The Impact of the SGL System on Age Pension Demand in Australia

Abstract

The Australian Superannuation Guarantee Levy system (SGL) and the Age Pension are linked through the income and asset test of the Age Pension system. Variations in likely demands for full or partial Age Pensions will occur as variations occur in the amount of retirement benefits that members of the SGL system receive. Despite the intention that the SGL system would reduce reliance on the Age Pension system, in this paper we demonstrate that there is a real possibility that this intended reduction may not occur.