Despite initial sympathy for the move, advocates yesterday attacked the contrast between the rich still being able to withdraw their super and retire at 60, while the poor would be forced to work or struggle on the dole until 67.
There was also unease about an associated proposal in a report from the Henry Tax Review released with the Budget to lift the superannuation preservation age to 67, effectively making it impossible to get an income from either source before 67 without being in the labour market or having investments...
Treasurer Wayne Swan defended the move strongly, arguing it was essential to put pensions on a more sustainable footing given rapidly improving life expectancy.
"Currently we have five workers in Australia for every person aged 65 and over and by 2050, that will be two and a half," he said during a round of post-Budget radio interviews.
"Life expectancy has increased by 23 years since the aged pension came in. Twice as many people are going on it for twice as long."
National Seniors welcomed the move, noting that it would not come in until 2023.
But the Combined Pensioners and Superannuants Association said it would ramp up poverty among Australians in their 60s and and force people already on low incomes to toil longer in hard physical jobs.
"People in their 50s and 60s are often unable to find adequate employment, or are low income earners or are in physically-demanding jobs where it is simply not possible for them to continue work." said the association's policy officer Charmaine Crowe.
"Raising the pension age to 67 will force those people on to the NewStart unemployment benefit which we know is inadequate, or into under-employment.''
"People physically unable to work full-time will have to keep working part-time in order to sustain themselves.
"The long-term unemployed tend to be in their 50s and 60s. This is only going to lengthen the time they're on the barely-adequate NewStart."
Sydney University workplace relations analyst Michael Rafferty said the "pernicious'' move would "entrench inequality'' and force Australians - some of the hardest working people in the world - to work even longer.
"The rich can retire whenever they like and tax expenditure on super is nearly $20 billion a year - and they have only knocked off about $2 billion of that over three years,'' he said. "The rich have been hit wth a feather duster and the poor have been told you are going to work longer and harder.''
University of NSW Pensions and Superannuation Centre deputy director John Evans branded the move a "kneejerk'' decision that could damage Labor's constituency of the vulnerable.
"That's effectively what it is - a class divide,'' he said. "We were heading towards an integrated retirement system, but this goes back to the safety net.''
However the Opposition supported the move, with leader Malcolm Turnbull saying his only concern was that it would not come in soon enough.
"As Australians live longer and work longer and so forth it’s been recognised as an issue for some time. But to momentously announce you are going to increase the age to qualify for the pension and then say it won’t hit until 2023, it isn’t a courageous or particularly tough decision," he said.
David Knox , a partner at Mercer Consulting who proposed the 67 pension age in a paper prepared for the Committee for the Economic Development of Australia said whatever age was selected for the pension there would "always be some people younger than that age who are unable to work for a variety of reasons or are worn out".
"One needs to recognise that the number of blue collar workers is now proportionately lower than it has ever been, and that people who are 67 today are much healthier than were 65 year olds were when the pension was introduced."
But he expressed dismay at the associated proposal in the Henry retirement incomes report to lift the superannuation preservation age to 67.
"It surprises me. It is something I do not support," he said.
"The superannuation access age should generally be about five years younger than the pension age in order to provide flexibility. You cannot assume that everyone will retire at the same age, in fact today most people retire before 65."
Superannuation access is at present available at 55, with the age set to climb to 60 by the early 2024.
The Henry Review recommends a further staged increased to 67 in order after which it should remain aligned with the pension age in order to stop Australians spending their super payout quickly and then getting access to the part-pension.
"Only compulsory savings that are carried through to retirement take pressure off pension expenditures," the report says. "Arrangements that encourage shorter working lives also reduce participation rates and place a greater tax burden on those who work."
The Review says its final report in December will explore further the issues involved with aligning the two ages.
The Henry recommendation was welcomed cautiously by the Combined Pensioners and Superannuants Association.
Policy officer Charmaine Crowe said it was mainly high-income Australians who took out their super early and they tended to not be in back-breaking jobs.
"But there would need to be safeguards in place to ensure that if people can't work for whatever reason in their 60s they can get special access to their super."
"At the moment that is really only available to people with terminal illness, we believe the option has become available for anyone in hardship."
"Right now the government loses a huge amount of money - anywhere between $1 billion and 10 billion a year, it is difficult to qantify, because high-income earners take super out while putting untaxed salary in - the government should stop that directly."
