Whilst some people receiving the Age Pension can enjoy a decent standard of living, it’s a very different situation for too many other seniors, writes Joel Pringle.
10 June provided Australians with a chance to look back at one of our most significant contributions to social policy in Australia – the 110-year anniversary of the introduction of the Commonwealth Age Pension. It also provides us a chance to reflect on whether the Age Pension in its current form is meeting the needs of older people in our communities.
Australians have a proud history of punching above their weight. From sporting endeavours to the Hills Hoist, which led the rotary clothes line revolution worldwide, to the polymer note and social policy innovations such as loans for education with income contingent repayments, first introduced as the Higher Education Contribution Scheme (HECS).
However rarely do we acknowledge the significance of the introduction of the Age Pension in Australia, not only one of the first in the world, but certainly the first of its kind.
We might take for granted the fact that everyone regardless of their income levels in the past is eligible to receive the full Age Pension rate pending the wealth and income test.
In Australia, unlike most other Age Pensions around the world, earning a low-income, taking time out of the workforce for family or caring duties, or being a small business owner was no barrier to receiving old age pension assistance form government.
This principle was hard fought for by early Australian advocates for the Age Pension and enshrined in the Invalid and Old Age Pensions Act passed by our young Commonwealth Parliament on 10 July 1908.
The role and delivery of the Age Pension has of course changed significantly since then, most noticeably along the assumption that Australians could and would own their own homes by the end of their working lives. For those who didn’t there were government provided services to assist, including the public housing system providing subsidised accommodation, as well as public health services delivered in tranches at various stages.
Looking back on the Age Pension in Australia, it’s clear that it’s time to again review the adequacy of the Age Pension and indeed the retirement system as a whole in keeping people out of poverty. On even a cursory glance, it’s clear that the assumptions underpinning the Age Pension have not kept up with the reality of the changing economic landscape.
The problems with our housing system are well documented, including declining ownership and the high costs and insecurity of renting. We’ve never gotten around to properly integrating dental care into the public health system, with commensurate subsidies for affordability. We are pushing essential services such as Centrelink and My Aged Care online without considering the cost inhibitions faced by poorer households to maintain an internet connection.
The Benevolent Society looked at exactly that question in the research report The Adequacy of the Age Pension, which we undertook alongside our partners Per Capita and The Longevity Innovation Hub.
The research found that whilst some people can enjoy a decent standard of living whilst receiving the Age Pension, they rely on a certain number of life factors to go their way. For too many, for example renters, people with unexpected health costs and people who are single, it’s a very different situation.
This has recently been confirmed by the Organisation for Economic Co-operation and Development’s recently released figures showing that more than a quarter (26 per cent) of people aged 66 or over are experiencing poverty, which is about double the average of OECD nations.
Australia is a rich country, meaning that this situation is of our own doing. It’s a result of the choices we make as a community. The good news is that we can also make the decision to do better.
We have launched the Fix Pension Poverty campaign to pursue the recommendations of The Adequacy of the Age Pension report. The campaign is calling on our politicians to commit to:
- basing decisions on the rate of the age pension on evidence, adequacy and need – not on party politics
- providing free dentistry for people receiving the Age Pension
- increasing rental assistance by 30 per cent for couples, 50 per cent for singles and indexing to rental increases
- introducing a new broadband rebate to keep people connected to essential services
With our campaign supporters including National Seniors we’ve been visiting local communities to raise awareness of the issues faced by older people experiencing poverty and showing how we believe the Government could fix this situation.
We’re bringing together networks and groups of older Australians and their allies to build local Fix Pension Poverty campaigns to ask questions of their local representatives.
We were promised a Federal budget for older Australians, but received nothing for people on the lowest incomes, in the most need of assistance.
With communities getting organised around the issues faced by people on the Age Pension experiencing poverty, this might be our opportunity to reconfigure the Age Pension to today’s economy and reduce poverty.
Joel Pringle is advocacy campaigner for The Benevolent Society.
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