Reducing the retirement age will provide an economic stimulus during the pandemic

Temporarily reducing the qualifying age for the retirement pension in Australia would provide an instant economic stimulus and be good for public health during the coronavirus pandemic.

Due to the impacts of the coronavirus pandemic, Australia’s effective jobless rate is currently 9.8 per cent. The federal government has dramatically increased welfare payments via JobKeeper and JobSeeker to keep the help the economy ticking over. Funds from other sources will need to be unlocked to help the government navigate the pandemic.

Currently the retirement ‘pension age’ in Australia is progressively being increased. By the year 2023, if you were born after the 1st January 1957, then you can’t access the retirement pension until the age of 67-years.

There are two main reasons for increasing the retirement age: 1/ The longer you work, the longer you’re contributing to tax revenue; 2/ The longer you’re retired, the longer you’re receiving retirement welfare funds.

For the first time since the Great Depression, there’s now a strong argument that the qualification age for retirement welfare should be temporarily lowered, for example, to the age of 64-years-of-age.

Allowing elderly workers the opportunity to access the pension earlier would also grant them access to their superannuation savings — which would result in an economic stimulus.

An early retirement for an elderly worker would mean a job for a younger worker — this would decrease welfare expenditure for the government’s JobSeeker and JobKeeper programmes.

The welfare payment allocated for the younger person on JobKeeper or JobSeeker would be transferred to the newly retired person in the form of the retirement pension. There’s a much greater benefit in giving the welfare payment to a person who also has the power to supercharge the economy by also spending their superannuation savings.

There would also be a by-product benefit of this early retirement concept — suddenly people who are categorised as ‘unemployed’ would be re-classified as ‘employed.’

There would also be a spike in people classified as ‘retired’.

Another additional benefit of allowing a person to retire early during the coronavirus pandemic would be a public health benefit — the elderly worker would have less of a chance to be exposed to the disease.

Incentivising workers to retire early would be an excellent early Christmas present for hundreds of thousands of elderly workers and the businesses where they would be spending their superannuation savings.

The benefits are obvious — and during a period of restricted travel, it could be argued that a new batch of retirees would almost certainly spend their retirement savings in Australia, and not overseas.

#Australia #Coronavirus #JobKeeper #JobSeeker