Pensioners nearing the poverty line > Check the facts
The Government intends to change the indexation of the Age Pension from September 2017. If their legislation passes through the Senate, the pension will be indexed to the Consumer Price Index (CPI), (the same as Newstart). At the moment the pension is indexed to the higher of the CPI, the Pensioner and Beneficiary Living Cost Index or Male Total Average Weekly Earnings. The latter has tended to increase faster than CPI in recent decades.
The higher indexing of the Age Pension compared with Newstart has seen an increasing gap between the two benefits, with Newstart recipients experiencing greater disadvantage. There is also a disadvantage amongst pension recipients, depending on an individual or couple’s housing circumstances. The full pension payment received by home-owners is more than 50 per cent above the poverty line, whereas renters only receive between 15 per cent (for individuals) and 16 per cent (couples) more than the poverty line income.
Unemployment benefits have been trending downwards relative to the poverty line since 1992. At June 2012, Newstart payments were 20 per cent below the poverty line. Indexing the Age Pension to the CPI will mean a similar impact on age pensioners. The gap to the poverty line of between 15 and 16 per cent for pensioners who do not own their own home means they can expect to find their benefits falling below the poverty line a decade after the planned change in indexation.
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
‘No one left behind’: Why doesn’t the Wellbeing Framework measure poverty?
According to Treasurer Jim Chalmers, the new Wellbeing Framework “helps us put … fairness and opportunity at the very core of our thinking”, but (astoundingly) lacks any substantive measure of poverty.
Poor policies stopping our fair go
The government must change its stance on stage three income tax cuts and JobSeeker before it’s too late.
Bringing in the Budget | Between the Lines
The Wrap with Richard Denniss Budgets, like life, are all about priorities. It’s easy to talk about all the things we can do, but it’s harder to decide where we’re going to channel our efforts. And as in life, sometimes the hardest part of prioritising is telling other people that their priorities aren’t yours. On