single Age Pension, couples Age Pension, entitlements, cost of living

Single versus couple pension payments:

Are they fair?

When there is a widely experienced cost of living crisis, it’s only natural to have concerns about whether your income is keeping up with the increases. It’s also fair to ask, as a single or couple recipient of an Age Pension entitlement, whether your fortnightly payment is fair.

Today we look at how single payments and couple payments are calculated and what this means when it comes to covering basic household expenses.

How the single v. couple equation works

It’s no mystery how the Age Pension is calculated depending upon the nature of your household.

The Age Pension has three main ‘parts’:

  • base rate
  • supplement and
  • energy supplement

which add together to create a fortnightly total.

The current fortnightly rates of payment and how they correspond are:

Base rateSupplementEnergy supplementTotal
Couple combined (i.e. x 2)$1464.60$118.20$21.20$1604
Single as percentage of couple combined66%66%66%66%

Swings and roundabouts

Based upon the above, the theory is that a single household needs two-thirds of the combined couples income to fairly cover costs.

In a sense, this is a ‘ swings and roundabouts’ theory. On certain items, singles will pay exactly the same as two members of a couple each. For instance, for a holiday airfare each passenger is charged the same amount for the same fare, so a single may pay, say $180 to travel Adelaide to Melbourne whilst the couple combined pay $360 for the shared journey. Similarly, with groceries, if a meal costs $22 in ingredients for a single, the combined couple cost could be around the $40 mark. So it seems the practice of a single receiving 66% of a couple combined means that a single is coming out ahead, if they are paying ‘half’ the cost on travel fares or groceries etc., and not two thirds.

Or maybe two can live a cheaply as one?

But then there are outgoings where two do seem to live as cheaply as one. For instance electricity for lighting or appliances, etc. A household electricity bill could be about the same amount for a single household as it is for a couple household (depending upon individual usage of course). When it comes to travel, single supplements are rarely offered, so couples can pay the same rate for a room (combined) as does a single. This is when a single might begin to feel aggrieved. Similarly, the running costs of a car for a couple could be close to those of the costs of a car owned by a single, so it could seem that singles are disadvantaged in these expenditure categories.

Which other categories might vary? 

The Australian Bureau of Statistics  lists 10 main categories of household expenditure, and each one (with the possible exception of medical and healthcare) might be seen to be a plus or a minus for one type of household or the other:

  • Housing
  • Domestic fuel and power
  • Food and non-alcoholic beverages
  • Alcohol and tobacco products
  • Clothing and footwear
  • Household furnishing and equipment
  • Household services and operation
  • Medical and healthcare
  • Transport
  • Communication

You can run your own check on each of these categories and see if you think the government’s decision to ‘split the difference’ by making the single pension payment 66% rather than half that of a combined couple household is fair. Many singles will believe it should be an even higher percentage based on the old saying that two can live as cheaply as one. 

Everyone has a perspective on this matter and we’d be delighted to hear your views, based on your own experience of covering household expenses as a single or one of a couple. And don’t forget to tell us if the percentage for singles should be different …

And one more thing.

Decades ago the definition of a couple was clear cut. They were married. At least that was generally how the law and the public service saw things. But now the definition of ‘couple’ is much more flexible. This means that it is up to you to fully understand whether your status is single or one half of a couple when dealing with government services. Here’s a handy link to an article which explains the detail.

Not sure of your own entitlements? Here’s our free Age Pension Entitlement Calculator so you can quickly determine your status.

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