Age pension will shrink but stay safe, Treasury says
Australia's age pension is fundamentally secure despite fewer seniors receiving full payments as superannuation grows.
Australia's age pension system will survive intact for millennials and younger generations, according to the Treasury's Intergenerational Report released last week. Spending on the pension is falling despite the number of seniors doubling: payments will drop from 2.3% of GDP to 1.8% by 2066.
Today about 40% of seniors get a full age pension; that figure will sink to 15% by 2062 as more retirees have enough superannuation and inherited wealth to miss the means test. Two real pressures loom: Australia's fertility rate sits at 1.5 children per woman, below the 2.1 needed to replace the workforce, and aged care costs are rising as medical advances extend life.
The government is quietly shifting toward a user-pays model for healthcare, meaning retirees will shoulder more costs themselves.
- 2.3% of GDP
- Pension spending 2025-26
- 1.8% of GDP
- Pension spending 2065-66
- 40% of seniors
- Full pension recipients today
- 15% of seniors
- Full pension recipients by 2062
Why it mattersYou don't need to raid your super early or make risky bets to retire safely. But plan for higher out-of-pocket healthcare costs in later life.
AustraliaAustralians under 40 can rely on the age pension existing, but will likely get less of it as superannuation rules and inheritances keep growing. Healthcare and aged care will cost more from your own pocket.
✓ Claims checked against the source. checked 50 min ago
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