7.30: Pressure on Government to overhaul age pension as growing number of Baby Boomers leave workforce

IS Deloitte Access Economics’ Chris Richardson walking on both sides of the street at the same time?

Mr Richardson says there is no case for reducing the Australian age pension.

“Our pensions are not generous. You look at our wages and our pensions, and that rate in Australia is not terribly high compared to what’s paid elsewhere in the world,” he said.

*But there is a case, he argues, for INCLUDING THE FAMILY HOME in the means testing for age pension eligibility.

*“You have some people who have incredibly valuable homes and yet qualify for the pension.”

IS Richardson saying the pension is affordable then says because of the burden it generates the budget will need to include the ‘family home’ in the means test?

IS what is being said that the family home of the pensioner (a full taxpayer for 40 years or more) is to be means tested … if you find your home is in an area well sought after … the value of your very modest home increases … and you will be forced to sell your home?

IS it about ‘asset recycling’ allegedly for younger generations to get their hands on the family home?

When in fact they are locked out by low wages and insecure work (on contract) …

With the pensioner forced to sell to keep their pension …?

OR is this about opening the market for wealthy people (the Elite Housing Class including overseas buyers)?

IS it about providing them with ‘a supply’ for a growing class of landowners, the so-called Aspirationals … which class may become very powerful … and further boost ‘the Rights’ voter base … by growing the opportunity to expand their ownership of private wealth in Australia … philosophically growing a Cohort … ?

Pressure on Government to overhaul age pension as growing number of baby boomers leave workforce

7.30

BY PETER MCCUTCHEON

10 JULY 2019

Wendy Walters wears glasses and a yellow top
PHOTO Wendy Walters does not have much superannuation and says she could not live without the age pension.ABC NEWS: CHRIS GILLETTE

The Federal Government is coming under pressure to make changes to the age pension, as a growing number of baby boomers are expected to leave the workforce over the next decade.

Key points:

  • The Federal Government is reviewing the deeming rate used to calculate how much income pensioners are earning from assets
  • By 2029, it is predicted the government will be required to spend an additional $9 billion on the age pension
  • Economist Chris Richardson says the pension age should be lifted and the family home should be means tested

Analysis by the Parliamentary Budget Office (PBO) predicts an ageing population will require an increase in government spending of $16 billion by 2029.

More than $9 billion of that will be on the age pension.

“The age pension is eminently affordable, but we can and we should do stuff better,” Deloitte Access Economics’ Chris Richardson told 7.30.

Mr Richardson said the PBO analysis strengthened the case for further raising the pension age, which is currently at 66 years. In 2023 it will become 67 years.

“If we’re going to live a lot longer, well, chances are we’re going to have to work a bit longer to pay for the bits when we’re not working,” he said.

Photographer Roger Arnaud, 64, thinks raising the pension age is a terrible idea.

He is finding it hard to get full-time employment, does not have a lot of superannuation and is planning to take the pension as soon as possible.

“I actually believe that it would be a lot better if the Government actually lowered the pension age,” he said.

“There’s a lot of people who’ve moved to over 60 and they’re never going to find work again.”

Roger Arnaud holds a camera

Review of ‘deeming rate’ used to calculate pension

With record low interest rates there is pressure to widen pension eligibility by easing the means test.

The Government is reviewing the so-called deeming rate used to calculate how much income pensioners are earning from their assets.

This deeming rate has not changed in more than four years.

“Should they reduce it? I think they should,” Gold Coast pensioner Julie-Anne James said.

“Given that we’ve got a 1 per cent interest rate with the Reserve Bank at the moment, no-one is earning big money on their cash in the bank.”

Julie-Anne James wears a red top

Ms James does not have a lot of super and she knows many women in a similar situation.

“We just survive. We earned lower super, lower wages,” she said.

The pension helps her live an independent life, and she is looking forward to helping care for her grandchildren.

“I don’t think all of us do live the life we want to live. We don’t have a choice, it is what it is.”

Wendy Walters sits at a desk

Bundaberg retiree Wendy Walters worked in the community care sector and now has a relatively small superannuation nest egg.

She has just been granted the age pension.

“I think I worked out I’ve probably got six years [in super funds] and I’m certainly not going to be gone in six years, I can tell you that. I don’t intend to,” she said.

If there wasn’t the pension, I wouldn’t be living. That’s the reality.

“I always knew that I was probably in a situation where I would never be able to live terribly well. Having said that, one of the great things about my generation is that we do OK with very little.”

Should the family home be means tested?

Mr Richardson says there is no case for reducing the Australian age pension.

*“Our pensions are not generous. You look at our wages and our pensions, and that rate in Australia is not terribly high compared to what’s paid elsewhere in the world,” he said.

Chris Richardson wears a suit and tie

*But there is a case, he argues, for including the family home in the means testing for age pension eligibility.

“The politics are horrendous, but it is still the right thing to do,” he said.

*“You have some people who have incredibly valuable homes and yet qualify for the pension.”

The idea horrifies Ms James, who is still paying off the mortgage on her Gold Coast apartment.

My home doesn’t generate an income so I don’t see it as being an asset … because I pay body corporate [fees], I pay a lot of bills to live here.

Mr Richardson says pension reform is a hard conversation for politicians, but it is possible to have a sensible debate.

“The basic recipe is simple: concentrate on those who need the most help.”

SOURCE: https://mobile.abc.net.au/news/2019-07-10/pressure-to-overhaul-age-pension-as-baby-boomers-leave-workforce/11295722?pfm=sm

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