Age pension tightening sustainable: FSC
The Federal Government's announcement to tighten age pension rules is the right measure in addressing concerns the retirement system is being weakened by over-generous eligibility rules for the age pension, the Financial Services Council (FSC) said.
The FSC said the fact that couples who owned their own home and had over $1 million in assets could still qualify for the age pension threatened the stability of the retirement system.
Following Minister for Social Services, Scott Morrison's announcement to tighten age pension rules, FSC chief executive, Sally Loane, said the fact that the taper rate has been increased so higher income retirees have to spend their private savings before being eligible for the pension demonstrates the targeting of the retirement system.
"Pension reforms must be part of a national debate on a holistic retirement policy. The age pension, superannuation and tax systems must be aligned to deliver fairer and better outcomes for Australia's ageing community," Loane said.
Rice Warner Actuaries research showed there are over 850,000 retirees getting a partial age pension, or 36 per cent of the total retiree cohort, which surged higher when the Howard Government lowered the taper rates for the asset test for age pension.
"The Abbott Government's reforms go some way to putting the age pension system on a more sustainable path," the FSC said.
AUTHOR
Malavika Santhebennur
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