Slogging on until you're 70?
Date
April 20, 2014
Crook knees: Labourer Paul Midson reckons he will be lucky to work beyond 60.
Signs are we all may have to work longer: The Abbott government looks as though it's moving to tighten access to the age pension and increase the pension qualifying age to 70 when it delivers the budget on May 13.
Treasurer Joe Hockey has been giving speeches about the need for people to work for longer as the population ages.
The age pension age is already increasing to 67 by 2023, from 65 now for men and a little earlier for women born before 1949. Anyone born from January 1957 has a qualifying age of 67.
An increase to age 70 would also be phased in, to a date beyond 2023.
But the problem with a higher pension age is that many workers with physically demanding jobs will not be working to 70.
Paul Midson has worked for about 20 years as a builder's labourer. The 48-year-old has ''crook'' knees and shoulders. He has had operations on his knees. He works at least 60 hours a week, often longer.
''I reckon I will be lucky to last [in work] to 60,'' he says. Midson is fortunate. He has been employed by the same construction firm for the past 15 years in an industry where much of the work is casual and short-term. He has some superannuation but far from enough to fund a comfortable retirement.
He is relying on the age pension and is opposed to the pension age rising further.
With a higher pension age, more workers who are not medically fit to work will have to rely on the disability support pension until qualifying for the age pension. But those who lose their jobs and are still fit enough to work will have to fall back on the dole. And the Newstart allowance - unemployment benefits - pays much less than the disability support pension and the single age pension.
Dave Noonan, construction and general national secretary of the construction and mining union, the CFMEU, says few construction workers are going to be able to work until 70. ''There may be a handful, but what we find is even if they are ready and willing to do so, construction workers past 50 find it much harder to gain and retain employment.''
Research by the Australian Centre for Financial Studies, commissioned by the Australian Institute of Superannuation Trustees, shows those working in community and personal services, in clerical and administrative roles, sales workers and labourers are up to 50 per cent more likely to retire before the age of 60 than professional workers.
Michael Rice, an actuary and chief executive of superannuation research firm Rice Warner, supports raising the pension age to 70 but reckons the age pension also needs to be better targeted to make the system fairer.
He points out that a partial age pension is payable for home-owning couples with incomes close to $65,000 a year who have more than $1 million in savings. Even if retirees qualify for a few dollars of the age pension each fortnight, they receive all of the pensioner discounts. These range from discounts on utilities bills and telephone rates to cheaper pharmaceuticals, and are likely to be worth thousands of dollars a year to most retiree couples.
The family home is exempt from the age pension assets test. Rice says the government should consider limiting the exemption on the family home. ''The exemption from means testing discourages many retirees from downsizing their home to release capital,'' he says.
The exemption could be limited to the first $1 million of the value of the family home, Rice suggests. A 65-year-old retiree couple could be living in a $3 million house and collect the full age pension. Assuming their life expectancy at age 65, the couple would receive about $700,000 in age pension. When they die, the house would pass to the children tax-free and the government would not receive any of the $700,000 back, he says.
Read more: http://www.theage.com.au/money/saving/slogging-on-until-youre-70-20140419-36xox.html#ixzz3NYafzG5X
Forum
Pages: 
Waiting Longer For The Aged Pension (Read 15196 times)
