Everything you need to know about the age pension (and a few things you probably don’t)
Speaking at the start of the G20 finance ministers’ meeting in Sydney last week, the Treasurer again flagged raising the retirement age, saying longer life expectancies imposed costs – including the age pension – which may not be sustainable.
As Gen-Ys contemplate receiving a letter from the Queen and their first pension cheque on their 100th birthday, we have compiled a list of essential (and not-so-essential) facts about the age pension in Australia and around the world:
- The pension age in Australia is currently 65, and will rise to 67 by 2023.
- There are different rates of payments for singles and couples, and the calculation depends on your circumstances. The maximum basic fortnightly rate for a single person is $751.70, and for a couple $566.60 each.
- The value of your family home does not currently count towards the pension asset test if it is your ‘principal place of residence’. For details about the asset test, see here.
- The proportion of Australia’s population aged over 65 is rising sharply. The number of people aged over 65 is projected to double between 2010 and 2050, while the number of those aged over 85 is set to quadruple, according to Treasury figures.
- Liberal frontbencher Christopher Pyne this week told Sky News the Coalition would wait until its second term before upping the retirement age.
- The Roman emperor Augustus Caesar introduced what’s thought to be one of the world’s first pensions, around 13 B.C. He paid soldiers who had served 25 years a lump sum equivalent to 13 times their salary. His reasoning? The payment would make them less likely to overthrow him.
- Turkey wins the prize as the country with the lowest pension age. There, if you’ve worked for 25 years, you can clock off with a pension. So yes, you could be 45 and kicking up your heels. But not for long, analysts warn – the country’s economic woes are likely to force changes to this generous provision.
Do you think the pension needs reform? Should the age be raised? Should the assets test be tightened for some people?