Raising super access age a negative policy move

Calls to raise the super access age beyond 60 are not likely to return economic or social benefits, according to a Deakin Law School superannuation law expert.

 

Dr Rami Hanegbi, who researches tax and superannuation law and policy, has reviewed the pros and cons of raising the superannuation access age and found that raising the age would, in net terms, be a negative policy move.

 

“Laws that raise the access age to above 60, and have the effect of leaving many workers in a position where they have no viable choice but to continue to work, are a policy change likely to have significant consequences,” Dr Hanegbi said.

 

“For example, there are those who are constrained from working longer due to the physically demanding nature of their work such as bricklayers.

 

"However, even those working in industries not requiring large amounts of physical exertion will in many cases be disadvantaged from such a policy move.

 

“While this course could bring some economic benefits, these are likely to be limited. This will be the case whether future labour markets are tight or slack, though in the latter case the benefits will be even more limited.”

 

In his recent review of raising the superannuation access age, Dr Hanegbi found that it was almost certain that such laws would substantially negatively impact numerous people.

 

“Specifically, while it true that life expectancies have risen, the rise in ‘healthy life years’ has been materially less dramatic,” he said.

 

“As a result, raising the superannuation access age from say 60 to 65 would dramatically reduce the percentage of one’s life spent in the “golden years of retirement” where one is both retired and in good health.

 

“The negative impacts of such a policy on people’s right to self-determination, as well as on widespread confidence in the superannuation system, are also important consequences on legislating such a policy.”

 

Dr Hanegbi said that ideally the enactment of policies that would have a marked effect on people’s lives should be based on solid evidence that that shows such laws were, in the whole, welfare-enhancing.

 

“Such evidence appears to be lacking in the case of raising the superannuation access age,” he said.

 

“Compulsory superannuation has been a part of the retirement landscape in Australia for more than 20 years, with the availability of retirement funds having a marked affect not only on taxpayers but also their families and other members of the community.

 

“The consequences of making changes therefore needs to be carefully considered.”

 

Dr Hanegbi’s paper, ‘Should the Superannuation Access Age Be Raised?’ was published in the journal Australian Tax Reform.

 

6 April 2018.