THE age pension fails to provide a decent standard of living for about 1.5 million people who rely on it as their main source of income.
In its new report The Adequacy of the Aged Pension in Australia, independent think tank Per Capita says some pensioners are taking drastic measures to make ends meet.
“They are turning off hot water in summer, blending food because they can’t afford a dentist and choosing between food and medication,” the report says.
The financial wellbeing of age pensioners, it says, depends on their specific circumstances, including where they live, whether or not they are single, their sex, and whether or not they own their own home, with home ownership the single biggest factor contributing to financial hardship.
“Age pensioners who are renting, in particular those who are single, are the worst off,” the report says. “Many of these are women without super-annuation or other savings.”
The report calls for urgent measures to “redress the profound levels of deprivation experienced by this group of pensioners” and to ensure all older people living on the age pension can “experience a decent standard of living that is commensurate with the relative wealth of this country”.
Among the report’s recommendations are increasing the maximum rate of commonwealth rent assistance to reduce the gap between homeowner pensioners and renters, and indexing rental assistance to housing costs instead of the CPI to more accurately reflect rent costs in specific geographical areas.
It also calls for nationally standardised Medicare-funded dental care for all full pensioners and a broadband, or internet-related supplement or rebate.
Other recommendations are:
- Introducing an awareness campaign of government schemes that subsidise or reimburse costs associated with non-pharmaceutical health expenses – for example, medical disposables associated with diabetes and incontinence.
- Co-ordinating or replacing state-based utilities rebates for pensioners to prevent utility costs rising as a proportion of pensioner expenses.
Rise a ‘slap in face’
“Outrageous and a slap in the face” is how one advocacy group has described the latest age pension increase.
“You start to wonder where compassionate leadership is going to come from,” said Fair Go For Pensioners vice-president Lew Wheeler. “What can you buy with a $1.65-a-week increase? In wealthy Australia it is absolutely appalling.”
More 2.5 million people on the age pension received an increase in their payment rate of between $2.50 and $3.20 a fortnight from September 20.
A further 2.2 million recipients of other payments including disability support pension, carer payment, Newstart allowance, widow allowance, partner allowance and sickness allowance also received an increase.
Adult pensions are adjusted in March and September. The increases are linked to prices and wages, while allowance increases are linked to the CPI. Pensions are adjusted using whichever of the Pensioner and Beneficiary Living Cost Index or the Consumer Price Index produces the higher result.
This result is then compared to the male total average weekly earnings benchmark. If this benchmark gives a higher pension increase, it is used to adjust pensions.
Rent assistance and other supplementary payments have also been increased using these figures.
“We know that each increase makes a big difference to helping recipients cover cost of living,” said Social Services Minister Christian Porter.
However, Ms Wheeler said the increase “just shows how frugal the Australian pension really is”.
“We’re second last in the OECD,” she said. “Many pensioners are living in income poverty, our homes are falling down around us and single older women are the worst off.”
- Click HERE for the full pension rate break down.
