Pension indexation

COTA Australia chief, Ian Yates, yesterday reminded a forum of how much worse off Australian age pensioners will be when indexation changes start.

The changes will affect about 1.5 million age pensioners who, Mr Yates claims, will be $80 per week worse off in 10 years. The changes are not due to come into effect until 2017, but will have a significant impact on the bottom line for those attempting to live on the Age Pension.

“This is an unprecedented attack on the quality of life of Australia’s pensioners,” he said.

“The existing pension indexing arrangements were only introduced in 2009 and link pension rises to average weekly wages, ensuring the pension keeps up with cost of living pressures and allowing older people to keep their heads above water.

The rationale behind the change to indexation, according to Treasurer Joe Hockey is that with so many older Australians living longer, we can no longer afford to cover the costs of the current Age Pension.

Read Ian Yate’s full response to this change

Opinion: Let’s fight this pension change

It’s not over until the fat lady sings. And the Budget 2014 change to pension indexation should be fought tooth and nail to ensure it doesn’t ever become law.

Given the number of unpopular measures in Budget 2014, with cuts which affected most sectors of society, except the super rich, it’s fair to say that the proposed change to Age Pension indexation in 2017 has slipped through the cracks. But at the COTA National Policy Forum, Making an Australia for all ages, the sheer inequity of hitting those with the least came home to me. When the Budget was announced in May, the headlines concentrated on the Age Pension age increase to 70. And why not?  It’s hard enough to get and keep a job at 55, let alone 65 or older. But the very significant reduction in pension increases means that the sole form of income for the vast majority of older Australians will be significantly reduced over the next decade, to the point where they will no longer be living on the edge of poverty, they will have fallen into an abyss. And for those 20 per cent who do not own their own homes, but need to pay increasingly high rents, the future is beyond bleak.

Yesterday’s COTA forum featured a wide range of speakers with diverse backgrounds and agenda issues, but there was unanimity on the need to rise above the political fray to create a vision and related policies for a fair and sustainable Australia for all ages. Beating up on pensioners by ensuring their income does NOT keep pace with average salary increases is not the way to achieve this noble aim.

What do you think? Did you realise the Age Pension indexation would be tied to CPI from 2017? Will this affect you? Do you think this is good policy? Would you sign a petition to send to all members of Parliament demanding that this legislation not be supported?

Written by Kaye Fallick