Today’s 50-year-olds will get to retire on the pension at 67 after Prime Minister Scott Morrison abandoned a plan to raise the retirement age.
The Liberal party has planned for years to raise the aged pension age to 70 in 2035, but Mr Morrison dumped the idea.
“For senior Australians the retirement age will stay at 67, it will not go to 70,” Mr Morrison told reporters on Wednesday.
“If they want to keep working, well they can.
“But for those who aren’t in that position, the pension will be there.”
He said he had been thinking about dropping the proposal “for some time”.
National Seniors Australia says the move makes sense politically because one-in-two voters is over 50.
But Labor leader Bill Shorten, who has long opposed the pension age lift, believes Mr Morrison will try to raise it again if the coalition wins control of the Senate at the next federal election.
“He wants to drop it because he is worried about losing his day job,” Mr Shorten told reporters in Townsville.
Deputy Prime Minister and Nationals leader Michael McCormack described the about-face as a “sensible and pragmatic” move.
“I think if you’re a tradie or a brickie or a shearer in rural and regional Australia, you don’t want some suit in Canberra telling you that you’ve got to work until you’re 70,” Mr McCormack told Sky News.
Council on the Ageing chief executive Ian Yates said the original plan had caused anxiety for people who needed to work to survive but knew it would be tough to get a job.
The pension age plan was first announced by the Abbott government under then-treasurer Joe Hockey in 2014 but was never legislated.
Under the original proposal, the qualifying age for the pension would have increased by six months every two years until reaching 70 years in 2035.
It was expected to save the budget about $3.6 billion over four years.
Treasurer Josh Frydenberg said the change would not affect the budget in the short term.
“This is one of those 2014/15 Budget measures which had no hope of getting through the parliament,” he told reporters.
But Deloitte’s Chris Richardson said pensions would have to be addressed at some point.
“Pension age is not something that should stay there fixed forever … it is something that should move over time,” he said.