Work till you drop?

7 May 2014

Would increasing the pension age be fair and effective?

AT AN ANNUAL cost of around $40 billion, the age pension is the federal government’s largest single social security program, and age pensioners account for around half of all Australians receiving social security benefits. So it’s not surprising that the speculation about cuts in welfare spending has focused on this payment, and specifically on the possibility that the qualifying age could age rise to seventy and that future increases in pension rates might be linked to prices rather than wages.

The treasurer, Joe Hockey, has argued that the pension age “was set at that level in Australia in 1908 when life expectancy was fifty-five… Now life expectancy is eighty-five and as of today, it’s still pension age sixty-five.” But would raising the pension age be fair – and, just as importantly, would it be a practical and effective means of meeting current and future budget challenges?

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