Aged Care Australia: Are Retirees Given Too Much?

Are retirees given too much? That’s the question being asked by The Association of Superannuation Funds of Australia (ASFA) who fears that too few self-funded retirees will push Australia to the brink of a retirement disaster.

The ASFA believes the Government’s current income and asset’s tests are too generous and it should be tougher for retirees to access the pension.

A retired couple can currently own their own home plus have up to $273,000 in assets and still access the full pension. Retired couples who do not own a home can have up to $412,000 in assets.

A recent study by CPA Australia found that most baby boomers spent their superannuation shortly after retirement.

Managing Director of Towers Watson Andrew Boal said that with the ageing population and lack of self-funded retirees, there could be a blowout in healthcare, maintenance and income support costs in the future.

Strategies to prevent this blow out include tightening the means and asset tests, increasing compulsory superannuation contributions from employers to 9% to 12% by 2020 or increase compulsory contributions to 15%.

About 75% of retirees are reliant on a full or part pension to survive.

Source: LASA-WA Newsletter December 10th