Poverty pummels pensioners in Australia

Jacob Joseph 7 January 2016

superannuation

Australia is one of the most risky places for retirees as more than a third of pensioners live in poverty.

The OECD report Pensions at a Glance 2015 found Australia ranked second last on social equality compared to 33 other countries.

The report concluded that 36% of Australian pensioners are living in a state of poverty. The Australian government spends very little on pension payments in comparison to OECD standards.

Australia spends 3.5% of its gross-domestic product (GDP) on public pensions, whilst OECD countries on average spends 7.9% of GDP to public pensions.

Australians fared a marginally better than South Koreans, 50% of whom live in poverty. This result made South Korea the worst ranking country mentioned in the report for the financial security of older people.

The Global Age Watch Index 2015 ranked Australia the lowest in the region for income security because of the below OECD average pension coverage and the exponentially increasing rate of older people who suffer from poverty conditions.

Combined Pensioners and Superannuants Association senior research adviser, Paul Versteege said base pension rates are very low in Australia.

In March 2014, the maximum single rate of pension with the Pension Supplement and Energy Supplement was $843 a fortnight - equalling $21,570 annually.

Ian Yates, chief executive of Council on the Ageing said, despite well-needed improvements to pensions, increasing pension contributions are very unlikely and the focus should shift to superannuation contributions.

Although $21,570 might seem like a fair amount of money, the basic living cost in Sydney is relatively high compared to other countries.

The Age Pension is payable from the age of 65 for men and women. The pension age will increase by six months every two years from 2017. By 2023, the eligible age to receive a pension will be 67.

The minimum age for withdrawing superannuation benefits is 55 for people born before 1 July, 1960 but increases gradually for people born after this date. The key lesson? Make sure you've carefully planned for your superannuation needs.

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5 Responses

  1. Default Gravatar
    HughOctober 12, 2016

    Can I rent my home and still get the old age pension or leave it vacant for a period while I go away Thanks Hugh

    • Staff
      ElizabethOctober 12, 2016Staff

      Hi Hugh,

      Your assets and income will be taken into account when determining your payment rates for the age pension. You can find out more about eligibility criteria on this page, but if you want to confirm your eligibility you will need to contact the Department of Human Services directly.

      Hope this helps,

      Elizabeth

  2. Default Gravatar
    GeJune 10, 2016

    When I qualify for the age pension at 65.5yrs my wife will be 62yrs, will we get the couples payment.

    Will my wife who will be under pension age have to apply for some over payment, we pass the assets ok.

    • Staff
      ElizabethJune 15, 2016Staff

      Hi Ge,

      You will apply for the couple combined payment but only you will receive the payment, not your wife. Your wife’s income will be considered and your joint assets will also be considered.

      I hope this helps,

      Elizabeth

    • Default Gravatar
      JoanJuly 14, 2016

      Hi Ge
      My husband has just turn 65 and has been allowed the aged pension. We could not apply for the couple payment. I am 62, born in 1954 and can not apply for the aged pension until aged 66 years. I am on “job seekers” which is really silly since there is absolutely no work in the country for an old office worker having moved to the country to reduce the stress hubby was under after his heart attack. Luckily we own our place and it is under two hectares. That’s another little thing that isn’t well known, pension aged persons on land over 2 hectares may face issues.

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