The Federal Government has acted on deeming rates after prolonged pressure from key groups representing older Australians.
Sunday’s announcement of a drop in deeming rates will affect about one-quarter of age pensioners, with single pensioners set to receive up to $804 extra a year, and couples up to $1053.
But what do key players and YourLifeChoices members have to say?
Social Services Minister Anne Ruston said on the Today show that deeming rates had been on her agenda since the May federal election.
She defended the department’s decision not to reduce the deeming rate to match official interest rates and did not address the call from the Greens for a Senate inquiry into how the Government sets the pension rates.
“The cost of living has never been higher,” Senator Ruston admitted.
“One of the things … that’s been out there in the public is that the overnight cash rate that the RBA (sets) is but one of the elements that are considered when you deal with the returns that you are likely to receive on financial assets. It is not the only one.
“We look at a whole basket of different assets that people might be holding their financial assets in and come up with an estimation that we believe accurately reflects what the people would be able to get in the marketplace today.”
YourLifeChoices member Betty said: “It’s better than nothing, but I still think it’s very, very poor. It could have been more. I was hoping for 0.5 per cent at least.
“If I’m to believe the forecasting for the next six months, the RBA will cut the cash rate by another 0.25 percentage points so we’ll be exactly where we were two days ago. We’re already losing money on the interest rates and the RBA will take away what’s just been given.
“Not only that, but I live in an aged care facility and when the last lot of indexation came through, I was to get about $4.60, but the DSS took $3.50, so I ended up with $1.10.
“She (Anne Ruston) is expecting me to be grateful for $1.10 increase each fortnight. I’d like to see how grateful she’d be with such a paltry increase.
“I think an independent body should decide deeming rates and they should be calculated at least annually. Four years between deeming rate changes is very, very poor. The last time they were changed I was earning five per cent interest. Now I’m barely breaking even.
“I could be more colourful with my comments, but I’ll leave it at that.”
Member Chrissy L said: “While it (the deeming rate changes) is a step in the right direction and I am pleased the Government has finally done something about this situation, I think it could have gone further and been more realistic regarding the cost-of-living pressures that pensioners and part-pensioners are facing. I will benefit about $7.50 per week – not sure I can stimulate the economy much with that, if at all. I think the time has arrived to look at an independent body to manage changes to deeming rates for fairer outcomes for pensioners and part-pensioners, instead of this kind of kneejerk reaction, after much pressure from seniors groups and individuals who have to live on these miniscule increases in their pensions.”
Member Greg wrote: I see that the deeming rates are going to be increased … I think it’s time that the Federal Government had a hard look at the full pension rate. It’s a matter of life and death.”
Deputy Opposition leader Richard Marles said on Sunday the changes were too little, too late.
“Pensioners today will feel short-changed,” he told Sky News. “We’ve seen five reductions in the cash rates since the deeming rates last changed.
“This is far too little, far too late. I think pensioners today can feel like this decision is a slap in their face. This is a government which is trying to balance the books on the back of pensioners.”
Treasurer Josh Frydenberg defended the changes as reflecting the fact some retirees are getting higher rates of return than bank deposits.
“We’re strengthening the arm of around 1 million welfare recipients,” he told ABC’s Insiders program on Sunday.
“What’s important to understand is – it’s not a linear equation between or comparison between the cash rate and the deeming rate, because the deeming rate applies to a whole suite of assets.”
The Council on the Ageing chief executive Ian Yates said the announcement was welcome news, but noted that it would not affect 75 per cent of age pensioners.
“Those calling for the full cut in the cash rate to be applied to deeming need to be honest about how many pensioners are affected, and about the fact that if the Government replaced the deeming rate with actual earnings, the majority of part pensioners would be worse off,” he said.
“We appreciate the frank and constructive discussions we have had over the last week with relevant ministers in the Morrison Government and the positive outcome that has resulted.”
Are you happy the rates have finally been adjusted? Do you think they should be adjusted more regularly? How should this occur?
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