RAISING the pension age from 65 to 67 will have limited impact on older workers' employment rates due to the high number of Australians who leave the workforce in their 50s and early 60s and receive a disability pension or other government payment, a leading economist says.

Bob Gregory, professor of economics at the Australian National University, says 90 per cent of single people who take up the age pension at 65 had previously received another payment - the disability pension, carer payment or Newstart Allowance, on average for six years.

A high proportion of married couples also followed this path, from dependence on a government payment in their late 50s or early 60s to reliance on the age pension, he said.
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''If I go on the disability pension at 63, I move seamlessly to the age pension at 65,'' he said. ''If eligibility for the age pension moves to 67, I just spend the extra years on the disability pension, so nothing is gained for workforce participation.''

Professor Gregory, who will address a forum today in Sydney, said policies to increase workforce participation had to start much earlier than 65.

In the past decade, there had been improvements in retention of older workers. Nevertheless it was the 55-65 age group that was moving out of the labour market.

In 2007, the average age of retirement was 59 years.

Professor Gregory said that, contrary to myth, it was the poorer Australians who left early or lost their jobs, and moved on to a payment, and the better-off who stayed on in jobs they usually liked.

Last year, the government announced that in 2017, the qualifying age for the age pension would gradually start to increase, reaching 67 for both men and women by 2023. This means men and women born on or after January 1, 1957, will not be eligible for the age pension until they are 67. Those born after July 1, 1952, will also have to wait longer than now.

Higher retirement ages are intended to moderate the long-term costs of providing age pensions to an ever-growing proportion of the population. But past efforts to reduce the numbers on the disability pension have had little success.

Roger Wilkins, principal research fellow at the Melbourne Institute, said raising the pension age to 67 was important in shifting retirement norms.

But governments were constrained in their influence over early retirement not only because people could get other payments, but because more of them would have adequate superannuation they could access at 60, or earlier for those born before 1964.

''What will matter more than pension age will be the age people can access their super, the tax treatment of super and the rules about how quickly they can deplete it,'' he said.

The Henry tax review called for the preservation age for superannuation to be aligned with the age pension age. But the government has ruled it out.

Help, I am not an energizer battery, and I want my retirement.  65 is more than enough.

wrote on Aug 19^th, 2010 at 11:26am:

Help, I am not an energizer battery, and I want my retirement.  65 is more than enough.

Do you belong to a Superannuation scheme???

imcrook doesn't work now............

just posts inane rubbish day after day

what an absolute boring life

IMO the pension age should be lowered. Who wants to work until they are 65 then spend the next few years sitting around waiting to die?

Vanessa wrote on Aug 19^th, 2010 at 5:53pm:

IMO the pension age should be lowered. Who wants to work until they are 65 then spend the next few years sitting around waiting to die?

I think it should stay the way it is. Forced retirement is a thing of the past, so they so.

We should look at returning the voting age too 21. As most under 21 have little care or understanding  politics.

Yes most defiantly, 67 is far to long.  Lower the pension age for everyone to 60.  

wrote on Aug 19^th, 2010 at 5:57pm:

Yes most defiantly, 67 is far to long.  Lower the pension age for everyone to 60.

That's the perfect age. People should a good decade or so to enjoy their retirement, go on holidays, etc. Finishing work at 67 is a little late, these people will be too long in the tooth to enjoy a good long break!

BlOoDy RiPpEr wrote on Aug 19^th, 2010 at 5:56pm:

We should look at returning the voting age too 21. As most under 21 have little care or understanding  politics.

I don't agree. I had a huge interest in politics from a young age and I was thrilled when I was able to vote for the first time, just a few weeks after my 18th birthday.

I wouldn't object to making voting voluntary for people aged 18-21, though.

Vanessa wrote on Aug 19^th, 2010 at 5:59pm:

wrote on Aug 19th, 2010 at 5:57pm: Yes most defiantly, 67 is far to long.  Lower the pension age for everyone to 60.   That's the perfect age. People should a good decade or so to enjoy their retirement, go on holidays, etc. Finishing work at 67 is a little late, these people will be too long in the tooth to enjoy a good long break!

Yeah, and if they raise it to 67 now, by the time I'm 67, the cutoff age will be 75.  Of course I've got super so it won't matter to me, but why should we slave away for 50 years and not get any time for us?

Vanessa wrote on Aug 19^th, 2010 at 5:59pm:

wrote on Aug 19th, 2010 at 5:57pm: Yes most defiantly, 67 is far to long.  Lower the pension age for everyone to 60.   That's the perfect age. People should a good decade or so to enjoy their retirement, go on holidays, etc. Finishing work at 67 is a little late, these people will be too long in the tooth to enjoy a good long break!

Why not go all the way to 50-55 as they did in Greece? That way you can sentence Australia to life of socialist dependance and destroy the economy.

