Australia plans to push age of retirement to 70
May 3, 2014, 12:02 am TWN
SYDNEY -- The Australian government said Friday that it wants to lift the pension entitlement age to 70 — the highest in the developed world — by the year 2035 to help cope with an ageing population.
Treasurer Joe Hockey said the previous Labor government planned to raise the age from 65 to 67 in 2023 and the new administration of conservative Prime Minister Tony Abbott wanted to take it further by 2035.
“Increasing the pension entitlement age to 70, we are intending for that to occur in 21 years' time,” said Hockey, who is due to hand down his first national budget on May 13.
Australia has no statutory retirement age but men have been entitled to the pension at age 65 and women at 60 since it was introduced in 1908.
While no members of the OECD group of rich countries yet have an official retirement age as high as 70, the effective age for men in Japan and South Korea is close to this despite an official retirement age of 60, a recent report by the Organisation for Economic Co-operation and Development said.
Hockey said any Australians getting the pension now would not be affected but he stressed the government's view that the “age of entitlement” was over.
“It is hugely important we have long-term planning out of this budget,” he said.
Australia has for years grappled with how to plan for its ageing population, and in 2009 the former government said it would gradually push back the age at which people could claim the state pension to defuse a “demographic time bomb.”
Over the next 30 years, the number of Australians aged 65 or over will double from 3.5 million to 7.0 million, accounting for 22 percent of the population, the Actuaries Institute of Australia has forecast.
Meanwhile the number of those aged over 85 will almost triple from under 0.5 million to 1.4 million people in that time, placing pressure on the health system, it said.
Australia currently has a population of 23.4 million, and the life expectancy at birth is 79 for males and 84 for females, according to official Australian Bureau of Statistics figures.