A sustainable pension

Demographic changes

Australia faces major demographic change over the coming decades.

• By 2047, some 7.2 million Australians will be aged over 65, representing 25 per cent of the expected population, almost double the current 13 per cent.
• Currently, there are around five people of working age to support every person aged 65 and over. This will more than halve to 2.4 people by 2047.
• Increasing longevity means that people are receiving the Age Pension for far longer periods than in the past.
• Demographic change means that the costs of a given pension increase today will almost double as a share of GDP by 2050.

Reforming the pension system

Building a sustainable pension system requires that these demographic changes be taken into account to ensure that the pension, while providing pensioners with an adequate standard of living, can be afforded by taxpayers into the future.

The Government has taken a series of tough decisions to ensure the pension system remains sustainable in the long term, including:

• progressively increasing the Age Pension qualifying age to 67 years from 2017
• ensuring that the pension increases are targeted to those who most need them
• supporting ongoing workforce participation by age pensioners.