Monday, 11 August 2008

Govt considers payment increase for 'vulnerable' pensioners

The Federal Government is considering increasing its payments to single pensioners after a discussion paper found they are particularly vulnerable to cost of living pressures, with many possessing limited assets.

However, a decision will not be made by the Government until after next February, when the results of a review by the Department of Families, Housing, Community Services and Indigenous Affairs into pensions will be handed down.

Today's discussion paper, released by Community Services Minister Jenny Macklin, has found those on the single aged pension are on a lower rate compared to other developed countries.

The single pension rate sits at 60 per cent of the combined couples' rate at $273.40 a week. Couples receive $456.80 a week.

The report found in a comparison with 11 other OECD countries, Australia sits under the average of 63 per cent.

In other countries the single aged pension as a percentage of the pension for couples ranged from 57 to 75 per cent.

The report also says there are more than 2 million older Australians - about 80 per cent of those over 65 - who are dependent on aged pensions, with more than half of those on a "very, very low" additional private income of around $20 a week.

It also found that around 30 per cent of pensioners have a bank balance of less than $1,000 and pensioners, including those on disability payments, have been receiving benefits for around 11 to 13 years.

"Not only are many, many Australians on low levels of income, they are on these low levels for a long period of time," Ms Macklin said.

"What this demonstrates to us is that it's very important that we get the maximum rate of income support at a level that enables people to have a reasonable standard of living."

Ms Macklin has promised the Government will respond quickly to the review's recommendations when it reports in February as to whether it will make increases to the amount paid to pensions.

"We understand that money will need to be spent, but it's important that we get this right because such a significant number of people are dependent on these pensions," she said.

"That really is a matter that will be worked through in the first instance by the review as they make assessments about the best way forward."

The review is accepting submissions until September and will hold a number of public hearings around the country.

The review taskforce is also working closely with the Henry review into taxation, which is also examining pensions.

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