2009 Women’s Budget Statement
Secure and Sustainable Pensions Reform
Women remain disproportionately reliant on Australia’s pension system, largely as a result of their broken work patterns due to responsibilities for care of children and other family members. Women are the majority of pensioners in Australia - 57.4 per cent of all age pensioners and 71.8 per cent of single age pensioners are women. Women are nearly two-thirds of carer payment recipients and 43.8 per cent of those on the Disability Support Pension (DSP). An increasing proportion of entrants onto DSP are women, currently representing 48.6 per cent of new entrants.8
| Welfare recipient (proportion by sex), 2008* | ||
| Pension or allowance type | Female (%) | Male (%) |
| Age Pension | 57 | 43 |
| Disability Support Pension | 44 | 56 |
| Carer Payment | 68 | 32 |
| Wife Pension | 100 | 0 |
| Widow B Pension | 100 | 0 |
| Bereavement Allowance | 83 | 17 |
| DVA Service Pension | 47 | 53 |
| DVA Income Support Supplement | 100 | 0 |
| Total | 56 | 44 |
* Pension customer numbers derived from Centrelink administrative database, fortnight ending 5 December 2008. DVA customer data is at 2 January 2009 and will be published in the upcoming DVA Pensioner Summary Statistics series. Data extracted from J Harmer, Pension review report 27 February 2009, Department of Families, Housing, Community Services and Indigenous Affairs, Canberra, 2009.
It is therefore vital for women’s economic futures that these pensions deliver an adequate standard of living.
The Government is delivering on its commitment to reform the pension system. Australia’s 3.3 million age pensioners, disability support pensioners, carers, wife pensioners and veteran income support recipients will benefit from the Government’s $14.2 billion pension reform package. Starting on 20 September 2009, pensioners on the full rate will receive an increase of $32.49 a week for singles, and $10.14 a week for pensioner couples (combined). This will bring the single rate of pension from 60 per cent up to two thirds of the combined couple rate. It will increase the maximum base rate of the single pension from 25 per cent to 27.7 per cent of the Male Total Average Weekly Earnings, an increase of more than 10 per cent. These increases provide significant additional financial support for older women who comprise almost three quarters of single age pensioners.
To simplify payments, a number of existing supplements and allowances will be integrated into a new Pension Supplement. The Supplement will replace the GST supplement, pharmaceutical allowance, utilities allowance and the internet/telephone allowance. The Supplement will be indexed by the Consumer Price Index and will be paid fortnightly in the first instance and, from July 2010, pensioners may to choose to receive some of the Supplement quarterly. This will give pensioners greater flexibility over the way that they receive payments and manage their finances.
To provide additional assistance to carers, the Government will introduce a new annual Carer Supplement of $600 each year for Carer Payment recipients. These new supplements will cost $1.8 billion over five years, providing ongoing financial certainty for carers (predominantly women), which the previous “one off” lump sum payments did not.
To ensure that pensions better reflect the cost of living increases faced by pensioners, a new Pensioner and Beneficiary Living Cost Index will be developed. It will be specifically designed to reflect changes in the cost of living experienced by pensioner and beneficiary households. The base pension will be increased by whichever is the greater, this index or the CPI. Wages benchmarking through the Male Total Average Weekly Earnings will continue.
To ensure that the package is affordable and sustainable over the longer term, it includes measures to better target pension payments, including tightening the income test. A transitional safety net will apply.
Age and service pensioners will be able to keep more of the money they earn through part-time work under a new Work Bonus. From 20 September only half of the first $500 of employment income earned per fortnight will be assessed under the income test. The Work Bonus will not be available to pensioners paid under transitional arrangements.
Notes
8J Harmer, Pension review report 27 February 2009, Department of Families, Housing, Community Services and Indigenous Affairs, Canberra, 2009.
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