Federal Budget 2018: The key issues for retirees

How Treasurer Scott Morrison can help retirees in Budget 2018.

The key Budget issues for retirees

It is imperative for governments to ensure that all older Australians have a roof over their heads and an income robust enough to cover food, energy, household expenses and decent health care. Unfortunately, this is not the case for many retirees.

This year’s Budget presents an opportunity to lay the foundations for effective economic policy that will ensure that retirees can better support themselves with legislation that works for all, not just a few.

Having recently surveyed the 250,000 strong YourLifeChoices database, receiving 5064 responses to 33 questions, we learned a lot about the six different retirement tribes and how they are managing their retirement affordability.

According to what you told us in the Retirement Income and Financial Literacy Survey, these are the areas the Government should be looking to address in this year’s Budget:

Making health care more affordable
When asked about the single greatest challenge to living within their retirement income, 36 per cent of our readers responded with health insurance or health bills. With private health insurance premiums rising even higher at the start of this month, this is an issue that is only getting worse. Until recently, our Medicare system has ensured most Australians receive high quality medical care, regardless of their financial situation. It seems this is under threat, with Medicare suffering death by 1000 cuts. The Treasurer should leave Medicare alone, except to ensure that critical health tests, including MRIs, are claimable. Furthermore, the Government needs to look at capping private health insurance premium rate rises.

Keep a lid on energy costs
The other major issue with regard to living within your income was energy costs, with 18 per cent of members naming it their number one challenge. While the responsibility for the cost of energy is mostly in the hands of private business now, due to most states privatising their energy retailers, the constant price hikes and gold-plating of the delivery system demonstrate that it is time for some government intervention to keep the system in check.

Tackle housing affordability
The base rate of the Age Pension remains too low, particularly for those who are renting. Around 10 per cent of respondents to our survey said they were currently renting and around 15 per cent of the retiree population is now going without medical care and food in order to cover rising housing costs. Rental assistance for retirees needs to be increased to ensure these people live with a reasonable measure of dignity. The current rate at which Rent Assistance is paid is far from reasonable given the annual increases, often greater than CPI, imposed by landlords. More affordable government-funded rental accommodation, i.e. social housing, is also required and this needs to be addressed urgently.

What issues would you like the Government to tackle in this year’s Budget?



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    Joy Anne
    3rd May 2018
    I would agree Rental Assistance is poor especially with rents increasing by landlords. Probably should be at least $135 per week not fortnight.
    Another issue should health if pensioners have the 2% taken off it would be more affordable. I just tried to re join my health fund as I still have extras due to glasses, acupuncture, physio, dental. If that 2% came of the difference is nearly $60 extra per month.how can pensioners afford private health.
    3rd May 2018
    Unfortunately, if something goes wrong the cost of NOT having private health insurance can substantially exceed the cost of having it.
    3rd May 2018
    Joy Anne, we can't afford full health cover, and the gap makes it even more unaffordable ($6000 gap for a knee replacement). Consequently I wait my turn in the public health system. Also starting to wonder if I should continue my extras cover, as nowadays it doesn't even cover half the bill in most cases.
    3rd May 2018
    Opted out of health insurance cannot afford it. If we still have mortgages we should be able to get some assistance.
    3rd May 2018
    The public health system is at breaking point wait times not acceptable. Problem being so many migrants getting help including the time consuming and costly cost of them needing interpreters. No migrant should be allowed into Australia until they speak English. They do not want to learn once they get into Australia.
    4th May 2018
    The wait times are going to get even longer.
    5th May 2018
    I found the wait times longer in the private system actually. Waited 14 weeks for surgery for suspected cancer, and it was botched. Care was appalling. Waited 2 weeks in the public system and got fantastic care. Nurses in the private system told me they were leaving to work in the public hospitals because all their bosses cared about was profit.
    6th May 2018
    Yes OGR. Capitalism often seems like a solution at the beginning and appears to offer profits to those willing to set up business but frequently ends badly because greed enters the picture.
    Private health has only ever been about the well off and rich. America is a great example of why countries developed public health systems.

    In Australia's case we have a private system trying to compete with a public system and of course unless the private system offers much better service it can't compete.

