PENNY-pinching, punitive and unreasonable is how seniors and migrant advocacy groups have described proposed new rules that will slash the age pensions of migrants who travel overseas.
In another government cost-saving measure targeting seniors, the portability rules for pensions will be changed, reducing from 26 to six weeks the amount of time a full pension can be claimed while overseas by anyone who has lived in Australia for less than 35 years from the age of 16.
And even those who do meet the residency criteria, including Australian-born pensioners, will feel the squeeze as their pension supplement is reduced.
The new rules, which will go before parliament some time this year, adjust the rate of pension by 1/35th for every year below 35 a non-Australian-born pensioner has lived in Australia, effective after six weeks overseas.
Previously this was 26 weeks.
For example, if a pensioner lived in Australia for 20 years between the age of 16 and 65 they will receive 20/35ths of the means-tested pension rate after six weeks away.
In addition, the full fortnightly pension supplement for a single person of $65.10 reduces to a basic rate of $22.70 after six weeks ($98.20 to $37.40 for a couple).
The supplement includes the pharmaceutical, utilities and telephone allowances, and the GST supplement. This measure came into effect on January 1.
There is no change to the energy supplement, which already stops after six weeks.
A government spokeswoman said it was unreasonable for taxpayers to pay pensions, with indefinite portability, to people outside Australia without regard to their period of residence in Australia, for anything other than short absences.
“It is reasonable to expect that people who receive an Australian pension, while they are overseas, have spent a large portion of their working life in Australia and contributed to the Australian economy and community,” he said.
She said the change “reflects the principle that the retirement costs of a person should be fairly distributed between where a person has lived or worked during their working life”.
She added that Australia was one of the few countries that paid a non-contributory pension abroad indefinitely.
“Canada and New Zealand also do and they require 40 and 45 years respectively to receive a full rate pension.”
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FEDERATION of Ethnic Community Councils of Australia chairman Joe Caputo described the changes as unnecessarily punitive.
“Once people accrue certain rights they should be able to use those rights in a global world,” he said.
“The savings the government will make will not be huge; they are just going to make people suffer and many people won’t go overseas because it’s a big investment and they’ll decide they can’t afford it or they will think it’s not worth it for six weeks.” Mr Caputo said.
Australia benefited when people went overseas as they often came back healthier and refreshed and they were not using the Australian health system when they were away.
Council on the Ageing has also strongly opposed the cuts.
Chief executive Ian Yates said six weeks was “manifestly inadequate” for people taking the big trip to their country of origin to visit family, or ill or frail relatives.
“COTA believes this measure is excessively punitive and inequitable in its impact on Australians not born in this country and who maintain cultural and familial ties to their place of birth,” he said.
“As around 40 per cent of age pensioners were not born in Australia, the impact of the measure is likely to be significant and unfairly borne by one segment of our community.
“Australia has benefited enormously both economically and culturally from the contribution of migrants and it is a small price to pay to allow them an extended visit to their original home country without endangering income support entitlements.”
Mr Yates said COTA had unsuccessfully suggested the cut-off period be 13 weeks.
Paul Versteege from the Combined Pensioners and Superannuants Association described the changes as “a mean, penny-pinching measure” that should be buried once and for all.
