Pension increase March 2019: Political whims leaving seniors in extreme poverty

The increases, which come into effect later this month, while welcome were hardly cause for celebration, said National Seniors spokesman Ian Henschke.

“A single older person reliant on the pension survives on an annual income of around $24,000; a couple around $36,000. We know many people in this situation are struggling." 

The increases would not "relieve the extreme poverty faced by some age pensioners - especially women and those who rented".

These two groups were among Australia's  poorest people, usually because of circumstances beyond their control, he said.

“More than half a million people rely on the pension as their sole source of income.

"While overall inflation is low, the cost of essentials such as health, housing, transport and energy are increasing rapidly.

“It’s time to take the politics out of the pension. The well-being of older Australians shouldn’t be determined by political whim." 

Mr Henschke said while many older Australians owned their own home, around 15 per cent did not. For a variety of reasons some older people had not been able to secure the Australian dream and were forced to seek shelter through the private rental market.

“Unfortunately, that market is often unaffordable. Rental costs have increased significantly over the past 10 years. While rents increased 29% over that period, Commonwealth Rent Assistance increased by only 23%. This exposed older people to higher costs, lower living standards and increased risk of homelessness.”

Mr Henschke said National Seniors was also calling on the government to reinstate the indexation of the energy supplement to assist pensioners and other low-income retirees to pay for escalating energy prices.

“Pensioners continue to be the hardest hit by ever-increasing energy prices and this not only impacts their capacity to keep warm in winter and cool in summer, but the capacity to spend on other essentials such as food, clothing and shelter,” Mr Henschke said.

National Seniors has joined with the Benevolent Society on its Fix Pension Poverty campaign. 

Joel Pringle, advocacy campaigner at Fix Pension Poverty said: "The age pension is indexed with the intention that the base rate keeps up with the cost of living, but it fails in regards to people stuck in private rent.

"They’ve seen rents go up above the age pension over recent years and it’s no accident this has coincided with increased homelessness for many, particularly older women.

"Being stuck in private rent is the biggest indicator of poverty for older Australians. If the Government continues to ignore older people stuck in private rent then the age pension will keep failing poverty amongst older Australians."

The increases to the age pension, effective from March 20, bring the payment to $926.20 per fortnight for a single person and $1396.20 for a couple combined, inclusive of pension and energy supplements.

Those older Australians on Newstart and certain other allowances (and younger ones) fared even worse in the latest round of increases.

Single recipients of newstart allowance, widow allowance and sickness allowance will receive an increase of $5.50 a fortnight to $564.50 including energy supplement. Members of a couple will receive an increase of $5.00 a fortnight to $509.60 each, including energy supplement.

The inequality has prompted sharp criticism from the Australian Council of Social Service.

‘’While the pension rose by $4 a week for singles, the Newstart Allowance rose by $2 a week – half as much," said ACOSS senior adviser Dr Peter Davidson.

“Almost half (45 per cent) of people on Newstart are 45 years of age or older, and more than two-thirds have to rely on that payment for more than a year.

“The gap between pensions and allowances keeps growing, yet people on Newstart don’t have lower housing costs, fuel costs, or electricity bills.

“These are some of the reasons ACOSS is calling for an urgent, $75 a week increase in Newstart and other allowance payments for single people."

Announcing the increases Social Services minister Paul Fletcher said "Since this government came into office the age pension has increased by $117.80 per fortnight for single pensioners and by $177.40 per fortnight for couples combined."

Pensions and allowances are adjusted twice a year, in March and September. Pension increases are linked to prices and wages while allowance increases are linked to the Consumer Price Index.

Rent assistance rates also increase from March 20, as well as a range of income and assets limits for pensions and allowances. This includes higher limits to the income and assets tests for age pensioners.

Full details: https://www.dss.gov.au/benefits-payments/indexation-rates-march-2019