Avoiding austerity - caring for our aged

Considering the rights of aged pensioners

All too often, the rights of aged pensioners are overlooked in what is sometimes a callous and cynical political game.

For the residential care system - high and low intensity care, there is already an urgent need for reform. This paper, however, will survey the plight of those aged Australians not yet in residential care, but struggling to “make do” in the broader community.

Whether dependant upon the Aged Pension, or otherwise supplementing this with continued paid work even beyond the official retirement age, these Australians deserve security, comfort, dignity, social engagement and purpose. Many services and allowances should be made available for elderly Australians after application of a generous and fair means test.

We will consider some of these - one at a time - leading towards the conclusion of this paper.

Choice in work and retirement

To begin, Australia should not respond to the ageing of our population by raising the minimum retirement age beyond 65. Indeed, it would be preferable to set this threshold to 60 years for both men and women. After 40 years - or more - in the workforce, it is reasonable that elderly Australians be free to pursue their passions. This is especially important in cases where that work has involved drudgery.

That said, many elderly Australians, given the choice - and the incentive - would continue work. For some, work does provide social engagement and connectedness; as well as opportunities for self-expression, purpose and personal development.

Providing tax and welfare incentives for continued work can provide an element of choice. The existing Pension Bonus Scheme is an important move in this direction, but ought to be more generous at the time of its inception. However, Combined Pensioners and Superannuant’s Association Policy Co-ordinator, Charmaine Crowe, has identified a number of problems with the program.

At first payments are minimal: $1,373.80 for the first year. Thereafter payments increase more steeply: $5,495.10 for the second year; $12,364 for the third year; and $21,980.40 for the fourth year. After five years payments reach is $34,344.30. (These calculations apply only in the case of singles. Rates for couples can also be found here.)

Such provisions may provide reason for pensioners to continue work long beyond the official retirement age. But there is an argument to be made that the process is discriminatory. Perhaps the payments should be more evenly spread, providing a more immediate incentive.

In correspondence, Ms Crowe also raised concerns about the severity of the income test for working aged pensioners.

To begin with, the current fortnightly income test for aged pensioners “kicks in” at “$134 a fortnight” after which 40c in every dollar is taken from the pension. As Crowe argued, “they take two steps forward and one step back”.

Most elderly people have difficulties in finding work. And with a means test so severe as to provide a crushing deterrent - even the prospect of casual work is substantially less appealing.