How the Age Pension changes affect you

FROM 1 July 2017, the qualifying age for the Age Pension will progressively increase by six months every two years, reaching 67 years by 1 July 2023 for those born on or after 1 January 1957.

This increase in the qualification age for the Age Pension was announced in the 2009 federal budget.

There are no changes for anyone born before 1 July 1952. For these people the Age Pension qualification age will remain 65.

Australia is in the midst of a major demographic change - we're healthier and living longer than ever before, and that's great news.

But it means our population is ageing, and a growing number of people receive the Age Pension for far longer than in the past.

Over the next 40 years the number of people aged 65 and over will more than double to 8.9 million people.

There will be fewer people paying taxes for more people receiving the pension.

Currently, 4.5 people of working age support every person aged 65 years and over. This will drop to 2.7 people by 2054-55.

At close to $45 billion per year, the pension is one of the biggest spending items in the Budget, and it will only continue to grow.

The taxpayer-funded Age Pension provides an important safety net for people who are unable to support themselves fully in retirement, and supplements the retirement incomes of those with lower levels of private savings.

It is also important for those who can, to save as much as possible for their retirement.

If the government is to continue to support people in their retirement while keeping the pension sustainable, it argues it makes sense to act now.

When the Age Pension was introduced in 1909, it was set at eight years after the average life expectancy of 57.

Now, the Age Pension is set 18 years before the average life expectancy of 83.

"As we live healthier and longer lives, we can stay in work longer, to contribute to the economy, and boost our savings and superannuation balances, for a more comfortable retirement," the Department of Social Service advice states.

"This change will not affect the value of the Age Pension, and people can still retire at whatever age they like; it is the age at which they can become eligible for the Age Pension that is changing.

"The age at which people can access their superannuation does not change. That remains between 55 and 60, depending on when you were born."

DSS also advise that recipients of Veterans' Affairs payments will not be affected.

More information on retirement planning or changes to the Age Pension qualification age is available from:

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