Pension review recommended
Senate Inquiry finds a ‘significant minority’ of older Australians in financial distress and recommends a review of the base pension.
A Senate Inquiry into the cost of living pressures on older Australians has recommended a major review of the base pension and the indexation method used for calculating the pension rate.
The Inquiry found that a ‘significant minority’ of older Australians were living in financial distress, stating that the full pension “may be insufficient to maintain a basic, decent standard of living”.
“Consistently expressed in evidence was the overwhelming view that those most at risk of financial stress are single pensioners – especially women – receiving the full-rate pension and living in private rental accommodation,” the report said.
“Older people with severe disabilities or chronic illnesses and those in residential aged care are also particularly sensitive to cost of living pressures.”
The Inquiry noted that the predicted ageing of the population and downturn in labour growth over the next three decades had the potential to slow economic growth and reduce older Australians’ standard of living.
National Seniors CEO, Michael O’Neill welcomed the findings and the commitment to a review of the age pension
“The Inquiry’s findings confirm what every pensioner knows – that living on a pension has become almost impossible unless you have additional income,” he said.
“We look forward to working with the government over the coming year to develop an adequate, sustainable age pension for the longer term,” he said.
But the Executive Director of COTA Over 50s, Dr Geoffrey Bird said the report’s recommendations did not go far enough.
“The Committee has highlighted the plight of low-income single pensioners, especially women, but has fallen short of recommending, as a minimum, the increase we sought in the percentage rate for singles compared to couples,” he said.
“The recent pension increase of $9.40 a fortnight based on the CPI is a nonsense, because the expenditure patterns of seniors diverge significantly from the average basket of goods and services measured for CPI purposes.”
The inquiry recommended measures to increase in the level of superannuation contributions among Australians in part time, periodic and low-income as well as initiatives keep older people in the workplace.
The recommendations also included a Government review of the access and funding arrangements for concessional residents in residential aged care.