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Cost of living 'driving pensioners into debt'

Posted October 14, 2008 07:31:00
Updated October 14, 2008 10:24:00

A report by National Seniors Australia has found the increasing cost of living is driving more pensioners into debt, with single pensioners suffering the most.

The survey of more than 1,000 pensioners found there needs to be an immediate increase in the single aged pension of $30 a week in line with other OECD countries.

Chief executive Michael O'Neill says 80 per cent of pensioners have difficulty saving money and the Federal Government needs to act immediately.

"We've had repeated recognition by Government, by the Senate Committee, the Prime Minister and the deputy prime minister and the Treasurer that the pension level, particularly the single aged pension is inadequate," he said.

"But we have to wait until July next year before there's some action on it.

"I think people are becoming rightly disturbed and certainly the cost pressures that they're under have only increased over that time."

Mr O'Neill also said pensioners are sacrificing important services in order to keep costs down.

"Forty-five percent of people receiving a government pension or allowance have put off going to the doctor or dentist in the past twelve months just to try and manage their costs," he said.

"Half of those who are divorced or separated or widowed and are receiving a government pension or allowance have had to use their annual bonus to pay off debt."

The Government has not ruled out increasing the aged pension to provide a stimulus to the Australian economy.

Tags: community-and-society, welfare, government-and-politics, federal-government, australia, act

Comments (25)

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• joey:

  14 Oct 2008 8:30:18am

  c'mon Australia, let's do something about this and help our seniors. Remember we'll all get old someday and do we all want to be going through the same problems.

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  • BJ:

    14 Oct 2008 9:31:02am

    Joey
    
    It's exactly this sentiment that has left most European nation's national budgets teetering on the point of destitution.

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• m1scha:

  14 Oct 2008 8:38:45am

  This has got to be for all pensioners, not just aged pensioners. To think the disabled can live on less shows how little regard politicians have for the less fortunate. There's not all that many disabled who can act as advocates for them as a group. Surprisingly that comes of being disabled. The aged actually have more going for them, when it comes to speaking up, and speaking out.

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  • Pensioner:

    14 Oct 2008 9:47:53am

    I agree that all pensioners deserve a break but are you sure of your facts. I could be wrong, my memory may be playing tricks, or pension payments may have changed since I received advice, when I retired, over a decade ago, but I thaught the disability pension was already more than the aged pension, if only in extras like no means test for the disability pension.
    
    Don't get me wrong, I am sure that disability pensioners deserve and need all the help they can get. The point I wish to make is the importance of getting you facts right before mounting an argument because if you don't, the argument can backfire. The best arguments are almost always the positive and concrete ones, so argue for disability pensioners on issues like the costs and give concrete examples.

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• D.Grumetza:

  14 Oct 2008 8:39:12am

  The goverment is way to late. To trendy playing with Wall Street. It wil bite them.

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  • Holdfast:

    14 Oct 2008 9:06:17am

    If every pensioner paid all their taxes when thwey were younger, instead of getting cash in the hand (not saying any did) They may not be in a position where they need more money.
    
    It's a fact that many age pensioners got their lump some at retirement; what they did with it who knows.
    
    But I know plenty of old people who have thought for the future, they paid off their morgage and bought a new small car for cash because they knew that if they had no debt that it is quite easy to live on the age pension.
    
    If you go down the pub or club, gamble, smoke or do other activities that will cause the younger tax payers to supplement your life style then that puts you in a bracket that is going to cost the current tax payer dollars.
    
    Look at other countries who do not have a wonderful place to live or the social security system to support them.
    
    If you are disabled because you are a smoker or overweight or an alcoholic then change your lifestyle and stop winging because you had all your life to save.
    
    Regards

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• Blondie:

  14 Oct 2008 8:45:41am

  I agree that there are many that need to be helped. But the government must be very careful here. I also know many self funded retirees who are now screaming poor because their dividends have plummeted. They forget that they have been doing very well, thank you, for years and their accountants have arranged their affairs so as not only do they pay no tax, they are also on the full or part pension.
  
  So there must be a well thought out formula so as the pensioners that really need help get it and we do not fund more overseas holidays for those that do not.
  
