Floated increase in pension age slammed

Seniors advocacy groups, unions and social welfare bodies have rejected a proposal to link the pension age to increased life expectancy without first removing key barriers to workforce participation.

Seniors advocacy groups, unions and social welfare bodies have rejected a proposal to link the pension age to increased life expectancy without first removing key barriers to workforce participation.

Age Discrimination Commissioner Susan Ryan said increasing the pension age to 70 as flagged by the Productivity Commission would serve no social or economic purpose if older people were forced into unemployment queues or old age poverty.

She said around two million Australians over 55 were willing to work but could not find employment because of age discrimination.

Ms Ryan said workers compensation and income insurance practices and policies also worked against people over 60 who wanted to stay in paid work.

National Seniors chief executive Michael O’Neill said it was naïve to suggest that upping the pension age would boost productivity.

“Raising the pension age without providing jobs will see older Australians merely shifted from one form of welfare to another.”

He said in 2012, the over-55s represented a fifth of those out of work for two years and living on the Newstart Allowance, and more than half of those on the disability support pension were aged over 50.

The Productivity Commission report, An Ageing Australia: Preparing for the future, released on Friday said lifting the pension age to 70 would save taxpayers $150 billion over 35 years and would increase workforce participation in this age group by between 3 and 10 per cent.

While making no specific recommendations to government, the report raised areas for policy consideration.

Peter Harris, chairman of the commission, said the best time to develop policies that address the “inescapable implications of demographic change” was while the transition was in its infancy.

Downplaying positives

COTA Australia chief executive Ian Yates said the report emphasised the challenges of the ageing population without properly looking at the potential it could bring.

He said any change to the pension age would need to be in the context of a broader, whole of government approach to ageing, which included more flexible workplaces.

The Australian Council of Social Service said it was opposed to raising the pension age until allowance payments were adequate

ACOSS CEO Dr Cassandra Goldie said the gap between the Newstart Allowance and the aged pension was now $150 per week and widening.

“We see this as a necessary first step before we contemplate a further increase in the pension age that would condemn many more people to poverty in their later years.”

‘Short-term fix’

The ACTU, which also rejected the proposal, said many older workers struggled to maintain secure employment and could not keep working in physically demanding jobs well into old age.

“Ensuring workers get access to training throughout their working lives so they have the skills needed for the modern economy is an obvious place to start,” said ACTU president Ged Kearney.

Ms Kearney said the government should also reduce the superannuation tax concessions that disproportionately benefit high income earners and move as quickly as possible to compulsory 12 per cent superannuation contributions.

Businesses back higher pension age

However, the Australian Industry Group, representing 60,000 Australian businesses, said lifting the pension age was a sensible move if managed properly.

Chief executive Innes Willox said eligibility for the age pension was a disincentive to workforce participation and lifting the minimum age would help ease some of the growing pressure to increase taxation levels.

However Mr Willox agreed any move should be complemented by an increased focus on lifting workforce skills and the range of work opportunities available.

He said an increase in the eligibility age would need to be phased in slowly to reduce adverse impacts.

Equity release scheme floated

Elsewhere in the report, the Productivity Commission said a government equity release scheme targeting older households should also be investigated to help pay for the rising costs of aged care.

“Having individuals contribute even half the annual real increase in their home values towards aged care services could reduce government expenditures by around 30 per cent,” said the report.

In response to the report, four aged care industry groups have jointly called for the Prime Minister to hold a leaders’ forum to develop an action plan for the future.

As a first step, Leading Age Services Australia, Aged and Community Services Australia, Catholic Health Australia and the Aged Care Guild said the Abbott Government needed to implement the full recommendations of the 2011 Caring for Older Australians report.

Related – Opinion: Rachel Siewert, ‘Time for action on an ageing population’.

1 thought on “Floated increase in pension age slammed

  1. It is certainly a good idea to start a discussion about ageing and retirement. If older people are to be regarded as productive and valued, however you flesh out those two concepts, then the idea that you retire at, say, 60 or 65 years of age, is counter-productive and a little archaic. The downside of picking up a pension at age 60 or 65, is that being ‘a pensioner’ immediatly attracts a social diagnosis of ‘elderly’, which in a society that worships youth, carries with it all sorts of negative consequences. I see the comment about the pension age review as beginning a dialogue. We should not dismiss it out of hand as the article above seems to have done.

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