The Financial Services Council (FSC) has called on the Federal Government to consider whether the income and asset tests for the Age Pension are too generous and whether the long-term cost of the pension is sustainable. It is 2014-15 Federal Budget submission, the FSC says it is concerned that the stability of the retirement system is being undermined by loose eligibility rules that allow Australians with substantial assets to receive pension payments.

John Brogden, CEO of the FSC said: “A couple with one million dollars in assets and an annual income of $60,000 are eligible to receive a part pension.” He said it was time to assess whether this is an appropriate spend of government funds.

The FSC has also recommended increasing the preservation age for accessing superannuation payments from 60 to 62 years to reduce the gap for Age Pension eligibility from 7 to 5 years.

Source: FSC release, 10 February 2014

[LTN 27, 11/2/14]