  
  

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  • JC:

    14 Oct 2008 9:21:40am

    Blondie, a few facts:
    
    (a) dividends have not "plumetted" as you put it. Share values have;
    (b) "their accountants have arranged their affairs so they dont pay tax." Sorry, but current tax legislation dictates this;
    (c) "they are also on part/full pension." If they fit the Centrelink criteria, then why shouldnt they just like any other eligible person?
    
    Any benefit is currently paid out to any recipient on the basis of income/assets tests. As for "funding more overseas holidays" I think you are casting a pretty broad net over a very few that may be doing quite well out of their own SMSF (and receiving a pension out of that for years of self contributions to which they are duly entitled).
    
    

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• amorous octogenarian:

  14 Oct 2008 8:51:07am

  nice photo caption, chaps ;-)
  
  sad but true ... not to mention the costs of food and clothing !!!

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  • Speth:

    14 Oct 2008 9:49:04am

    why do you think it is only the pensioners who are struggling on this front? With global financial uncertainty, oil prices continuing at record highs (thanks to greedy americans and futures trading)...why is it that the only people getting this kind of attention are the pensioners? There are plenty of people out there - singles and families alike - who are struggling with the rising costs of food and clothing, and the fuel required to get them to work so that they can pay their taxes for you to live off. Maybe when the crisis eases up a bit and those of us who pay tax to maintain the "welfare system" are back on our feet, things will likewise improve for you.....EVERYONE is doing it tough, not just the "blue rinse set"

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• Meg:

  14 Oct 2008 9:01:47am

  It would be nice to see less focus on 'single' people. Pensioners lose 16% of their pay just for entering a relationship. Imagine the housing crisis we would face if working people took a 16% paycut just for living with their spouse and kids.
  
  And when are they going to mention Disability Support?
  
  Most older people have a full working life behind them when they had an opportunity to save for their later years and buy a home and assets.
  
  Many disabled people don't ever have the opportunity to do this. They also have high medical and transport costs and many have families to support as well.
  
  It would also be very nice if politicians stopped using income-challenged people as media footballs. It's difficult enough to live in poverty without being used for political point-scoring.

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  • m1scha:

    14 Oct 2008 9:08:40am

    There are many reasons why people appear not to have saved for their retirement, but unfortunately like the genuinely disabled, they get lumped in with those who abuse the system.

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  • DDD:

    14 Oct 2008 9:23:13am

    It's not just pensioners who get charged for relationships: getting married cost my wife and I somewhere between $50,000 and $100,000. (Austudy for some years, a first home-owner's bonus and stamp duty exemption for one of us.)

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  • magoo:

    14 Oct 2008 9:28:01am

    Interesting take on the effect of wedding bells and tax. I know at least three couples who filed for an amicable divorce just before retirement in order not to be disadvantaged by this anomaly. One partner in each relationship had to move out of house of course. That simply made the luxury yacht an abode for one evicted partner, the hobby farmhouse an abode for another and the ski-lodge for the other.
    
    Another fellow decided to cheat the system by taking in his long-time younger lover (second wife?) as a lodger. 'Her originally indoors' never discovered the relationship.
    
    RIP Matrimony?

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  • PassTheButter:

    14 Oct 2008 9:39:44am

    Sorry Meg, but the focus on single people is the only thing that makes the argument credible.
    
    Once you exclude mortgage payments (on the basis the retirees have had ample time to pay off a mortgage or if they haven't they can get rent assistance from Centrelink on top of their pension) then my wife and I live on less than a couple's pension payment, and we are by no means at the bottom of the income scale.
    
    The reason couples on the pension take a "pay cut" is because its not about pay, its about covering costs, and couples enjoy a cost saving of more than 16%. This is actually where we're out of line with other OECD countries, we're more generous to couples than most.
    
    But I certainly agree that the Disability Pension is being unfairly ignored by the vocal majority.

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  • Pensioner:

    14 Oct 2008 10:00:33am

    To Meg
    
    Come off it Meg. Half the rent or morgage has got to be a lot more that 16% of the single pension. Then if you add consider the difference between half the electricity bills, maintence costs, cleaning costs etc. against the full costs single pensioners pay, your argument for couples begins to read like a comedy sketch.
    
