Under pressure from National Seniors Australia, the Federal Government announced it will review its Pension Loans Scheme (PLS) to better reflect current interest rates.
The scheme allows retirees to supplement their retirement income by drawing down on equity in their home to provide income to supplement their pension.
Despite three official cash rate cuts this year, the PLS interest rate of 5.25 per cent has remained.
This is further proof that the government is making money off pensioners.
The Age Pension deeming rate is also too high compared to market rates.
National Seniors continues to campaign for a cut to better reflect bank deposit rates, which have been cut over recent months.
When they review the Pension Loans Scheme, they should also review deeming rates.
National Seniors Australia Chief Advocate, Ian Henschke says the government is funding its budget on the back of pensioners.
“It is gross hypocrisy, calling on the banks to pass on the full Reserve Bank rates cuts when they are not doing the same. If you're attacking the banks, you've got to do something about your own house and get it in order,” Mr Henschke said.
"I think it's pretty clear there's a double standard here. The government is supposed to help pensioners, not make money out of them."
It is hoped the review of the PLS will result in a rate reduction for the 1,100 Australians who use the scheme to unlock the equity in their homes.
The government has responded to our lobbying but there’s still more to be done.
We will continue to fight hard to ensure that older Australians receive a go.
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Changes to pension eligibility and superannuation, unfair deeming rates and other measures have continued to punish older Australians.
We’re campaigning for a fairer retirement system based on principles of adequacy, sustainability, certainty and fairness – but we need your help.