    This idea obviously allowed a fair amount of public money to leak into the cronies pockets but it hasn't served Australians well at all.
    7th May 2018
    We are holding onto our private health by shopping around and getting a good deal. Also, we choose our doctors carefully so there is no surprise. Many bulk bill still.
    My cousin had a hysterectomy in a public hospital and was put in a general ward with all male patients except for herself. If she had been private this would never have occurred. It has happened to her when she had a knee replacement as well. So unpleasant for her!
    My sister has said she would stop eating before she let her private cover go. I agree!
    We have an excellent private hospital 20 minutes away which we choose every time,

    3rd May 2018
    I am surprised that health costs were rated higher than energy costs as later has been rising much higher in past 6 years.
    A question for good readers - how long should someone be in Australia before becoming eligible for OAP. I have heard statements that we bring in family reunion immigrants who are well into 50s and they automatically become eligible for OAP - why they have contributed nothing and many would have received nothing from countries they came from.
    Many Australians contribute to tax system for 40 years or more so why should others who contribute nothing get anything.
    I read with interest that we now have just on 50% of current taxpayers the effectively pay NO tax - there has to be a way to make everyone contribute at least $1 toward all the services everyone demands so that everyone realises that nothing is free.
    Latest stats are that in 15/16 financial ear government received $186b in personal income tax.
    the top 1% if taxpayers paid 17% of tax
    Those earning over $180k were 4% of taxpayers but they paid 30% of tax collected.
    Taxpayers earning between $80k and $180k represented 25% of taxpayers but paid 40% of tax collected.
    49% of taxpayers effectively paid no tax. According to ATO this was 3.6million Australians.
    3rd May 2018
    Bob, haven't you heard of the GST? Everyone pays it, no matter what strata or echelon of society they come from. So your statement that 50% of taxpayers don't pay tax (which is tautology in itself), should say that 50% of possible taxpayers pay no net income tax. We all pay tax - every time you fill up your car/motor vehicle you pay tax. When you register same, you pay tax. When you eat at a restaurant you pay tax. When you die, your estate pays tax on your funeral costs. If they don't get you one way, they will get you another.
    3rd May 2018
    Big Al cool your jets. bob clearly states the figures quoted relate to personal income tax!
    Retired Knowall
    3rd May 2018
    To get Age Pension you need to have been an Australian resident for at least 10 years in total. For at least 5 of these years, there must be no break in your residence.
    Some people can get Age Pension if they've been an Australian resident for less than 10 years.
    If you are a refugee or former refugee you are exempt from the 10 year rule.
    If you're a woman whose partner died while you were both Australian residents, you need to be an Australian resident for the 2 years before you claim.
    If you don’t meet these rules you may be able to claim if you’ve lived or worked in a country that has a social security agreement with Australia.
    3rd May 2018
    I see nothing wrong with lower income earners paying no income tax, since they pay a very much larger portion of their income in GST and other indirect taxes.
    4th May 2018
    Bob, firstly, Health costs are more significant than Energy costs if you have Private Insurance, hence I guess that is a bigger issue.

    I agree that all residents here must have a return from working here, and have repeatedly proposed support by all for Universal Pension without any Asset or Income or Partner tests - simply based on Age (65) and Residence (say 15 years) - at a higher rate than current rates. Those who then don't qualify could be given a lower subsistence allowance till they qualify - if they continue to stay here.

    It is wrong to simply analyse Individual Taxation statistics and use that as justification for any argument. Besides GST as many have noted, hope you are aware of the many wealthy who pay NO tax by adjusting their affairs with accountants help, and many Companies also pay NO tax. You must include Company Taxes also into any analyses as that is also part of the Income this Govt gets.
    I have proposed a Minimum Tax for both Individuals and Companies without Deductions to ensure all pay their fair share of tax. We should have NO PROBLEM for funding if we did that. Also, ensure all Resources are adequately taxed to serve THIS country not foreigners.
    3rd May 2018
    More affordable housing needs to be made available in all states. We have applied for housing (10-15 years wait) but were told as a couple we were only eligible for a one bedroom unit. A younger single person can have a 2 bedroom unit. Unless one of us get seriously ill where we will need 2 bedrooms we will be stuck cramped in a one bedroom unit. I have a hobby where I need extra room but that it is not considered by housing. Us older people are supposed to go into a small space and vegetate.
    3rd May 2018
    A young single person will never get public housing of any size! A young single person with a child might and that may be a 2 bedroom unit.

    A couple don't 'need' 2 bedrooms. They might WANT 2 bedrooms but they don't need it.

    Public housing should and must be allocated on a need basis only.
    3rd May 2018
    My sister has a 4 bedroom public housing home. She had 4 children and was left widowed and destitute over 20 years ago. Now the kids have grown up and left, she would like a swap to a one bedroom aged unit. It seems to be too hard for Housing, who say nothing is available. Where is the sense?
    4th May 2018
    No sense anywhere in bureaucracy, BUT I don't see why Annick should have a 2 bedroom unit. Such expectations are unreasonable. If you expect the taxpayer to subsidize your accommodation, take what's offered and be grateful. Most of us have provided for ourselves, without taxpayer help. In fact, we paid taxes to provide for others while ensuring we didn't impose on the taxpayer. Now, we are suffering deprivation of pension income and high costs to live in our own homes because we took responsibility for ourselves.

