Ensuring older Australians have dignity in retirement

Around 3.5 million pensioners have benefited from our 2009 Secure and Sustainable pension reforms. These historic reforms delivered the biggest one-off increases to the pension in 100 years and improved the indexation arrangements. Since 2009, the maximum fortnightly rate, including supplements, has increased by around $207 for singles and $236 for couples (combined). This represents a 34 per cent increase to the maximum single pension and 24 per cent increase to couples' rates.

These reforms have improved the adequacy of the pension system, in particular the adequacy of the single rate of pension, which is now two-thirds of the couples combined rate.

A Stronger And Fairer Age Pension

Demographic change and increased life expectancy presents a challenge for the sustainability of the pension system. That is why the Government is progressively increasing the qualifying age for the Age Pension by six months every two years, starting from 65 in 2017 and reaching 67 in 2023.

The Government has also taken steps to increase the fairness of the pension system. This includes extending the normal deeming rules to superannuation account-based income streams for the purposes of the pension income test to ensure all financial investments are assessed fairly and under the same rules. Normal pension deeming arrangements will apply to new superannuation account-based income streams from 1 January 2015. All products held by pensioners before 1 January 2015 will be grandfathered. Some pensioners may receive a higher rate of Age Pension payment under the new arrangements.

These reforms to the pension system build on the Government's reforms to improve the fairness, sustainability and efficiency of the superannuation system, helping to provide older Australians with dignity and security in their retirement.

Encouraging Working Older Australians

The Government also recognises that seniors play an increasingly important role in the modern workplace. That is why the Government is encouraging working pensioners through the Work Bonus, which provides an exemption of $250 a fortnight for employment income from the pension income test and any unused amount can be used to offset future earnings up to a maximum of $6,500.

Growth in maximum rate single Age Pension (per fortnight)