For thousands of Australian retirees, there’s a mistake that’s costing them big time — a mistake they don’t even know they’re making. A simple, yet often overlooked step is keeping many retirees from claiming their aged pension, leading to missed payments of up to $46,000.
Why Retirees Are Missing Out on Their Pension
As Cbus Super recently pointed out, a significant portion of eligible retirees aren’t applying for the aged pension on time. A third of those who qualify delay their applications by more than a year, which means missed payments that could have significantly eased their financial burden.
For couples, the missed payment amounts to up to $46,000 over that time, and for individuals, the figure is still substantial — $30,646 in lost pension payments. That’s a lot of money, especially for people who often rely on these payments as a vital part of their retirement income.
Why Is This Happening?
It all comes down to the complexity of the aged pension system. According to Bernie Dean, Cbus Super’s Chief Member Officer, many retirees are simply unaware of the application process, reports Yahoo Finance. The eligibility criteria are confusing, and many don’t know they are even entitled to the pension, or they get lost in the maze of paperwork.
To be eligible for the aged pension, Australians must meet specific requirements, including having a combined household income of less than $3,934 per fortnight and assets under $481,500 for homeowners. However, if you miss these criteria, you might still be entitled to a part-pension. The complexity of these rules, though, means retirees often wait too long to apply, missing out on critical support.
The Real Cost of Missing the Pension
Dean explains that retirees who miss out on the pension for a year face significant financial stress, often dipping into their personal savings to cover the gap. Without this income, everyday things like car services, holiday gifts, or even basic living costs can become overwhelming.
Unfortunately, there’s no way to claim back the missed payments, so once the window closes, so does that financial relief. For many retirees living on a modest super balance, the impact of these missed funds can be long-lasting, affecting their quality of life.
Moving Toward a Solution
There’s hope for improvement. If just 1% fewer retirees missed their pension applications, Cbus claims an additional $5.9 million could flow back into retirees’ pockets. Advocates are calling for a simplified pension system to make it easier for Australians to access the support they need — after all, they’ve worked hard their whole lives for this.
With wage stagnation and increased living costs, the need for an efficient, user-friendly pension system has never been more critical. Retirees deserve better, and with some changes to the system, they might just start receiving what they’re owed.
