Energy costs key concern for ‘Constrained’ tribes

Per Capita’s Myfan Jordan predicts the pressure points for the ‘Constrained’ tribes.

Myfan Jordan, social innovation director at Per Capita Australia, predicts the pressure points in 2019 for YourLifeChoices’ Constrained retirement tribes.


The areas of expenditure that will have the biggest effect on the finances of Constrained Couples and Singles in 2019 fall into seven key areas.

Energy costs
With bipartisan agreement on energy policy fading into the distance, the volatility of energy costs will be a key concern.

Although age pensioners and part-pensioners may be eligible for some state or territory-based energy concessions, many are faced with bleak choices to either heat or eat in winter; and buy groceries or run cooling systems in the hotter months.

Even pensioners who own their homes can be vulnerable. Many older properties lack adequate insulation, meaning the costs of staying warm and keeping cool will be much higher.

Older people may also experience a ‘loyalty penalty’, sticking with a known energy provider rather than shopping around on comparison sites for the best deal. Some energy companies have been found to charge long-term customers higher prices.

While cost-of-living pressures continue to affect household expenditure, for older people – known to prioritise bill paying and to avoid hardship programs and grants that are offered to energy consumers – food is often the trade-off.

Approximately 12 per cent of people using food banks are over 65 years of age. (Foodbank Hunger Report 2017). Food insecurity has been shown to negatively affect both physical and mental health.

While some food costs are relatively stable, the price of fresh and more nutritious foods can increase due to extreme weather conditions, and it is likely that the more extreme effects of climate change will continue to push up prices.

It is no wonder there is strong emerging evidence of malnourishment among older Australians who cannot afford healthy diets.

Climate change
A University of Sydney report released in November describes climate change as a health issue.

Increases in temperature, and particularly heatwaves, pose a considerable health risk for older people, who are more likely to be living with one or more chronic conditions, and for people with disability.

In Victoria, for example, the heatwaves of 2009 and 2014 were linked to the deaths of 374 and 167 people respectively – a rise of more than 46 per cent in the 65 to 74-year age group alone.

In total, the 2009 heatwave, which also affected South Australia, killed 432 people. That is  two and a half times the number of people killed in the Black Saturday bushfires.

In the absence of affordable air-conditioning, the power costs of older Australians are likely to put their health at risk during extremely hot weather.

With the property market cooling, and some predicting that home loan interest rate may rise in 2019, some older people with mortgages may find their homes are worth less than the amount they borrowed.

Health expenses
Out-of-pocket health expenses can be a major cost for older people and represent a significant portion of a fixed income.

The Commonwealth Seniors’ Healthcare Card (CSHC) provides low-income Australians with significant discounts on healthcare costs. The card is means-tested by income, and thresholds are indexed annually, most recently rising in September 2018. You can check your eligibility here.

Despite the availability of the CSHC to most Australian pensioners, gap payments for prescriptions, specialists and other medical expenses not covered by Medicare can be significant.

Staying connected is particularly important to older people, because they are more at risk of social isolation and loneliness.

For this reason, transport is a critical enabler and the associated costs are often a barrier. Hikes in petrol prices over the past five years have been significant. Even though there has been a drop in the last quarter, rises next year should be expected.

For older people living in rural areas, who are often more reliant on their cars, petrol prices are often higher than in the city. More than 50 per cent of people in rural areas are aged over 50 and the numbers are growing. Public transport costs can also be a barrier to accessing services and to social participation.

Technology costs
The cost of home internet is significant for all people on fixed incomes. The cost of upgrading computers, mobile phones and so on are high, but these technologies are recognised as increasingly critical for accessing government and other services.

Pensioners on low, fixed incomes are often excluded from choice in the provision of services, meaning that market competition doesn’t always provide the lower costs we are promised.

Does the lack of action on an energy policy concern you? Are you confident your energy costs will go down in 2019?

Per Capita is an independent, progressive think tank, dedicated to fighting inequality in Australia. It works to create a vision for Australia based on fairness, shared prosperity, community and social justice.

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.


    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.


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    20th Jan 2019
    Lack of insulation jacks up the electricity cost a lot where I live. People who own their own homes can go to solar power, but renters are stuck with a thru wall aircon and no insulation in the roof.

    The early settlers got it right when they invented the Queenslander. This was a house with a very high pitched roof, high off the ground and a verandah around the outside.
    But then came the cheap build, low pitch, truss frame roofs. A tree was planted for shade and an air conditioner put thru the wall. While waiting for the tree to grow the ceiling got very hot producing radiant heat.

    Now everything is slowly changing because of electricity costs.
    I am renting a flat with no ceiling insulation apart for a little bit of foil I distributed through the man hole at my own expense, but the roof is so shallow all the iron would have to come off the roof to reach all parts of the ceiling.
    I also put up shade cloth to block the afternoon sun, but this is all additional expense on top of rising electricity.

