Hiking the pension age to 70 will save billions in just 4 years

Hiking the pension eligibility age to 70 will save the federal government more than $3.6 billion in just four years, The Daily Telegraph reports from new data.

Between 2025 and 2035, the age at which Aussies will be able to access the age pension will rise gradually to 70, under a budget repair measure that was announced by then-PM Tony Abbott in 2014, and that hasn’t been overturned by the current Coalition government.

As it is, the eligibility age currently sits at 65 but will change to 65 years and 6 months from July 1, and will continue to increase by six months every two years until July 1, 2023, when the eligibility age hits 67. According to the Department of Human Services’ website (DHS) on July 1, 2021, the six-month increase will begin again, rising every two years until it hits 70 on July 1, 2035.

The changes will affect anyone born after June 30, 1958.

The Daily Telegraph reports that new data released by the DHS showed that in just the four years from 2025 to 2029, the gradually increasing pension age will allow the government to bank $3.6 billion that would have otherwise been spent on welfare.

Yet, as the newspaper points out, at 2025 the age of retirement for federal politicians will still be stuck at 60.

Although John Howard scrapped MPs’ gold-plated defined benefit pension scheme for all pollies elected after October 2004, politicians are eligible for government contributions of 15.4 percent of total salary to their super – far above the 9.5 percent that employers are currently mandated to pay into workers’ super.

And MPs earn salaries that are more than two-and-a-half the size of average, full-time workers – with a starting wage of $199,040 as of December 2016 – as well as enjoying a break of almost 10 weeks per year from their duties in Canberra.

Average Aussies, meanwhile, are on track to have the oldest pension age in the developed world, when it hits 70 in 2035.