National Seniors today launched its 2019-20 Budget Submission calling on the government to redress decades of neglect.
Recommendations included: setting the pension rate independent of government; increasing assistance for private renters; supporting access to online services; expanding dental care for pensioners; helping pensioners with energy costs; and unlocking the productive wealth of the family home.
National Seniors Chief Advocate, Ian Henschke said Australians wanted a fair-go for pensioners and the submission recommendations provided practical ways to ensure their standard of living kept pace with community expectations.
“The aged care royal commission has focused attention on Australia’s failure to support vulnerable older people,” Mr Henschke said.
“We are also failing our pensioners, and our Budget Submission recommendations are an investment that can curtail future public spending on the ageing population.”
Age Pension Tribunal
An Age Pension Tribunal should independently set the Age Pension rate to take the politics out of the pension.
Mr Henschke said the pension had become a target for budget cuts with younger taxpayers being told they are bearing the tax burden to support seniors.
“The tribunal would take responsibility for calculating a fair and adequate pension rate and any supplements based on need and circumstance,” Mr Henschke said. “Its decisions would be accepted without debate in the same way monetary policy is set by the Reserve Bank.”
Reducing the Age Pension taper rate
The submission also called for the Age Pension asset test taper rate to be cut from $3.00 to $2.00.
“This previous budget measure had a punitive impact on older Australians, discouraging them from saving for retirement, and must be reversed,” Mr Henschke said.
“The current taper rate disadvantages those who have saved, relative to those who haven’t.”
“It forces retirees to take on riskier investments simply to generate the same income they would get if eligible for the pension. The alternative is they consume their savings to precipitate eligibility for the pension.”
Making essential services more affordable
The submission emphasised lifting government incentives and subsidies that enabled pensioners to access essentials such as energy, dental care, internet and housing.
“Accessing the private rental market, which is increasingly out of reach for many pensioners, can be improved by lifting the maximum rate of Commonwealth Rent Assistance,” Mr Henschke said.
He also said low income households were hardest hit by escalating energy prices. Indexing the Energy Supplement in line with the energy component of CPI would help pensioners and encourage government action to keep energy prices stable.
The submission also called for improved oral health through the provision of basic dental care to be expanded for pensioners, and greater support for pensioners to access services and social connection online through subsidised connection to the NBN or another internet provider.
Unlocking wealth in the family home
Many older Australians need support to help them downsize for a better and safer life in retirement.
National Seniors wants the government to support retirees with limited assets to unlock the wealth held in their family home by quarantining downsizing proceeds from the Age Pension means test.
“We are strongly calling on government to exempt up to $250,000 of home sale proceeds from the means test,” Mr Henschke said.
“Investing downsizing proceeds in superannuation without impacting the pension will increase the incomes of many older people who might otherwise choose not to, enabling them to live in more suitable housing while also freeing up larger housing stock.”