The Federal Government’s contentious plan to lift the Age Pension eligibility age to 70 has been jettisoned, with Prime Minister Scott Morrison announcing this morning that he will ask Cabinet next week to reverse the policy.
The official retirement age will remain at 67.
“The pension age going to 70, gone,” Mr Morrison told the Nine Network on Wednesday morning.
“Next week, Cabinet will be ratifying a decision to reverse taking the retirement age to 70. It will remain at 67... I don't think we need that measure any longer when it comes to raising the pension age.”
The decision to lift the official retirement age was made by the Abbott Government in the 2014-15 Federal Budget.
At the 2018 Federal Budget briefing in Canberra in May, YourLifeChoices asked then Treasurer Morrison whether the ‘zombie’ measure to raise the Age Pension age to 70 by 2035 was still on the table. He was reluctant to respond, instead highlighting the provision of residential aged-care places and home-care packages. When the question was repeated, he said: “Yes, this is still government policy.”
Under the 2014 proposal, the qualifying age for the Age Pension was to be lifted by six months every two years until it reached 70 in 2035.
It was estimated that the move would save the budget about $3.6 billion in the first four years.
Deputy Prime Minister Michael McCormack said on Sky News today that Mr Morrison had discussed the policy with his Cabinet colleagues.
He said people who worked in physically demanding jobs would appreciate the move, adding: “You don't want some suit in Canberra telling you you've got to work until you're 70.”
Labor Shadow Minister for Families and Social Services Jenny Macklin exclusively told YourLifeChoices in April: “We are strongly opposed to this (zombie legislation). It is unfair. There is evidence that it would be harsh, particularly on those with difficult physical jobs, farmers, builders, nurses.
“The proposal is very unfair as low-income people already have a lower life expectancy.”
YourLifeChoices members have been vocal in their opposition to lifting the retirement age. Our Insights Survey 2018 revealed that only 7.8 per cent of members worked until they were 70 or older before hanging up their hats. More than three-quarters, or 76 per cent, had retired by the time they reached 65. The remaining 16 per cent were between the ages of 66 and 69 when they stopped working.
In YourLifeChoices’ June Retirement Affordability Index™, Emma Dawson, executive director of Per Capita, said that lifting the retirement age would bring significant problems.
“Many … citizens are already struggling to survive on Newstart while they wait to reach the retirement age and access the Age Pension. Lifting the pension age to 70 will add five more years to the wait for such citizens and drastically increase the likelihood they will enter retirement in poverty,” she said.
ACTU assistant secretary Scott Connolly said told YourLifeChoices that a dignified retirement was a goal that was slipping away for many.
“In America, people in their 70s work in hospitality and retail, rather than enjoy their retirement,” he said. “We will not accept the further Americanisation of our industrial landscape, and we will not accept working people shouldering an unfair burden when the big banks and multinational corporations are being (promised) … tax cuts.”
What does the change in policy mean for you? Had you already made plans based on the intended lifting of the retirement age?
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