    Goodness, Annick, you are very fortunate to live in a country where a one bedroom unit is offered to you!
    3rd May 2018
    Overhaul the tax system making it fairer and equitable, and which includes a universal age pension regardless of assets, just like they do in the UK.
    The taxation system would then come into operation and ensure equity, fairness and a sense of equality. This would ensure the government got a lot of this "largesse" back into it's coffers by taxation, and just as importantly, the economy would get a real boost by the additional spending from spreading the money around.
    But of course this idea would be too simple for the dumbos in Canberra.
    3rd May 2018
    Be careful what you wish for thommo.

    In the UK as your example, for 2018 the full pension rate for a single person is 163 pounds a week. The minimum living wage (for a 38 hour week) is 297.54 a week (7.83 pounds per hour). (NB there is a minimum wage too but it is for up to 25 year olds and apprentices and it is lower than the the minimum living wage). The pension equates to about 55% of the minimum living wage.

    Compare that in Australia:
    Minimum wage = $694.90 (38 hours a week or $18.29 an hour)
    Single age pension = $826 per fortnight = $413 per week (no additional supplements added for this purpose). This equates to about 60% of the minimum wage.
    3rd May 2018
    to KSS.....I am talking about the principle involved, not equating it in dollar terms....Australia is a rich country, and we can do what the UK does with a universal pension, but we can do it better and make it more equitable and just etc.
    Of course, we will have to get these politician's snouts of the trough first and bring them back to reality, and get the big end of town to comply with their social justice obligations, and therefore give more to our seniors who deserve a reasonable sum to retire on, but with dignity also...
    4th May 2018
    We have fewer and fewer people working to pay for one person on a pension...read the other day it will soon be 2.5 people working to support one person.

    Years ago it was double figures...how can any country afford to pay large pensions when there will not be the income tax to pay for it...can anyone enlighten me??

    "The exclusive modelling for The Daily Telegraph by the National Centre for Social and Economic Modelling at the University of Canberra reveals 48 per cent of Australia’s 12.2 million “income units” pay no net tax.

    Any tax they do contribute is offset by the welfare — pensions, family tax benefits or childcare rebates — they receive.

    The analysis also revealed which family types are most reliant on the public purse.

    The results would shock many Australians, according to NATSEM principal research fellow Ben Phillips.

    “Most people rightly or wrongly think they pay too much tax and don’t receive enough benefits,” Mr Phillips said.

    So people might be surprised to learn only about half of Australian families pay more tax than they receive back in benefits.”

    As many as 85 per cent of single-parent families contribute no tax, once welfare benefits are deducted. Of single person households — mostly pensioners — 55 per cent pay no tax. About half of couples with no children pay no tax. For couples with children — with adults more likely to be working — one in four families pay no tax.

    The Centre for Independent Studies wants the Family Tax Benefit Part B abolished.
    The Centre for Independent Studies wants the Family Tax Benefit Part B abolished.Source:News Corp Australia

    Research fellow at the Centre for Independent Studies Stephen Kirchner said pension rises should be curbed and Family Tax Benefit Part B abolished in next Tuesday’s Budget as recommended by the audit commission.

    On average, Australian families will pay $12,935 in income tax this year but receive $9515 in benefits — a net yearly contribution to the public purse of just $3424.

    The figures include welfare paid in pensions, family benefits, jobless support and childcare support.

    They include all income taxes paid but not indirect taxes, such as cigarette excise and state-levied taxes such as the GST."
    4th May 2018
    Absolutely agree, thommo, Universal Pension (without any Asset or Income or Partner tests - simply based on Age (65) and Residence (say 15 years)) is the only solution - now that the politicians have full stuffed up the Age Pension system.

    Radish, it is wrong to simply analyse Individual Taxation and use that as justification for any argument - right-wingers like to do that, and many of us are sick of their devious and stupid analyses!
    You must include Company Taxes into any analyses as that is also part of the Income the Govt gets!
    Also, note that in the Oil rich countries, there are NO Individual taxes for anyone! Besides GST as many have noted is paid by all (ignored in the analyses), you are aware of the many wealthy who pay NO tax by adjusting their affairs with accountants help, and also the many Companies who pay NO tax.

