The Budget confirmed the Treasurer’s earlier announcement that the Government would raise the eligibility age for the Age Pension to 70 by 2035.
The Government announced that, from 1 July 2025, the Age Pension qualifying age will continue to rise by 6 months every 2 years, from the qualifying age of 67 years that will apply by that time, to gradually reach a qualifying age of 70 years by 1 July 2035. People born before 1 July 1958 will not be affected by this measure.
This measure has a long implementation timeframe to allow people who would be affected to consider their retirement income arrangements. (Source: Budget Paper No 2 [p 202])
Mr Hockey said the Government was focused on “what is deliverable and achievable [sustainable] over the medium and long term and one area that needs to be properly addressed is the eligibility for the Age Pension”. He said the Age Pension expenditure today ($39bn a year, and growing rapidly) is currently more than Australia spends on defence. Mr Hockey said that when Labor increased the Age Pension age to 67 by 2023, the Coalition gave them bi-partisan support. He said “when we introduce legislation to increase it to 70 by July 2035, 2035 that’s when it will go to 70, we expect that there will be bi-partisan support”.
However, it is understood that the Opposition, the Greens and Clive Palmer are all opposed to the increase in the pension age. The negotiation of that measure through the Senate could therefore be quite “tricky”, despite Mr Hockey’s call for bi-partisan support.
[WTB 20, 13/5/14]