    There is another product i am looking at called "foil board" it is a very light wafer of polystyrene with foil on either side. It would make a very good suspended ceiling if I were to paint one side white. Well that"s when I have $50 to spare and don't need a new shirt.
    3rd Feb 2019
    This is dated 20th january.... What am I supposed to do this time around, disagree with myself.
    3rd Feb 2019
    I suggest that you ask you landlord to put on a ceiling fan. Not very expensive. Would be a win win for the landlord as any home improvements adds value to their investment property
    28th Jan 2019
    The Libs in N.S.W. did promise to sell the poles and wires one of the few promises they did keep.The people in N.S.W had their chance to vote against privatization and they blew it.Power prices will always increase get us to it that is what private companies do.
    28th Jan 2019
    They spent $16 billion getting an $11 billion sale over the line. How those responsible aren't in prison just indicates how corrupt out State Governments have become. They were always bad but it's blatant now.
    Bankers placed in safe seats to sell off our assets for fees and charges for the bank and then off they go back to that very bank.
    At least the rum corp gave out rum to dull the pain of it all haha.
    28th Jan 2019
    Oh so you are not one of the Affluent Tribes mentioned elsewhere in today's YLC'S topics Charlie?, I do feel for you as we have no insulation in the front rooms of our house although we did put insulation in the roof later, the last 2 weeks have been terrible, our water cooler cannot keep up with the heat and the fans don't do much either, hate to think what our power bill will be this quarter.
    28th Jan 2019
    Isn't this a repeat edition?
    28th Jan 2019
    I think a lot of the topics are, just worded differently.
    28th Jan 2019
    I notice something different this time around... I don't agree with calling climate change a health Issue. That's a real activist generalization...

    There are more direct case by case examples, relating to the quality of the built environment, where the health of pensioners can be improved.

    There are even ways of improving administration so the living environment of age pensioners can be made healthier...
    1. If the housing department doesn't have enough one bedrooms flats for single age pensioners. give them two bedroom flats, but don't just exclude them...
    2. Pay more attention to the kind of neighbours pensioners have to live with and where possible place them away from young, rowdy, desperados who have very few life skills and no jobs. Quite often it is these people who get the Dept of housing flats because they live in groups and their lifestyle has put them on the streets.
    28th Jan 2019
    Sometimes new members ask the same or similar questions again at a later date.
    28th Jan 2019
    Why are you using the word “tribes” so much just lately?
    28th Jan 2019
    That irritates me as well, sos.
    28th Jan 2019
    I agree sos: I certainly don't belong to any tribe. It must be "fashionable" to use it at the moment?
    28th Jan 2019
    Tribes - that's a way to segregate people into groups, and then make these groups fight with each other - same as what Political parties do!

    I also agree with Charlie above "I don't agree with calling climate change a health Issue. That's a real activist generalization...". Climate change had no relevance in this article, just pushed in there by a climate change obsessed person.
    29th Jan 2019
    Hoping the science is wrong are we?
    29th Jan 2019
    Well, Climate Change or no Climate Change, something is definitely happening to the weather, In all my 81 years, from when I was old enough to take notice of the weather, I have never seen extremes such as we are getting now.
    29th Jan 2019
    Misty - you only need to look at a chart of the long term temperatures, a little like the stock market, lots of ups/downs over the years but in an upward trend overall. It's real, the only uncertain thing is why - nature or man, I go with man.
    30th Jan 2019
    Well Greg, it stands to reason surely, that with the amount of population on earth, loss of forests, amount of cars, boats, bikes aircrafts, factories etc spewing toxins into the atmosphere something must be affected.
    3rd Feb 2019
    Repeating "Climate change had no relevance in this article, just pushed in there by a climate change obsessed person." Or by vested interests from the Climate Change industry.

    Climate is always changing, anyone who blames man could be right to only a very very small degree. What can Australia do about Climate Change? A big fat Nothing! Certainly not relevant for "Constrained tribes" to worry about. Unless the Climate Change Industry succeeds in conning Govts to give them even more taxpayer handouts, with less money left to pay pensions.
    28th Jan 2019
    My internet costs have risen significantly with the advent of NBN. Previously my bundle included home phone, internet and mobile, and cost me $85 a month. Now I am paying $89.95 for internet and home phone, and the mobile costs on top of that. Total cost per month is now $119. Granted, I have unlimited internet access, but not on my mobile phone. To do that would cost me another $30 per month. Access to different providers is very limited where I live. Works out to $40 a week, not a fortune, but a big chunk out of a pension. I did not have a choice if I wanted to stay connected. I seem to have lost my pensioner discount along the way too........must follow up, when I have the energy
    29th Jan 2019
    Patti, I have a 'trio' bundle with Telstra - Home phone, unlimited NBN & Foxtel (Entertainment & Drama) and it costs me $129 per month. Then add on my 'bring-your-own-mobile' for $35 per month with $50 of calls & data included.

    I've tried other companies, but keep on coming back to Telstra.

    I pay all my bills on a fortnightly basis to avoid 'bill shock', so I'm never owing more than my next bill payment at any time.

