Written

For

The

Australian

-

How

Australia’s

age

pension

compares

to

the

rest

of

the

world

Nearly two-thirds of Australians over 67 rely on the age pension for at least part of their retirement income. That's a big number — and a big bill for taxpayers, costing the federal government over $60 billion a year, or close to 10 per cent of total spending.

So how does our system actually stack up globally? Better than you might think. The full age pension pays singles $31,223 and couples $47,070 annually — enough to cover roughly 90 per cent of what ASFA considers a "modest" retirement. Throw in the pension concession card and its thousands of dollars in health, energy and transport savings, and it's a meaningful safety net.

Compared to OECD peers, Australia spends just 2.5 per cent of GDP on pensions — well below the 9 per cent average and a fraction of Italy's 16 per cent. Our pension equals 26.2 per cent of the average wage (13th on the OECD list), and our access age of 67 is bang in line with global norms. Denmark, by the way, is heading to age 70 by 2040 and possibly 74 by 2060. Ouch.

Where I think reform is coming is means testing — specifically, the family home exemption. Consider this: a retired couple in a $5 million Sydney home can collect a full pension worth $50,000 a year, plus up to $150,000 in aged care support. Meanwhile, the renting couple next door with $1.5 million in super get nothing. That's not fair, and it's not sustainable.

The Grattan Institute wants home equity above $750,000 included in the assets test. Policy Institute Australia wants the threshold set at $500,000. Given the Albanese government has already shown appetite for touching negative gearing and capital gains tax, I'd be genuinely surprised if the family home exemption isn't on the table by the 2027 budget.

Fair warning to homeowners banking on the current rules — they may not last.