Cbus warns tradies risk losing thousands in retirement

The fund has launched a new campaign after finding many older tradies have lacked confidence understanding entitlements and missed pension income.

Cbus Super has launched a targeted campaign to help older tradies avoid missing out on tens of thousands of dollars in Age Pension payments, warning that thousands of building and construction workers could be forgoing close to $900 a week as a couple.

The fund, which manages more than $105 billion for 925,000 members, found nine out of ten members approaching retirement have lacked confidence in understanding government entitlements. 

Broader research has shown that a third of Australians have delayed their Age Pension applications by more than a year or have missed out entirely.

“One in three Cbus members together with their partners could be missing out on up to $46,000 per year through late Age Pension applications, but low confidence and complexity means many are leaving money on the table,” said acting chief member officer Bernie Dean. 

“We’re seeing older tradies and construction workers relying on their super too soon, missing out on vital government payments that could help them live more comfortably.”

Many Cbus members nearing retirement have had modest balances, often below $150,000, because they began working before super became compulsory, faced lower early super rates, or experienced periods of unpaid or insecure work. 

As a result, most will rely on both super and the Age Pension to fund retirement.

To help members understand what they may be eligible for, Cbus has launched a new campaign offering clearer guidance. 

“The system is complex, but we're determined to make sure our members don't miss out on money they've earned the right to receive. If you're a former tradie in your 60s, we want you to check your eligibility – you might be entitled to more than you think,” Dean said.

The campaign highlights that one in three Australians could be missing out on up to $46,000 per year as a couple due to late Age Pension applications, with many delaying by a full year. Reducing late applications by just one per cent could deliver up to $5.9 million more for Cbus members. 

The fund noted that members who delay applying risk losing tens of thousands of dollars because Services Australia does not backpay entitlements before the application date.

Only 36 per cent of Cbus members approaching retirement have had a good understanding of the age eligibility rules for the Age Pension, while nine out of ten have lacked confidence in their overall understanding of entitlements.

The nature of work in the sector has compounded the problem as fewer than four in 10 members eligible for the full Age Pension have been in full-time work in their 60s, with many instead juggling casual, part-time or sole-trader arrangements. 

“The main reason members tell us they don't retire until 67 is that they cannot afford to retire earlier, as they'll only receive the Age Pension from 67. But many are struggling with insecure work and dipping into their super just to make ends meet,” Dean said.

Cbus is now rolling out tailored communications at ages 57, 66 and 66.75, with a reminder at age 68 for those who have not applied and may be missing out. 

The initiative also includes a new Age Pension calculator, information on other entitlements such as JobSeeker and the Disability Support Pension, retirement planning seminars for low-balance members, and advice services to help maximise eligibility.