Falling company dividends will force thousands of self-funded retirees onto the pension next year, a seniors' group has warned.
It insists the federal government must stick to its promise to reform the aged pension, even it it means sending the budget into deficit.
The investment portfolios of self-funded retirees have suffered a 50 per cent battering on the stock market in the past 12 months, National Seniors Australia says.
"We believe that during 2009 we will have many self-funded retirees who (will) have a significant financial crisis on their hands," chairman Everald Compton told reporters in Canberra on Wednesday.
Thousands of them would be forced onto the pension, while others would have to re-enter the workforce, where Mr Compton fears they might suffer discrimination.
"As soon as dividends drop there will be ... thousands of self-funded retirees going down to Centrelink over the whole issue," he said.
He is urging the government to pursue aged pension reform after it receives the Harmer review into pensions in February next year.
"The single pension has to have something done with it - they're living in poverty," he said.
Mr Compton has no qualms about an increase in the aged pension pushing the budget into the red.
"The deficit word doesn't worry me at all."