    However, I do agree that disability pensioners should get more help.

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• Neil:

  14 Oct 2008 9:12:49am

  I am aware of many home owner pensioners that are selling their soul to the banks by way of reverse mortgage.
  
  Having the reverse mortgage gives them enough cash to maintain their homes and pay the large land rates and water bills etc.
  
  However, the downside is that the pensioner on their death has nothing to leave the grandkids etc, the banks generally take the lot with the compound interest.

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  • BJ:

    14 Oct 2008 9:29:50am

    Life isn't fair Neil.
    
    You are not 'owed' anything in retirement by society. Let's all get over this silly little notion.
    
    Don't like the big empty house ? Sell it and move to something more manageable and realise some extra cash to earn a little more interest on.

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• BJ:

  14 Oct 2008 9:27:33am

  Every $10 per week rise in all pensions costs taxpayers $4 billion per year. The nation's surplus is fully erased at $60 per week, and that means our nation's savings for a rainy day will all be spent on consumer goods and services. This is hardly 'nation-building' stuff.
  
  No amount of pension rise will be deemed acceptable, and will be rubbished as not enough by exactly those who think they need it most.
  
  Australians should really consider themselves downright lucky there is any safety net at all.
  
  As repugnant as I find regular contributor Greg H's politics, he said it right here:
  
  "Socialism does not work. It simply fuels resentment and envy".

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• Mick.:

  14 Oct 2008 9:29:33am

  OK Govt pull your finger out and forget about this pension review due for release next year. Increase the pension now and let those people - our parents and grandparents - who have made the country the best in the world the chance to enjoy their retiring years without the agony of financial stress. We owe it to them.
  
  Stop politicising and start concentrating on social justice.
  
  The true test of a country is how it looks after its most vunerable and its not the stuff mired in spin, self promotion and reviews.

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• Ivan:

  14 Oct 2008 9:30:44am

  It's all about the rhetorical process at the moment.
  
  The pensioners WILL get their thirty bucks ... but it will just take "more consideration" by the government first.
  
  Why?
  
  Because the opposition talked up a rise before the government did, it's just a matter of pride - they can not be seen to be dancing to the tune of the opposition.
  
  Follow?
  
  So they are going to "fast track" a report (that would be a "first" for the Rudd administration!) and come up with the cash!
  
  But ... and here's the kicker ... don't expect $30!
  
  My guess is for more than $30.
  It will be something academic like: "$38.50"
  
  Now that would shut up all the critics, and shore up the ratings polls.
  
  Maybe the opposition should keep quiet so this narcissistic government we have right now can get on with putting the help where it is really needed.

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  • m1scha:

    14 Oct 2008 9:40:35am

    $38.50, nice round figure.
    
    That is exactly what a pensioner getting their $500 advance pays back a fortnight over 13 fortnights. Get that a week, and it equates to $2000 a year.
    
    As I said, a nice round figure.

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  • sffc05:

    14 Oct 2008 9:52:55am

    What we really have is an opposition grandstanding at every opportunity, making lots of noise, and thinking they actually run the country from opposition.
    
    It's all been said before, if the Liberals are so concerned about pensioners, why didn't they act on it when they had the chance?
    
    Why? Too busy not spending where they should have been trying to make themselves out to be competent economic managers.

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• Alan:

  14 Oct 2008 9:39:03am

  All pensions need an increase, I am on a carers pension and my wife a dissability pension. None of this was our choice or had any thing to do with our age, it happened overnight and could happen to any one, so dont be too hard on people.We have used what little super we had and have sold our home.

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• Samule DiGiovanni:

  14 Oct 2008 10:00:23am

  First of all where was Mr O'Neill when Howard was the prime minister regarding pension rate it is amazing that he has now making noices since the Rudd has been elected and has been in power just on 11 months what he dosent mention that all pensioners have recieved approx $20 p/ week this fiancial year and yes we all know that the pensioners are doing it tough but surely we should have a review so that goverement can implement a policy that it is substional long term basis and has far has the oppositon stance lets not forget their policy ovber 2 miliion pensioners recieve not a cent so I ask Mr turbull do you belive your stunt his fair

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