    I have proposed a Minimum Tax for both Individuals (say 30%) and Companies (say 20%) on Gross Income without Deductions, to ensure all pay their fair share of tax. We should have NO PROBLEM for funding Universal Pension if we did that. Also, ensure all Resources are adequately taxed to serve THIS country not foreigners - with our level of resources we should be as good or better than many Oil-rich countries - if we only had sensible leaders! We would then have no problem with funding everything else!
    6th May 2018
    Radish, the politically-motivated reports you are reading are twisting the numbers.

    Australia's spend on the aged pension is HALF the spend of other developed nations, and is falling while theirs is set to double.

    While we have fewer workers supporting retirees now than we did in the 70s and 80s, we actually have more than at most times in history, because prior to the 70s most families had only one partner working whereas now there are two, and going back a little further, there was no assets test and further still, no means test at all for the aged pension.

    The government chooses to manipulate the numbers to suit its agenda, and never reveals these truths. And sadly the Opposition is on the same page. There's a conspiracy happening against older Australians.

    This country has plenty of resources to pay aged pensions, and we would actually do better to care for the aged more generously because that would promote spending that drives growth and jobs, offering better rewards for decades of work would drive greater productivity, and more wealth would be passed down to the young to promote greater general affluence. Taking from the aged is taking from society as a whole and feeding mismanagement and economic decline.

    Similarly, sensible welfare for families is a good social investment. It promotes health, education, and greater capacity for children to brow into productive citizens.

    Where the problem lies in Australia is, quite simply, not taxing the very wealthy and global corporations adequately. These are the people not paying their way, and the national debt is growing fast because both major parties are intent on making the rich richer and depriving those lower down the ladder - those whose production and spending drives growth and tax revenues when the system is operating as it should.

    I am not a 'leftie', a 'socialist' - much less a 'Communist'. I believe strongly in reward for effort and a largely free market, but our forefathers intended for Australia to be a socialist democracy, with a strong progressive tax system and welfare system to ensure that the less advantaged were cared for, and a 'fair go' for those who were fit and able and willing to strive. We've lost that. The greed and corruption at the top has deprived battlers of the opportunity to benefit from striving, and is slowly grinding the less advantaged into abject poverty. It MUST STOP. We all need to unite to demand a return to the principles on which this nation was built.
    3rd May 2018
    In regard to energy costs.
    To get electricity to the users property, you really only need these important basic works. That is generation, transmission and control. These days there are lots (100s) of retail companies and multiple generation cos. All with their Boards of Directors, CEOs, CxOs, upper managements, admin depts., I.T. depts., sales forces, call centres, marketing, advertising, plush CBD offices, commission agents etc etc.
    3rd May 2018
    I suspect there needs to be a review of subsidised government housing. I think there are now many people in housing who could support themselves which would allow other more deserving people an opportunity to get accommodation. Also I think shared accommodation needs to be considered, and before you start I know you don't like it but beggars can't be choosers.
    3rd May 2018
    I agree Tib and I also think that public housing should not be able to be passed on to other members of the family.

    And older people in public housing larger than they need should be moved to smaller units, freeing up the two or three plus bedroom places for families in need. It is not for any Government to subsidise grand children's annual holiday to visit their grandparents.

    Public housing tenants are just that - tenants. They do not own their accommodation and should not be considering it as their 'forever' home.
    3rd May 2018
    I agree completely. A major overhaul is needed. Unfortunately it’s a state responsibility and with a reduction in commonwealth funding it’s become a very low priority
    3rd May 2018
    Definitely needs an overhaul, especially in NSW where they stupidly gave out ''lifetime unconditional tenancy rights''.
    3rd May 2018
    Absolutely nothing here specific to retirees. Just about everyone in Australia wants cheaper healthcare, electricity and housing!
    Old Geezer
    3rd May 2018
    What's new as everyone wants them too.
    3rd May 2018
    I'd like to see more support for older Australians to remain in their own homes. It's not always easy to access the support we need, especially in regional areas. Every service needs notice to be accessed - no room for emergencies. And, dare I say it - an increase in the mention to reflect current wages and prices.
    3rd May 2018
    An aged pension rise would be welcome. Can't rely on banks for anything these days. See BT has reduced their Cash Management Account interest rates to 0.28% per annum. Hardly worth while having such an account as the interest rate return would buy next to nothing. If the federal government is serious and wants to "look after our pensioners/retirees", as PM Turnball informs us, then an increase per fortnight of $40 for singles and $60 for a couple, might slightly ease the burden of trying to survive.
    Old Geezer
    3rd May 2018
    My biggest problem is lack of parking where ever I go these days. If there is parking they want an arm and a leg for it. It's good that I am to walk long distances but I often wonder how those who can't get on.
    Old Geezer
    3rd May 2018
    Heard today the government may tax the interest on savings at lower rates. I thought retirees are going to just love that as most don't pay any tax anyway.

