Older Australians are prepared to consider changes to pension eligibility in a move that will provide heart to the Abbott government, which is desperately looking for budget savings.
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The national body for older Australians, which has been running a "hands off the pension" campaign in the wake of the last federal budget, says it is prepared to consider some reforms, provided there is no cut to pension indexation and that any changes are considered in a broader review.
"What we are signalling to the government is that there are areas about pension eligibility that one can have a legitimate conversation about," Councils on the Ageing chief executive Ian Yates told Fairfax Media.
"You can't say that we won't discuss things to do with the pension at all if you also, as we do, want to argue for increased expenditure on Newstart or in the health space," he said. "These things fit together."
In a position paper released on Thursday, COTA is calling for a more sophisticated national policy debate around retirement incomes, arguing that an independent review of retirement incomes - including pensions, superannuation and taxation - needs to be announced in the May budget.
It argues piecemeal changes will not work over the longer term.
While the government has talked publicly about a retirement incomes review - that is also supported by the Business Council of Australia - before the next election, it is understood a final decision has not been made.
COTA remains extremely critical of the government's 2014 budget proposal to change pension indexation from average male weekly earnings to the consumer price index.
"Frankly, many aged pensioners would die as a result," the paper says, as pensioners would lose too much money. "Cutting indexation has its major impact on full rate pensioners - those who by definition have the least in other assets and income."
COTA instead says that it would be prepared to consider an increase in the pension age, as the government is also proposing, but notes that discrimination against older workers needs to be addressed
The Labor Party has announced it would crack down on superannuation concessions for the wealthy if it won government, and Mr Yates agreed the super system must be made fairer. But he stressed this should be done through the proposed retirement incomes review, because issues like tax, superannuation and pensions were "terribly interconnected".
"This is the window for doing it," he said.
Social Services Minister Scott Morrison has been negotiating with stakeholders and the Senate crossbench to get pension reform through Parliament. He has said the government is open to considering alternatives to changing indexation, as long as they make the system more sustainable.
The government has ruled out making major changes to superannuation in the May budget.
