

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.

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. Until we hear otherwise, we have to assume the Service Pension qualifying age is to remain at the current level of 60 for men, and since 1 January 2014, 60 years for women. Having made this statement, there is a strong likelihood that Service Pension age will increase over time.

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
  • Between 65 years and 70 years if you were born after June 1952 and before January. For birth dates and Age Pension ages between these two key dates, see table above for your Age Pension age.
© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. 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. Cmon – the own house should be included in the asset test for the pension –
    Otherwise this is a complete tax shelter for the wealthy (and their kids who want to be wealthy too).
    The non house owner is completely ripped off by an asset limit of only $ 150k higher.

    the easiest way to do this is increase the asset limits for the non-home owner and assume a
    value at say $1 million (or the owner can get a valuation to show its less).

    If you have a $ 1 million dollar asset earning nothing then it can be reverse mortgaged, rented etc,
    instead of hiding it and collecting the pension.

  2. What about all the people on Workers Compensation or other such work injury related insurance payments, do they continue on Workers Compensation etc until they reach their retirement age or do they have to try and access the Disability Pension or other such pension at 65 years of age. Is the Workers Compensation Agency/Insurance company going to change their current policy which stops all Workers Compensation at 65 years of age or are they going to allow the Compensation to continue on until the appropriate retirement age. Then of cause the Insurance agency will have to increase their injury compensation age and their Employer premiums, but how will they work out the premiums e.g. some workers will retire at 65, 66, 67, 68, 69 and 70. I am glad l no longer have to worry about employer premiums. It is a very sad state of affairs when people who have worked hard all their life, paid their taxes see incompetent people create such havoc or maybe its not incompetence, but rather intelligence especially if they or their family have investments in the INSURANCE COMPANY?.

  3. I work in an industry where continuing in my current role will not be physically (or mentally) sustainable after age 60-62 at best. I have been dilligent with my Super contributions over my 30 years of employment and am fortunate enough to be in a long closed State Government defined benefits Super fund. With a little more fine tuning until my preservation age of 58 I will be self sufficient in retirement from the age of 60 up until my life expectancy. Why should I be punished?. Surely if a worker receives an allocated Super pension sufficient to demonstrate a comfortable level of support unti life expectancy age then they should be entitled to access it from a reasonable preservation age such as we currently have? This “tinkering” with the access rules to what is essentially MY money (from my persoanl contributions at least) is fundamentally wrong, over simplistic in it’s rationalle and distressing for iminent retirees.

    • 27 years ago I listened to a superannuation salesman tell me how much I needed to have super and that there was not going to be any pension in the future. I decided to never put any money in super when I heard that I could not access it until retirement age. (I figured that eventually the government would want some of that money, particularly if they sent the country into spiralling debt.) Far better to buy shares or property with your own money and you can access it when you need it. I think of super as the governments money, not my money, particulary when I have no control over when I can access it.
      Tony Abbott has now proven himself to be a liar about not taxing us. He selfishly wants to introduce maternity leave for his 3 daughters, even though this country can not afford it. Why doesn’t he cut his own pension for the sale of Australia? Better still, lets eliminate all Politicians pensions. Kevin Rudd is getting a $600,000 / year pension. How can Australia afford that? Clive Palmer I will vote for you if you eliminate all parliamentary pensions! Let them live on a normal pension and only when they turn 70 years. Why are they treated so special than the rest of us? Using the same logic politicians are feeding us, I would argue to them that politicians are living longer than previous generations of politicians and there are now thousands of them compared to the small handfuls we had in the early 1900′s when parliamentary pensions were first introduced and the nation can not afford that any more!They are getting small fortunes every year funtil their death, all from the public purse. Check out Kevin Rudd’s pension on http://www.dailytelegraph.com.au/desposed-australian-prime-minister-kevin-rudds-600000-a-year-pension/story-e6freuy9-1225885918379

