How over 55s would fix the pension

On Friday, we asked our members a few questions about how they would fix the Age Pension system and how they would tweak Centrelink payments to be fairer for everyone.

Unsurprisingly, the poll was one of the most popular for the year, with 2224 responses and comments ranging from inspired to downright angry.

Of those who responded to the poll, 55 per cent were male and 45 per cent were female, the majority of whom were aged between 60 and 79.

Most respondents were on a part-Age Pension (30 per cent), with 22 per cent on a full Age Pension and 26 per cent saying they were fully self-funded. Only one per cent said they received Newstart payments.

Just over three in four (77 per cent) fully own their home, with 11 per cent still paying off their mortgage. Seven per cent of respondents were renters and four per cent live in retirement villages, aged-care facilities or in public housing.

Despite the low number of respondents who receive Newstart payments, almost half of all those surveyed said a $300 per fortnight boost to Newstart is fair (47 per cent). Only 24 per cent said it was unfair and 30 per cent said they were unsure.

“One thing to consider is Newstart recipients cannot save money, it all gets spent helping investors with rentals (paying rent), helping supermarkets get richer (buying food), helping energy investors (buying power) helping telcos get richer (phone and internet costs, without these you have no hope of even applying for jobs), so in fact all their money is being reinvested into the economy, and will help a lot of people who own business. And don’t start on the drugs, alcohol, smokes thing; only a small percentage are like this,” wrote YourLifeChoices member musicveg.

Least surprising was the small number of people saying a paltry $11 per fortnight boost to the Age Pension was enough to reduce the pension poverty gap. Just six per cent were in agreement with the meagre raise and a whopping 84 per cent said it was not enough.

“So, pensioners who have paid taxes all their life get an $11 increase, Newstart recipients get $300 but the average worker, if they are lucky, might get a 50-cent increase a fortnight/week, every so many years after taxes. Seems about right – NOT!” wrote Ted Wards.

When asked how much would be enough to reduce the pension poverty gap, 18 per cent said $51-$75 would suffice, with the same number saying between $101 and $150 would be better. Around 14 per cent believe $76-$100 would be enough. Just five per cent don’t believe there is a pension poverty gap – most of whom were fully-self funded retirees.

As for helping renting age pensioners, 61 per cent believe a boost to Rent Assistance is well in order.

We also asked our members which group most needed an increase in their payments. Over half of respondents think age pensioners need the boost more, with 26 per cent saying it should go to Newstart recipients, followed by disability pensioners (eight per cent), renters (seven per cent) and carers (six per cent). Many think that everyone deserves an increase.

One suggestion some commentators say would make the pension fairer is including the family home in the assets test. While it has not been an issue raised by any political party lately, we wanted to know if you thought it was a way to level the pension playing field.

A whopping 81 per cent said no, with just 15 per cent saying the family home should be up for grabs.

If the family home was to be included in the assets test, 29 per cent said a threshold should be set between $1,000,001 and $2,000,000, with 14 per cent saying it should between $2,000,001 and $2,500,000, six per cent saying between $2,500,001 and $3,000,000 and only five per cent saying the threshold should be set at over $3,000,000.

“I believe that there is something wrong when a person with $1,000,000 in assets can get the full pension when another person with the same amount gets no pension just because the assets are different – the first has a $1,000,000 house, the other has $1,000,000 cash in the bank. So, increase the asset test amount significantly (by an amount ‘equal’ to a house) and then include the home in the test. This way ‘downsizers’ are not penalised and those with the same total value of assets are treated the same,” wrote KeWi.

Jackie agrees: “Pensions should be for the poor not people that own properties worth over a million dollars, super and more.”

When asked who should foot the bill for any Centrelink payment increases, 57 per cent said the best source of funds would be from a crackdown on corporate tax evaders. The second most popular response was syphoning from politicians’ pensions and wages. Seven per cent said it should come from increased taxes on the wealthy, six per cent said taxpayers should pay for it and just three per cent said it should come at the expense of other Centrelink payments, as was suggested by the Australian National University’s Centre for Social Research and Methods.

“This country would be better off if all bloody governments were to chase the ‘big’ tax evaders for the money sent offshore to avoid paying their fair share. If money is made in Australia then taxes should be paid in Australia regardless of where their headquarters are. There are several pollies who are avoiding paying tax here also, if one believes the rumours,” wrote Ronioby.

Through your comments we discover how older Australians really view the pension system and retirement in general. So, we’ve included some other suggestions and opinions from our members, that may provide further food for thought.

“The article question was “How could the Government fix the pension system”. The answer is: “Universal Age Pension without any tests except age (65) and residency (say 15 years),” suggested GeorgeM.

“Increase the asset threshold for pensioners. It’s way too low. It should be at least $600k. You see? We’re encouraged to put money into our super only to find that some of that money ($3 x every $ 1k) is taken away from us when we’re over the existing meagre threshold. That would reward those hard-working Aussies who worked, paid taxes and saved some super to build a better retirement nest,” wrote Blinky.

“People with mortgages receive no help, no rent allowance, no help with insurance or repairs. They are worse off than young people on Newstart where maybe three to four share a house and each get rent allowance, which would cover the total amount due,” wrote YourLifeChoices member Dabbydoos.

“We need a strong pension system. We also need to reward work and responsible living. The only way to do that is to stop beating up on people for striving to be as self-supporting as possible. Unfortunately, both parties are currently doing the same thing – greedily buying votes by appealing to the selfish and pretending it’s somehow ‘fair’ to take from people who don’t rely on taxpayer support.

“We do have different classes of retirees. On the one hand, we have SFRs who’ve had a lucky run, and on the other we have SFRs who have successfully battled extreme hardship. We have SFRs who are very well off and SFRs who are really struggling not to drain their savings too quickly. We have pensioners who have had very little opportunity to be anything but pensioners, and we have pensioners who could be self-supporting but chose to spend up in their working life and rely on the taxpayer later. We have folk who had good super and folk who didn’t,” wrote OnlyGenuineRainey.

“I believe a good way to help pensioners would be to exempt them from GST – just pay the basic price of everything,” wrote Moke.

And we’ll leave you with Trood’s idea to fix the pension system.

“The only thing that needs priority fixing is the bloody government!” wrote Trood.

What do you think needs to be done to fix the pension system? Is the system we have as good as it gets, or is there room for improvement? Which party do you think has the ability to make the pension system – and retirement – fairer for all Australians? Is there a way to remove the politics from pensions?

Related articles:
Age Pension increases inadequate
Age Pension increases: 20 September 2018
Should the Age Pension increase?

Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.
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