Are retirees doing it tougher?
As you are well aware, Election 2022 is underway.
Claims, counter claims, promises and allegations are flying thick and fast.
And during the past two weeks we have seen two older men (Ray from Newcastle and Fred from the Hunter Valley) step up and claim to speak on behalf of other retirees, asking both the Prime Minister and the Opposition Leader about what they will do specifically to improve the lot of older Australians.
Which raises the important question, are pensioners really doing it tougher than other sections of society?
In order to properly evaluate this suggestion, let’s look at the facts.
According to the most recent data from the Australian Bureau of Statistics (ABS May 2020 ) there are 3.9 million retirees in Australia.
According to Treasury’s Retirement Income Review (RIR, published November 2020), 65% or 2.5 million people are on an Age Pension, 3% on a Department of Veterans Affairs (DVA) pension and another 3% on a Disability Support Pension (DSP), carers payment or special benefit. Thus 71% of people of Age Pension eligibility age receive some form of income support. The Retirement Income Review (RIR) also noted that the cost of providing this support remained ‘relatively stable’ at 2.4% of GDP.
The current Age Pension payment rates are:
- Single, Full pension, including supplements – $987.60 per fortnight
- Couple, Full pension, including supplements – $744.40 per fortnight, each
(Rental supplements may also apply)
By comparison, the current rates for those out of work, on a JobSeeker allowance, are:
- Single, no children – $642.70 per fortnight
- Single, over 60, out of work 90+ days – $691.00
- Couple, no children – $ 585.30 each per fortnight
Many older Australians are forced into retirement before they reach Age Pension age. Ill health, caring responsibilities and loss of a job are common reasons. People in this situation are often forced to fall back on JobSeeker. There has been extensive coverage of the fact that the Jobseeker payment means recipients are below the poverty line, calculated following the OECD method, as half the median household income of the total population. For a single adult, this is $426.30 per week, or $852.60 per fortnight. The Australian Council of Social Services (ACOSS) estimates there are currently three million Australians living below the poverty line.
It is therefore fair to say that, as tough as some pensioners feel they are doing it, they are at least earning more than those below Age Pension age who are seeking work.
However, it is noted in the RIR that those who own a home are in a much more privileged position that those who do not:
‘The retirement income system does not appear to be delivering an appropriate standard of living for many retiree renters. Owning a home has a positive influence on a person’s standard of living in retirement. Whereas, in retirement, renters have higher levels of financial stress. A significant proportion of retiree households that rent are in income poverty, which is even higher for single retiree renters.’
The previously reported March 20 pension increase was 2.5% and will now almost definitely be well below annual inflation, on which we will have an update on April 28.
So it is fair to conclude that Ray and Fred had a point, and those on an Age Pension are not keeping up with the rising cost of living.
On the earnings side, things are also grim.
Planning retirement income used to be much easier, with a 5% return rule commonly used by financial advisers and accountants. But it’s stating the obvious to say that those days are long gone. The current official cash rate of .01% means that most banks are only paying less than 1% on cash deposits. Again, this is not even close to inflation increases. Money invested in cash is, in most cases, shrinking.
And then there are the particular needs and challenges of those pensioners who are on a Disability Support Pension (DSP) or those with special medical or care needs.
As with any generalisation, it is inaccurate to state that all Australian Age pensioners are doing it tough.
But those on a full Age Pension who are renting are no doubt wondering how they will ever cover all their bills.
What do you think?
Are you doing it tougher than other members of society?
If so, what is the answer?
Should an increase of the Age Pension be a priority, particularly for renters?
Or is a base rate increase for all the needed action?
And if you haven’t sorted out your Age Pension entitlements you might be doing things much tougher than you need to.
Our free calculator has all the latest rates and thresholds and will help you work out what you could be entitled to receive.
Politicians believe that self funded retirees are the wealthy people in our society. Just have a look at the “assistance “ provided to this group since the pandemic. 2 payments of $750 each while my mate who was working received $750 pw when he normally received $200 for his part time job.
And ditto for many thousands of others. My wife and I have an income of less than K$10 per annum but not entitled to the age pension as we exceed the assets test. Thanks to RBA gov, (on a million bucks a year), over the last 5 years or so have received 0 interest on our cash component.
I was the stupid one that worked 2 jobs, my wife stacked shelves at woolies till midnight, so that when we paid off the mortgage, we could save so we would not have to rely on the pension in retirement. The federal treasurer informs me that there are other investments paying above the cash rate. Yep, sure are – but have a look at the market today. Takes years for the market to get where it was yesterday and today, you lose a huge chunk of it.
And while politicians shower themselves in one of the best super schemes on the planet, funded by the taxpayer, I’m going through recycle bins picking up cans and bottles.
I buy a carton of beer and are subjected to 3 layers of tax – federal excise indexed twice a year, a state tax on the container, and to top it all off, GST on the two taxes. I pay $1500 a year in rego charges on two cars and my van and then get billed with tolls everywhere I go.
I pay stamp duty on my house insurance then GST on top of that. – go figure. The State Treasury tells me “it’s been the states long term policy to levy stamp duty to pay for government “. Really, would you feed this mob?
Fortunately, The only thing I get from this lot is the health card.
As I said earlier, I’m an idiot. If I spent every dollar I earnt while I was working on grog, gambling, overseas trips etc I’d be on a full pension of $1500 pf according to your article. That’s K$35 a year. Bit better than my K$10.
Anyway, I’ve ranted on enough but my closing comment is that is it any wonder that the majority of the electorate has nothing but contempt for politicians.
