Age Pension system ‘failing’ nine in 10 retirees

sad woman worried about age pension

Almost nine in 10 retirees (88 per cent) are dissatisfied with their Age Pension experience, according to new research.

The Retirement Reality: Advice and the Age Pension whitepaper reports that 83 per cent of those surveyed found the Age Pension complicated and 77 per cent were willing to pay up to $1000 for personalised advice.

An overwhelming number – 74 per cent of women and 67 per cent of men – say that support should be provided by their superannuation fund.

The data was collected by Link Group in partnership with Retirement Essentials. It aimed to assess the retirement needs of almost 1000 Australians aged 65 to 75 who had applied for the pension or were close to being eligible.

Read: Super funds get to work to maximise your retirement income

Maximising Centrelink entitlements and retirement income was the biggest concern for more than half of the respondents.

The second biggest concern was how to best manage superannuation in retirement.

“Retirees are clearly concerned about missing out and fear not being able to sustain themselves into old age,” the paper says. “Solutions should focus on ensuring specific assistance around entitlements, further strengthening our insights around funds providing Age Pension support.”

The combination of assets and income tests, thresholds that change every year in line with inflation and a fear of ‘getting it wrong’ and having to pay back amounts results in too many older Australians not receiving their full entitlements.

The push to allow older Australians to work more without having their Age Pension payments reduced is also ramping up pressure on the system.

National Seniors, the National Farmers Federation, the Council of Small Business Organisations of Australia and Independent MPs Rebekha Sharkie and Dai Le  are leading the charge to change pension rules and allow retirees to work without penalty.

Read: Huge support for universal basic income

Some senior groups and economists, such as Matt Grudnoff from The Australia Institute, have long advocated a universal pension.

“At the heart of the problem is an Age Pension system that is both inadequate and hugely complex,” Mr Grudnoff wrote for YouLifeChoices.

“But there is a solution – a universal age pension.

“The main advantage of a universal age pension is that the whole system becomes simpler. It reduces the cost of administration to both the government and to retirees. No more having to work out if you’re eligible for a pension or part pension. No more asset or income tests.”

As one YourLifeChoices member put it: “New Zealand has a universal pension and pensioners can earn money but then put in tax returns like every other worker … It works like a dream.”

Since the federal government’s Retirement Income Covenant (RIC) took effect last month, superannuation funds are now obliged to provide more support and advice for members. Funds must offer strategies that better help retirees and not just those in the accumulation phase.

Read: New legislation aims to allow pensioners to work more

The Link Group research also highlights another challenge – the decline in the number of financial advisers whose ranks have dropped 30 per cent since 2018.

“We saw a mass exodus of advisers due to extensive regulatory changes. Not only have fewer new advisers joined the industry since, but the price of personal financial advice has risen substantially over the past two years,” the paper says. “As noted in ASIC Report 627,1 it is no surprise that consumers consider advice to be too expensive.”

Link Advice general manager Duncan McPherson says the challenges in navigating the Age Pension application process can cost retirees dearly, potentially decreasing their quality of life going into retirement.

“What is positive is that seven out of 10 retirees want their super fund to provide more retirement and Age Pension support,” he says in the Financial Standard.

Retirement Essentials director Jeremy Duffield said that with a long retirement horizon and no backpay on the Age Pension, retirees could not afford to miss out on benefits.

“That’s why we think it’s so important for super funds to offer help and education about the Age Pension while keeping member needs front of mind,” Mr Duffield said.

What is your opinion on the Age Pension application process? Would you like it to be simplified? Should super funds be able to offer you free support and advice about the Age Pension? Why not share your thoughts in the comments section below?

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Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.


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  1. Is not a question of the system beeing complicated because if we spend a bit of time and read all the stuff in the internet we should start understanding the process and if anything not clear to call or go to Centerlink ans request an explanation in detail like I did and now I do understand al ldetails and follow the rules that way I have no problems and do not need to go to Centrelink or receive any letters about any issues exept the news when major changes occur ….. The real problem with the pension is the value we get every forthnigth and that is way out from the real cost of living that has increase everywhere in the world I beleive that a Universal pension will be the best for all of us either living in Australia or not. If you do not have access to internet use the machines in Centrelink or write your questions and go ….. but you have to be patience Centrelink is not going to serve you immidiately you must allocate a full day to clear all questions you have …………take lunch and drink with you and be patience or maybe go very early that way you are at the top of the list ……… Good luck

    Note: The system has many rules and yes may be complicate for some but Centrelink is there to serve you …..

    • If only all Centrelink staff told you the same thing. Sadly, like all organizations, some of their staff are less than competent and I’ve had to go through the process numerous times to get issues resolved. Okay if you are a simple case, but not everyone is.

    • yes and how you get served by centrelink depends who you get to talk with.
      some of them will happily do all they can to help, and some treat you like you dont deserve it.

  2. What we desperately need here in Australia is a universal pension for all Australians, politicians included. By simply dropping the ex-politician’s exorbitant pensions in favour of the regular pension, the taxpayer would save billions.

    Along with a universal pension, this payment needs to be tax-free instead of the current tax rate on pensions when you add the individual’s earnings to the pension.

    Income tax should ONLY be paid on the earned income, not the pension as well, and there should be no limit on the amount a pensioner can earn over and above their pension.

  3. Many older Australian people did not have enough years under compulsory super to create a realistic pension. It doesn’t matter what the reason, but for many, the original OAP is their only hope of survival.

    I believe we should have a Universal aged pension and the taxation rate should be set so that if that is all you get, you don’t pay tax just like in NZ and Canada. However if you earn above the threshold, the ATO will help collect taxes on the extra. We wouldn’t need the CES imposing ridiculous means tests and asset tests that do nothing but cost the country money.

    There is no reason why a country like Australia should be polarized with an us versus them society. It won’t end up well in the short-term, but I guess in the long-term, nature and the aging process will sort it out. Then we’ll see the same arguments from younger people, whose careers have not resulted in a high retirement fund, even if they have simultaneously held multiple jobs.

    I also believe every job should make a super contribution, not just those paying above a set amount. It is this dodge that lets companies avoid paying their dues by limiting the hours one can work. As an older Australian, I was holding 3 part time jobs and every one of them limited the hours I could work to avoid having to make super contributions. Just a way of perpetuating the problem!

    And then if you do earn above the threshold, CES deducts 50c for every dollar you earn, ignoring any costs you may have in working, so can actually leave you worse off.

  4. the claim about how the pension is ” indexed” etc, is absolute bullshit.
    the pension does not go anywhere near the cost of living.
    and whoever expects us to believe it does, needs to try and live on it.

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