Australia set to raise retirement age to 70

Friday 02 May 2014 20.26
Joe Hockey said the 'age of entitlement' is over
Joe Hockey said the 'age of entitlement' is over

The Australian government has said that it wants to raise 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.

He said the new administration of conservative Prime Minister Tony Abbott wants 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 Mr Hockey, who is due to hand down his first national budget on 13 May.

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.

This is despite an official retirement age of 60, a recent report by the Organisation for Economic Co-operation and Development said.

Mr 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.

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 seven million.

People aged 65 or over account for 22% of the population, the Actuaries Institute of Australia has forecast.

Meanwhile the number of those aged over 85 will almost triple from under 500,000 to 1.4 million people in that time, placing pressure on the health system, it said.

Australia currently has a population of 23.4m, and the life expectancy at birth is 79 for men and 84 for women, according to official Australian Bureau of Statistics figures.