Seriously, the level of stupidity in these forums astounds me

Vanessa wrote on Aug 19^th, 2010 at 6:00pm:

BlOoDy RiPpEr wrote on Aug 19th, 2010 at 5:56pm: We should look at returning the voting age too 21. As most under 21 have little care or understanding  politics. I don't agree. I had a huge interest in politics from a young age and I was thrilled when I was able to vote for the first time, just a few weeks after my 18th birthday. I wouldn't object to making voting voluntary for people aged 18-21, though.

Voting should be voluntary for everyone.

... wrote on Aug 19^th, 2010 at 6:02pm:

Vanessa wrote on Aug 19th, 2010 at 5:59pm: wrote on Aug 19th, 2010 at 5:57pm: Yes most defiantly, 67 is far to long.  Lower the pension age for everyone to 60.   That's the perfect age. People should a good decade or so to enjoy their retirement, go on holidays, etc. Finishing work at 67 is a little late, these people will be too long in the tooth to enjoy a good long break! Yeah, and if they raise it to 67 now, by the time I'm 67, the cutoff age will be 75.  Of course I've got super so it won't matter to me, but why should we slave away for 50 years and not get any time for us?

I couldn't agree more. Enjoy your retirement, take a trip around the world - you'll be searching for a nursing home if you stopped work at 67!

That depends what sort of work you do Vanessa.

65 used to be "old" when life expectancy was about 75.  Nowadays, people are living into their 90's. How do you expect to survive for 30 years on the Age Pension of $250 a week? No holidays, just drudge and sausages and mash for eons.  ;D

White Dove wrote on Aug 19^th, 2010 at 6:06pm:

65 used to be "old" when life expectancy was about 75.  Nowadays, people are living into their 90's. How do you expect to survive for 30 years on the Age Pension of $250 a week? No holidays, just drudge and sausages and mash for eons.  ;D

It's called saving, putting money aside. The aged pension is a bit more than $250 a week, it works out to be around $350.55 a week - I have lived on less than that for the past three years, and it's not that hard once you know how to budget.

A couple of things to consider?

First, the insurance industry has shown the linkage between earlier retirement and living longer.

Basically, the earlier one retires, the longer you live.

The longer you leave reirement, the earlier you die!

From memory, the figures were those who retired at 55, lived on average to around 85, whereas those who worked until 65 or longer, were lucky to make it to 70.

Second, there will be many who will find they are unable to retire, early or at all, particularly following the return of the GFC and substantial declines in wealth, due to plummeting share & housing prices.

Whilst we (in OZ) have so far avoided the worst of the GFC, that situation will change during the next 12 months, starting probably around this October.

That said, many in other parts of the world, in particular the USA & Europe, are already find things tough and the resumption of falling share prices & housing prices, will literally rule out retirement altogether, for many in the USA & Europe.

We, in Australia, are about to find out what many overseas have already experienced and whether it is Labor or Liberal that win this weekend, they will not be able to change the basic direction of Global ( & OZ) Economics, but they may be able to make a difference, at the margins.

This time IS DIFFERENT!

I guarantee we will see changes, but we may not like them?

Second, this has NOTHING to do with retirement age...

If you wish, you can retire and access your Superannuation Fund any time AFTER you turn 55..

The only change mentioned in the OP is the eligible age for a Government Old Age Pension....

gizmo_2655 wrote on Aug 19^th, 2010 at 9:28pm:

Second, this has NOTHING to do with retirement age... If you wish, you can retire and access your Superannuation Fund any time AFTER you turn 55.. The only change mentioned in the OP is the eligible age for a Government Old Age Pension....

If share markets & housing both decline by 50%, how many people will have sufficient funds to retire, at 55 or 65 or 75?

perceptions_now wrote on Aug 19^th, 2010 at 11:09pm:

gizmo_2655 wrote on Aug 19th, 2010 at 9:28pm: Second, this has NOTHING to do with retirement age... If you wish, you can retire and access your Superannuation Fund any time AFTER you turn 55.. The only change mentioned in the OP is the eligible age for a Government Old Age Pension.... If share markets & housing both decline by 50%, how many people will have sufficient funds to retire, at 55 or 65 or 75?

How many politicians are there?

perceptions_now wrote on Aug 19^th, 2010 at 11:09pm:

gizmo_2655 wrote on Aug 19th, 2010 at 9:28pm: Second, this has NOTHING to do with retirement age... If you wish, you can retire and access your Superannuation Fund any time AFTER you turn 55.. The only change mentioned in the OP is the eligible age for a Government Old Age Pension.... If share markets & housing both decline by 50%, how many people will have sufficient funds to retire, at 55 or 65 or 75?

Well since all most all super funds invest in the mining industry, which has been in 'boom' conditions for the last 10 years at least, and since by law all employers have to contribute to employees superannuation schemes.....
basically anyone who signed up for the superannunation scheme when they started their job (which has been part of the employee paperwork at the last 5 jobs I had) should have enough money in their various super funds to manage to live comfortable for  7-12 years after retirement....