Pensioners’ poverty plight

On Monday night’s Q&A, Senator Jacquie Lambie claimed that one third of Australian pensioners are living below the poverty line and that in three to five years’ time, this number will rise to two-thirds.

Ms Lambie said: “We’ve got one-third of our age pensioners that are living below the poverty line. They’re saying in the next three to five years, that will be two-thirds and we’re an ageing population in this country. How sad is that?”

But is this statement a fact?

In order to confirm Ms Lambie’s claims, independent media outlet The Conversation launched a fact-checking investigation. These are the results:

In order to ascertain the extent to which Australians age pensioners are affected by poverty, a definition of poverty is necessary. The Organisation for Economic Co-operation and Development (OECD) released a report last year titled Pensions at a Glance 2015. In this report, the poverty line was drawn at 50 per cent of the disposable household income of the median Australian household. While the deduction of taxes is taken into account when assessing household disposable income, the cost of housing is not. Therefore, the OECD definition of poverty doesn’t include the benefit that many older Australians gain from owning their own homes. This is a benefit not afforded to many working-age Australians paying off a mortgage.

Ms Lambie told The Conversation that the OECD study “found that more than one-third of Australian pensioners are living below the poverty line.”

The report states:

According to the latest available figures, poverty rates of people aged over 65 were very high in Korea (50%), Australia (34%), and Mexico (27%). In contrast, the Netherlands and the Czech Republic have the lowest poverty rates: 2% and 3% respectively.

However, the figure of 34 per cent representing Australia’s portion of people aged over 65 in poverty includes the total number of Australians over that age – not just those receiving the Age Pension.

Broadly, the media outlet confirmed that Ms Lambie’s statement was factually correct.

But what of her claim that this number would rise to two-thirds in the next three to five years? The Conversation explored recent National Centre for Social and Economic Modelling (NATSEM) data, which showed that pensioner incomes are expected to rise. However, according to NATSEM, projections show that these incomes are unlikely to rise in tandem with the incomes of households (which better represent a median income) not receiving benefits.

In theory, it may be said that if pensioner incomes don’t rise as fast as the median income, the rate of Australian age pensioners living in poverty could rise as projected by Ms Lambie.

While these figures can provide projections of what might happen, The Conversation concluded that there is currently insufficient evidence that supports Ms Lambie’s second statement.

Are you feeling the Age Pension pinch? Do you think the Age Pension will ever be sufficient retirement income? Can you see yourself living below the poverty line (as defined above) in the future?


Related articles:
Australians living in poverty
Why do women retire poor?
One third of over 60s in poverty


Amelia Theodorakis
Amelia Theodorakis
A writer and communications specialist with eight years’ in startups, SMEs, not-for-profits and corporates. Interests and expertise in gender studies, history, finance, banking, human interest, literature and poetry.
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