The increase in the retirement age is a current issue both in Europe and beyond. Proof of this is the new Law approved by Denmark sets the retirement age at 70 years which is now followed by a Commonwealth decision in Australia. In this way, since January 1, 2025, the new retirement age has been in force, going from 67 to 68 years.
The reasons given by the Australian Government are many and varied, but they all have to do with the economy, and the savings it will mean for the pension pot. The reform was presented, at the time, as a “lifetime benefit” for active workers since they could improve their finances and savings while, at the same time, contributing to guaranteeing pensions for the future.
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The change in retirement pensions with which Social Security would reduce spending by 40%
The Executive was clear. Prolonging the working life of employees will allow them to contribute more to Australian Social Security and then, in return, they will have more benefits when collecting this benefit, as reported by the local media. SuperCarrides.
Those affected by this new measure are those born after mid-1958, implying an additional year of contributions before being able to access the public pension. According to the first data made public by the Australian Government, this change will affect millions of workers and will also help the elderly to see economic improvements, reducing pressure on the pension pot.
Savings of more than 22,500 euros and financial stability
To support the increase in the retirement age, the Government of this country presented data collected by the aforementioned media which indicates that those who delay their retirement one more year will be able to increase between 40,000 and 60,000 Australian dollars (the exchange rate would be between 22,646 euros to 33,970 euros) their contributions to this retirement fund.
The reason is none other than the growth of investments and the achievement of another year of labor contributions. A margin that will allow us to face inflation and improve the quality of life of the new retirees.
But this is not the only advantage and it is supporting the idea that the permanence of older employees in the labor market will serve to improve national productivity.
Older workers will receive free financial advice
The Australian Government has committed to offering older workers financial advice and retraining courses completely free of charge. In addition, it will allocate special labor support services to those people who are close to reaching retirement age.
Companies that hire senior staff will have financial aid and new, more flexible work models will be promoted so that older staff members want to stay in the position for a long time.
In the event that there are physical limitations for the development of functions, the criteria for early retirement or disability pensions are maintained, according to what will be published in a few weeks by the Tax Agency (ATO) and Services Australia.
Workers’ groups are against increasing the retirement age
The increase in the retirement age in Australia is within a trend that is already being seen in other countries such as the aforementioned Denmark or the United Kingdom. Now, with the measure being debated, different reactions are being seen. On the one hand, economists and unions are studying how it will contribute something positive to the sustainability of the pension system.
And on the other hand, there are the workers, who have already expressed their concern about physical wear and tear and possible age discrimination. The Government has sent them a message of reassurance assuring that this measure will be evaluated periodically.