If you are a self-funded retiree (that is, you bought the message years ago about saving and paying for your own old age) then you are, even in this article, ignored!
well L am stuck overseas, centre link cut me off my age pension in 2019, after advising me its fine to remain overseas, and then they changed their mind?? I have no investments, no income and living in a basic rented room in a very poor area of town my room is rat infested , just pulled a part of the ceiling away to place rat trap as they keep me awake at night. stray dogs and cats always fighting outside and nearby. . l,m living on handouts right now. so Anonymous (message above) , You think your doing it tough?? . l appealed to the AAT, 3 TIMES, l also SENT 3 EMAILS TO centre link asking them to provide me with the proof I,m not able to stay overseas and receive the pension , . Not even an answer from them…., because they do not have the proof. they are just hoping I will give up, and they fob me off. lt was so stressful dealing with them.they made numerous mistakes in their advice for my travel, and mistakes from the very start. In their review of my case they admitted there may have been mistakes ….. Anyone can understand whats really going on, with the rising aging population in Australia, and their mismanagement with the pension funds , they will do whatever they can to make it difficult to receive the pension. lts disgusting when they gave me their final analysis of why they will not pay me. key points. I do not own my own home, l did not run a business in Australia in the past. , and most of my family members have passed away??? really. If anyone cares to research , they will find thousands and thousands of complaints about the lies , and disinformation and computer system problems centre link has. l really think centre link has been outsourced and run as a corporation. l was reluctant to travel back to Australia as the CV , mandates, quarantines and where to live ?? without funds how to do that?? And then how to survive once there?? And a lawyer , how to pay. Only Australia treats its pensioners this way. they do not inform when one is due for a pension, what is necessary, and the rules etc. they just hope people do not apply , and if they do they will make it so hard. . whilst in UK, its automatic when you get to pension age your informed. . Corporation Australia. centre link staff have been given a script , ” do whatever you can to deny the pension” i hope You can address this non sense . thank you. keith.
i have been retired since October 2021 i alone receive 744.40 my wife gets’ nothing but she has had to get job seeker payments even though she is unable to work according to the chart that you have shown the 744.40 is stated as each does that mean that the payment is split between the two of us or that the wife is supposed to get 744.40 as well if she is not entitled to anything then why are we penalized to live of a reduced pension witch would mean that the two of us have to live on 372.20 each , it seems ironic that i have worked for 50yrs payed my taxes and have the government tell me that i am only entitled to a part pension, maybe the polititions need to realise that the pension is my money earned and payed over 50yrs i am only getting back what i payed for yet the government decides that we should get part payment while they line there pockets with the money left over
Hi Harold. The full age pension rate for a couple is $1,489 a fortnight. It looks like you are receiving half of that. If your wife is receiving Job Seeker it would appear she might not yet be of Age Pension Age. If that is the case then once she reached Age Pension age she would receive the same as you i.e $744.50 each. You cab check all the pensions rates here.
As mentioned in the article, Age Pension payments are Income SUPPORT, not something that has been earned over years of paying tax. That tax paid during working life covered costs associated with running the Country then; Defence, Health, Roads, etc, etc. Pensions that are being paid by the Government today are being paid for by the Taxpayers of TODAY – your children and grandchildren and me. If you don’t qualify for a pension because you don’t pass the Asset Test, divest yourself of some assets, simple! Why should I be working hard to pay for your carton of beer? Come on people… let’s face it. The current Age Pension is a substantial payment and is not supposed to cover anything more than the basics. If you want holidays, beer, chocolate biscuits, etc in retirement, then they should have been saved for (like I am now) prior to finishing work. Add the cost of your heavily subsidised pharmaceuticals, electricity, rent (yes, Renters get extra Rent Assistance too), rates, rego and dozens of discounts working folk/tax payers don’t get…..you are on a pretty good wicket!
That statement is incorrect , years andvyears ago a levy was imposed on top of taxes to pay for pensions.
The various govt have all raided this public pension fund.
So no the pension is not income support, this is something the LNP had started by calling it welfare. It is neither. It is a due to all over the age of 60 plus as of now.
You really need to check your facts. What you are referring to is something that was around in the 1940s…some time before you started working, I would think. You may like to peruse the following Australian Parliament House website link
https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp2122/NationalWelfareFund
which will prove you are incorrect and confirm my comments. People aged 60 plus have no entitlement unless they have had the foresight to contribute to superannuation and provide for themselves. Otherwise, I’m sorry, but you are reliant on welfare paid for by current Taxpayers!
We, as self funded retirees should not have to worry about voting, why should we take the time to go to the polling booths to vote for someone who totally ignore us. We get nothing from any form of govt. no $750. no handouts. Very little interest on our savings. Because I inherited a block of dirt from my late mother I don’t qualify for a pension. It seems I would have to eat the block of dirt first. Trying to get a carers allowance and have supplied the same answers as requested 3 times now and still being stuffed about. I think most people who work in centrelink obviously have no brains and are happy without them.
the elderly were shafted in the stimulous package by about $6000 less than people on the dole.
A single person on the dole got nearly $200 more /fn than pensioners plus over$700 cost of living compared to pensioners $200.Thecost of living concession used to be on coucil rates and the govt changed it to cost of living increase yet it has hardly increased since its inception.However now everyone except pensioners are getting it and more than pensioners.What about people who have a mortgage ,How are they better off than rentees after all they get no subsidies and on top of that pay thousands to councils for council rates.How much do renters pay in council ratesThats $100/month i have to put away for rates not to mentionnow weare forced to own a mobile phone and nbn with no compensation from the govt Thats another $40/fn