  4. Samantha Smith says:

    Well if you did not see this coming, then you deserve what you get. First off, governments can never be trusted. Secondly you need to understand where the government gets their money from? Taxes right? Wrong!!! Governments borrow money from the Bankers of Europe. In a Australia this institution is call the Reserve Bank of Australia and is privately owned. In Australia the government borrows money at interest from this Reserve Bank and we the people pay back the loan and the interest in the form of personal income tax. The agency responsible for this is called the Australian Tax Office. The ATO is not a government department, but a private collection agency for the Reserve Bank of Australia.
    Everyone has to pay taxes right??? And yes we do. Taxes on fuel, taxes on goods and services, taxes on health, known as the Medicare levy, taxes of luxury items and a sin tax on tobacco and alcohol among a few. But doesn’t personal income tax go to the government to provide money for the services that benefits all Australians. No, it goes to the Reserve Bank of Australia to increase their profits. To which they (RBA) neither pay any taxes or are ever audited and are beyond the legal reach of Australian law.
    Now what happens is that the governments get themselves into so much debt to the Reserve Bank, that they cannot pay it back. This is because there is only a certain amount you can draw from the people of a country before you cause the financial system to collapse. For this reason the government keeps selling off public assets, such as, rail service, telephone, buildings, postal service and so on. It is a desperate attempt to try and balance the books.
    Now here you have a big pot of money called the Superfund, it is worth billions upon billions. The government has been eyeing off this money for years, however it is not so easy for them to get their hands on for their budget, so they grab this money indirectly. What we are seeing is an indirect grab of the Superfund, forcing people to become responsible for cost of their own pensions and thus saving the government the cost of supporting an aging population.
    The financial model most people use is this; buy a house, invest in a superfund, work for an employer and invest in entertainment.
    So how is this panning out? Peoples health declines as they age, hard working and hard drinking catches up, but now they have to work until 70. They will not be able to touch the super until 70, so their only asset (if they have one) needs a second mortgage or gets sold to cover medical costs and pharmaceuticals, while doing a merry dance with Centrelink for help and support while being told to get a job. Strange about that, the same people who use to tell teenagers to get a haircut and get a job are now the ones who are told to suck it up and get work.
    A better model is to invest in your health, start your own business, it you can afford buy a home, Super funds should be last on the list. You get far more tax breaks running a business than any benefits from Super. Super you pay tax when you put in and when you draw out of the fund. However a business you can claim tax breaks. Makes more sense to invest in a viable business.
    Food for thought,
    Samantha.

    • Jo-Anne says:

      @ Samantha Smith….thank you, I did enjoy reading your comment…..though I am not much interested in starting a business at this point in time I am reminded of the quote…”at times like these we must remember there have always been times like these…” or something like that….proven by this quote in the novel David Copperfield (1850) by Charles Dickens about the life and times of a man in 1800s England.

      “My other piece of advice, Copperfield,” said Mr. Micawber, “you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery….”

      Relevant for any century, country, culture, or income wouldn’t you say…

  5. Raymond Morrison says:

    So, for the “crime” of being born 13 years later than somebody else, you have to work another 5 long years. Seems a bit rough to me!

    • Jo-Anne says:

      @ Raymond Morrison…..if you look to history the pension was promised to the diggers after the war…..and remember the average lifespan of men was 67 then…..so do the maths…..the pension was for an average of two years. When I was three the life expectancy was around 70. So to do the maths again….the average life expectancy in Australia now is close to 82…be grateful you don’t have to work till 80…life is pretty good here in Australia and all we need to do is turn on the world news every now and then to realise it.

  6. In my view Australia has two fundamental problems. Greedy banks and incompetent politicians.
    The banking industry was created to meet the need of the people. Now they only care about making a bigger profit every year. The banking and insurance industry was deregulated and this has created a group of companies that are only interested in meeting their own goals. Credit Cards should be banned and easy credit should be stopped. Banks are a blight on our society.

    Politicians should be treated the same as company CEO’s. They must be held accountable for their actions and sent to prison when found to be corrupt or have made a decision that has lead the country to economic ruin, as our present and past elected officials have done. It should be illegal for our country to be in deficit. And any politician that allows it to happen should receive twenty years goal. And the loss of all entitlements. On a final point politicians must be treated then same as all Australians. They should not be allowed to access their superannuation until their respective retirement age. The same laws must apply to all.

  7. Lyn Fabian says:

    I would imagine there will be huge numbers of older people applying for the dole as they are put off work and will be unable to find another job. They will be put through all the distressing hoops that Centrelink specialises in.

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