Energy prices hit pensioners hard

Householders’ income spent on energy in Australia is surging, according to new research commissioned by the Australian Council of Social Service (ACOSS) and the Brotherhood of St Laurence.

The analysis, conducted by the Australian National University (ANU), investigated the burden of electricity and gas costs for a range of household types in Australia between 2008 and 2018.

The research found some of the lowest income households in Australia spend more than 10 per cent of their incomes on spiralling energy costs. Meanwhile, more affluent households spend significantly less of their income (1.5 per cent) on energy.

Those households whose main source of income is either pensions (such as Age Pension or Disability Support Pension) or other government benefits (such as Carers Allowance) are also spending more of their income on energy. With one in four households on pensions spending more than six per cent of their income on energy, and one in four on ‘other government benefits’ spending more than eight per cent of their income on energy.

Single person households (many of whom are reliant on pensions) spend a higher proportion of their income on electricity and gas than many other household types.

The research also showed that the gap between low and high-income household spending on energy costs has also widened since 2008.

The ACOSS research mirrors the results of YourLifeChoices’recent Retirement Matters survey, which found energy costs were rated as the biggest drain on the savings of retirees.

ACOSS Chief Executive Officer Dr Cassandra Goldie said: “This analysis confirms once again that people on low incomes are doing it the toughest, spending more of their income on the bare essentials.

“Having to pay more of their income on energy is a slap in the face for households already struggling with increasing costs of living, slow wage growth and unemployment.”

Damian Sullivan from the Brotherhood of St Laurence said the rising cost of energy could be potentially fatal for older Australians as we head towards the summer months.

“On those very hot summer days, we know some older people in poor health who need cooling will go without it, just so they can afford to pay their bills,” Mr Sullivan said.

ACOSS and the Brotherhood of St Laurence say policy solutions need to focus not only on reducing energy prices, but also on reducing the size of energy bills and improving capacity to pay for vulnerable households.

Read the full report.

Are you finding it hard to meet the rising cost of energy? Should the Government do more to help pensioners and those on fixed incomes to pay their energy bills?

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Written by Ben

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