The age pension was introduced by Labor prime minister Andrew Fisher in 1908 as a safety net for Australians in the last years of their life. When it was first established, the age for eligibility was set at 65 – when the average life expectancy for Australian men was 63. It was not expected that most people would live long enough to receive it, and those they did would not get it for very long.
With advancements in health care and medical science, our life expectancies have risen dramatically, and the cost of the age-pension has ballooned into the single largest federal program.
It cost $36 billion in 2013, almost 10 per cent of the entire Federal budget, a bill that has risen by $13 billion over the past decade as Australians became healthier and lived longer. Annual administration costs are estimated at $1 billion a year.