    3rd May 2018
    We've done this subject ad nauseam, Ben and I don't believe that 2% response is an adequate sample to consider.
    3rd May 2018
    Do you think the Government really cares about the aged pensioners. Their wish is they want all old people to die. The day the current Government doesn't give a damn as to whether the oldies have a roof over their heads, or can afford to pay house hold bills and put food on the table, as long as they can stuff their pockets. People talk about rental subsidy's not be ample, well who gives a hoot about the pensioner's who are still paying off their homes, they don't get any assistance, and we have pensioners complaining, who are renting, that they don't get enough help. At the moment the "SYSTEM" works in favour of those renting - Max J
    Old Geezer
    3rd May 2018
    Your old age pension is your assistance.
    3rd May 2018
    I agree the current system favours renters, and I think that's unfair. After decades of struggle to pay off a home, why should a retiree cop costs often well in excess of rental costs to live in their own home, and get nothing, while renters pay less per week and get a subsidy?
    3rd May 2018
    The government does not give a shit about us.

    3rd May 2018
    Abolish the unfair assets test, or adjust so that it is no longer profitable to reduce assets and claim a pension. The current system is ridiculous! Ultimately, it will push aged pension costs up dramatically as there is no benefit to saving. Its absurd to have a system where an SFR couple with $1 million or less is worse off in income terms than one with only $500K.

    3rd May 2018
    Do the pollies think we get the same amount they do when they retire? They are all dumb f....\!!

    3rd May 2018
    The issues I would like addressed are more funding for aged pensioners and a big drop in overseas aid.
    3rd May 2018
    There needs to be a serious enquiry into the private health insurance industry. Why is the out of pocket portion (gap) $1,400 from one provider and $500 from another for the same item number? All private health providers should be forced to publish there gap costs by item number so consumers can make an informed choice when selecting a provider.
    Liberal National Coalition need to back off pushing aged pension age to 70. It’s unfair and unrealistic. I could not work until 70. If the same rule applied to all politicians, they would not suggest it.

    4th May 2018
    The answer is simple
    We need economic policies that promote growth and government to reduce spending
    Pay off all debt and start investing surpluses in vehicles that provide additional income that will reduce the burden on the taxpayer to fund governmet programs
    It’s not rocket science
    Unfortunately we have pressures from the left who lie to the people and use politics of envy that prevent good governance
    5th May 2018
    You are right, but nobody has yet suggested HOW to do what you suggest Raphael - only how to make the rich wealthier! Nobody is proposing ANYTHING that promises to generate greater affluence for the nation as a whole. The LNP has done nothing but kill incentive and punish endeavour on the part of the working and lower middle class, which is where prosperity comes from.
    6th May 2018
    This nation is plunging further and further into debt with increasing poverty and continual taking from the less well off. What we need is more generous aged pensions and abolition or extensive relaxation of the assets test and restoration of earlier retirement age so that there is a quantifiable reward for productivity and thus a stimulus to work hard and save well.

    We need more money in the pockets of the less well off so they spend and generate growing profits and more jobs and more tax revenue.

    We need to stop persecuting the moderately successful battlers and let them prosper so they inspire others to strive. Let them pass their wealth on to heirs. That makes for more prosperous families who can afford good health care and education for children who will grow and prosper. It means fewer living in poverty and greater affluence in the next generation of retirees.

    This idea of cutting down growing poppies to feed the tall has to stop. It is crippling the nation. Killing the middle class is what wrecked the American economy. Trump knew that and got to power saying he would fix it, but of course he had no such intention! He lied to win power to feed his own class. And that's what is happening here. Nobody cares about the nation. It's all about over-feeding the wealthy.

    No, Raph, I am not a 'leftie', a 'socialist' or a 'communist'. I am a realist who studied the economic and social model our forefathers intended Australia to follow - that of a social democracy with a strong progressive tax system and strong welfare system to ensure the disadvantaged were cared for and all who are able and willing get a ''fair go''. It would take only a very small increase in the tax paid by the rich, and for the rich to PAY THEIR TAX, to wipe the national debt and enable sensible reform to reward those who spend decades contributing to national growth and prosperity fairly and to abolish poverty and all the social ills that accompany it. I don't understand why the rich wouldn't be more than willing to pay to achieve that end.
    7th May 2018
    There is a price to pay for everyone living longer . Get use to it.
    8th May 2018
    BS. Simo. Nothing to do with living longer. It's to do with GREED - plain and simple. You can't keep handing out to the wealthy and letting them hoard gold in the Caymans and expect to fund social services.

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