SEPTEMBER 20 will see an increase in the age pension - how much is not yet known - but the rise is guaranteed to be small change.
A year ago this month Australia's oldest charity, the Benevolent Society, described the Australian age pension as inadequate and recommended the establishment of an independent age pension tribunal charged with setting a fair pension, taking into account relative living standards and needs of pensioners, as well as the broader fiscal climate.
The tribunal would review the rate every six months.
This has not happened.
The federal government continues to use one of two measurements to determine the twice-yearly increase - the consumer price index or the pensioner and beneficiary living cost index whichever is greater. They are then "benchmarked" against a percentage of male total average weekly earnings. The combined couple rate is benchmarked to 41.76 per cent of MTAWE; the single rate of pension is set at 66.33 per cent of the combined couple rate (about 27.7 per cent of MTAWE).
However, this formula doesn't allow for any increase in the living standards of age pensioners as it merely maintains their financial status quo.
The last increase in March saw the age pension increase by $11.40 per fortnight to $888.30 for a single and $8.40 per fortnight to $669.60 for each member of a couple. These figures include supplements.
In September 2016 the increases were $3.30 and $2.50 per fortnight respectively, while in March last year the increases were $6.90 and $5.20.
The Benevolent Society's report was scathing of the age pension.
"It fails to provide a decent standard of living for approximately 1.5 million older Australians who rely on it as their main source of income," it said.
"Some pensioners are taking drastic measures in order 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."
An assessment of living standards showed that many people on the age pension lived at such a low standard it was "undignified, insufficient and inadequate". Many who relied solely on the age pension were living in poverty, particularly those renting in the private market.
Other recommendations in the report included:
- Increasing the maximum rate of Commonwealth Rent Assistance to reduce the gap between age pensioners who are home owners and those who are renters and indexing this to housing costs instead of CPI to more accurately reflect changes in costs faced by renters in specific geographical areas, particularly in metropolitan regions - for example, Sydney v AlburyWodonga.
- Providing nationally standardised Medicare funded dental care to all full pensioners.
- Running an awareness campaign of government schemes that subsidise or reimburse costs associated with non-pharmaceutical health expenses, such as 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.
- Providing a specific broadband or internet-related supplement or rebate.
Peak body the Combined Pensioners and Superannuants Association would like to see a full review of all social security payments with a view to ensuring the rate of payment is enough to live off.
"There is real disconnect between what the government seems to think pensioners can afford and what we hear from our members, with aged care fees being a prime example," said policy co-ordinator Ellis Blaikie.
"Many pensioners simply cannot afford the $10 per day it costs to get a home care package and are left unsupported as a result. It's just not good enough.
"That's not to suggest that social security payments should fund a lavish lifestyle, but payment recipients must be able to feed, clothe and house themselves. It's a question of dignity.
"The world has changed a lot and we are increasingly expected to open our wallets and pay for things that the government has traditionally provided for free.
"Retirement is changing and it's time to consider whether the age pension should change too."
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