    My electricity account (NSW) has a basic 3% discount with additional discount of 29% to make a total of 32% on each bill (supply only) if it's paid by the due date. Seeing that I pay my account in advance, I've saved myself over $900 in 24 months. There is a rebate available for pensioners. Make sure you're getting this.

    I know it takes discipline to pay the bills on a regular basis, but I've found that's the best way that I can afford them.

    I've been on a pension for 20 years, so I know what it's like to have to scrape up the funds to pay my bills, which can be very hard most of the time.
    29th Jan 2019
    SuziJ what electricity company gives you 32%?, I am looking to change mine in NSW.
    29th Jan 2019
    Misty - just be careful about taking too much notice of any discounts as it depends on what their base rate is IE: company A may have a base rate of 30 cents and a discount of 25%, company B may have a base rate of 40 cents and a discount of 30%. Do the maths and the headline discount of 30% may "look" better but company A is actually the cheaper choice.
    29th Jan 2019
    Yes I am chec king Greg, Origin have given me 28% pay on time on usage only but only 7 cents for my solar, Click Energy are offering 40% off total bill and 15 cents solar rebate through One Big Switch so I am going to ring Origin and check with them if I can get a better deal. Greg where do I find it or how do I work out what the base rate is, is it daily supply charge or usage charge?, Click's time of usage goes from 33.00 to 47.41 cents/kwhr.
    29th Jan 2019
    You quoted another factor - discount off whole bill or discount off usage only, so, so complicated to work out the best deal. I think they do it like that just to confuse people. I was thinking of the "usage charge" when talking about the base rate. The best way to see YOUR base rate is to look at the last bill, but then, as you have said, sometimes there's two or three base rates in "blocks" depending on how much electricity you use. Again more complexity.

    The federal government now has a website where you can compare plans for your usage/location - I haven't used it myself, I'm in VIC and they have had a similar site which is what I used -

    I don't know your location but you really should try that federal government site, answer all the questions, and it will give you the best plans as best they can. If you have a smart metre the data from that can be used to get an even better estimate of plan costs.

    Also be careful about using other comparison websites that aren't government ones, they will often only deal with certain companies so you may end up with deals that are not the best in the market.

    Like I said this is very complex and LOTS of people just don't bother seeing what's out there, either too difficult, they don't know, can't be bothered, whatever. I guess you realise this is what the current government was going on about cheaper electricity prices recently, the prices are not cheaper just the plans people are on may not be the best for their circumstances and they are saying to check to see if better plans are out there for them.

    Good luck with your searching, hope you find something much cheaper.
    30th Jan 2019
    Thanks Greg I checked that website out, I think I am getting a good deal from origin, I was with them for years and then charged to Dodo but Origin rang me up and asked me to come back to them and I told them I was getting 30% discount with Dodo and so they matched it but the Solar is not as good unfortunately.
    3rd Feb 2019
    Greg, yes the Govt website is an useful comparison tool especially given the complexity of energy prices. I hope they publicise it a lot more (and keep it up=to-date), say by forcing Electricity companies to include a leaflet / big prominent note in every bill - to push the lazy customers to wake up and look after themselves.
    28th Jan 2019
    Loyalty penalty is rife. My aunt who lives opposite me, had been with a large state insurer for over 20 years for her house/contents, car and roadside. After a comment I looked at her H/C insurance and nearly feinted - was nearly $1500. She just assumed she was getting the best deal because she had been with them so long. After chasing around, got far better deal for H/C, down to $526. Ringing the previous company to happily cancel, they would not price match, and I was stunned to be told 'well she was happy to pay previous premiums and has never complained'. Think this sums up insurance companies exactly, thieves.
    29th Jan 2019
    This is an extremely common practise, car insurance is the same, company A will entice you with a good deal one year then next year the premium is much higher. I now always get numerous quotes online, and usually you find one or more companies that will be far cheaper - and I only stay with the bigger names, not "elcheapo" insurance companies which may not be there at claim time.
    28th Jan 2019
    Tribes WTF ?
    28th Jan 2019
    Yes I wondered why YLC'S have used that word twice today?.
    28th Jan 2019
    Re transport and isolation some local councils offer assistance to go shopping - much cheaper for travel both ways than one way via other methods. Some also offer day outings at weekends. No idea what the cost of them is. The are very popular so I doubt they are expensive
    3rd Feb 2019
    My local council has transport services run operated by volunteers for shopping and medical services. Local trips are 14.00 and more if you have appointment further o Also the reception staff make the return call for you . Saves the of a call via using your own mobile. Worth checking out. Also they have a bus mainly for shopping trips Councils in you area are worth checking out
    East of Toowoomba
    28th Jan 2019
    These increased costs affect everyone, not just retirees.
    30th Jan 2019
    Please stop using photographs of harmless steam from towers as there are many who associate them with coal smoke or even nuclear waste.

    We need to go Nuclear to stop us dropping down the scale towards becoming a third world country.
    30th Jan 2019
    In your backyard?.