Pension pain: 'Four per cent, will it make a difference to people? Absolutely not'
| 24.09,22. 02:04 AM |
Pension pain: 'Four per cent, will it make a difference to people? Absolutely not'
With every second voter in Australia being over 50 years of age and four million Aussies in the retirement phase of their life, many of our seniors have been keeping a keen eye on what's being offered by Canberra.
While there has been an increase to the pension, some have questioned the benefits.
Finance expert Joel Gibson said while the 4 per cent increase is the biggest pay rise seen in 12 years it doesn't even go far enough to match inflation.
"Four per cent, will it make a difference to people? Is it going to solve the problem? Absolutely not," Gibson told A Current Affair.
Ian Henschke from National Seniors said the pension rise is just part of the six monthly increase that's done to account for the cost of living.
"I think the government could look at increasing the pension every three months rather than every six months when we've got runaway inflation, because it does help people more with cost of living and this latest increase is a good one because people really need it," Henschke said.
National Seniors have been campaigning to let pensioners work longer hours without losing any of their benefits.
The government has now agreed to let pensioners earn an extra $4000 this financial year from December.
But Gibson said the change will barely "scratch the surface" because it's "only lasting for about six months".
"Compare that to New Zealand where you can see that 25 per cent of pensioners do some work - in Australia it's 15 per cent - and that tells you everything you need to know about what's wrong with our policy settings," Gibson said.
"We've got 5000 job vacancies, so we're saying for the next two years, why not adopt the NZ system, where you simply work and pay tax?" Henschke added.
What's got a lot of older Aussies talking is the Albanese government's plan to encourage empty nesters to downsize and free up larger homes for younger families.
If it gets through parliament they plan to give retirees a two-year exemption from the assets test, which they'd normally face for selling property, if they collect any part of the pension.
"It'll give people a bit of extra time to build and renovate perhaps a new home and it will probably tip the balance in favour of downsizing for some who are already thinking about it," Gibson said.
Henschke said the retirement income system is quite complicated where it currently stands.
"Even this downsizing policy is quite complicated," he said.
"What we suggest the government does is, if you're 80 years of age and you've got a homecare package, you should be able to downsize without it affecting your pension."
Now there is also the prime minister's promise to cut the cost of more medicines available under the pharmaceutical benefits scheme or PBS, which could save the pensioners more money too.
"They're estimating it's a $300 saving if you fill two scripts a month, many people fill many more scripts than that a month so this one I think is significant," Gibson said.
