Australian Age Pension turns 110 years
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.
The occasion also provides 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 income contingent loans for education (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 a young Commonwealth Parliament on 10 June 1908.
The role and delivery of the Age Pension has 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 Myagedcare online, without considering the cost inhibitions faced by poorer households to maintain an internet connection.
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 OECD, that 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.
The Benevolent Society has 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:
- Base 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% for couples, 50% for singles, and indexing to rental increases
- Introducing a new broadband rebate to keep people connected to essential services
With its campaign supporters, notably National Seniors, The Benevolent society has been visiting local communities to raise awareness of the issues faced by older people experiencing poverty, and showing how it believes the Government could fix this situation.
The campaign so far has focussed on strategically important electorates in Central Queensland, Northern NSW and South Australia. It 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.
There’s a Federal election approaching, and with the ageing demographics, the concerns of older Australians will increasingly be a part of it. 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.
12 July 2018.