Contents
- Part 1 Executive Summary
- Part 2 Performance reporting
- Part 3 Corporate governance and accountability
- Part 4 Appendices
- Part 5 Financial Management
Annual Report 2008–2009
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Annual Report 2008–2009
Annual Report 2008–2009 » Chapter 7: Outcome 2 » Output Group 2.1
Output Group 2.1 contributes to Outcome 2 by ensuring that senior Australians in need are provided with adequate income support, and by providing allowances and concessions to senior Australians. Information services and incentives assist seniors to make the best use of their savings, investments and income sources to enhance their standard of living.
The Age Pension is an income support payment designed to ensure that seniors have an adequate standard of living. The qualifying age is 65 years for men and 64 for women, increasing to 65 by 2013. The rate of the Age Pension is indexed so that pensioners are compensated for increases in the cost of living. While the Age Pension is means tested, incentives are maintained for the productive use of private savings and investments and for participation.
Prior to 20 September 2009, the maximum basic rate and pension supplement for the Age Pension are indexed twice a year in line with increases in the Consumer Price Index (CPI). If, after CPI adjustment, the maximum single basic rate is less than 25 per cent of Male Total Average Weekly Earnings, it is adjusted up to that benchmark, with proportional flow-on to the maximum partnered basic rate.
While indexation in line with CPI increases ensures payment rates reflect increases in prices, the Male Total Average Weekly Earnings benchmark ensures pensioners share in any increases in community living standards as measured by the growth in wages.
From 20 September 2009, enhanced pension indexation arrangements apply, as part of Secure and Sustainable Pension Reforms announced in the 2009–10 Budget.
Additional information about the Age Pension can be found on page 350.
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| Number of clients assisted | ||
|---|---|---|
| Estimate | 2.10 million | The variance is +0.02 million. The actual result is similar to the estimate. |
| Actual | 2.12 million | |
| Percentage of estimated aged population who receive Age Pension | ||
| Estimate | 66% | The variance is +2.7%. The variance can be partially attributed to the global economic downturn and to declining rates of claims for veterans' pensions. |
| Actual | 68.7% | |
| Maximum payments to recipients—index of real value | ||
| Estimate | Payments indexed to the CPI | No variance. |
| Actual | Payments indexed to the CPI | |
| Maximum payments to recipients, single pension base—as a percentage of Male Total Average Weekly Earnings | ||
| Estimate | At least 25% | No variance. |
| Actual | At least 25% | |
| Percentage of age pensioners receiving less than the full-rate because of the means test | ||
| Estimate | 42% | The variance is –5.7%. The variance is the net result of a number of factors, including movement of pensioners from part-rate pension to maximum-rate pension as a result of effects of the global economic downturn. The social security deeming rates were reduced to reflect lower returns on financial investments, and there were reductions in the value of assessed assets such as shares and managed investments. |
| Actual | 36.3% | |
| Average base-rate pension reduction per part-rate pensioner per year | ||
| Estimate | $3,070 | The variance is +$613. The variance is the net result of factors such as higher average asset holdings of those commencing Age Pension, movement of part-rate pensioners with lower asset holdings to full rate, and other economic downturn effects. |
| Actual | $3,683 | |
| Average assessable assets for people receiving maximum-rate Age Pension | ||
| Estimate | $32,100 | The variance is +$8,276. The variance is the net result of factors such as movement of pensioners from part-rate pension to maximum-rate pension and other economic downturn effects. |
| Actual | $40,376 | |
| Average assessable assets for people receiving less than maximum-rate Age Pension | ||
| Estimate | $133,800 | The variance is +$10,779. The variance is the net result of factors such as higher average asset holdings among those commencing Age Pension (whether at Age Pension age or as a result of the global economic downturn), other economic downturn effects and increases in means test cut-out points. |
| Actual | $144,579 | |
| Average assessed income per year for people receiving maximum-rate Age Pension | ||
| Estimate | $970 | The variance is –$63. The actual result is similar to the estimate. |
| Actual | $907 | |
| Average assessed income per year for people receiving less than maximum-rate Age Pension | ||
| Estimate | $9,800 | The variance is –$187. The actual result is similar to the estimate. |
| Actual | $9,613 | |
| Percentage of age pensioners with private earnings | ||
| Estimate | 3% | The variance is +0.2%. The actual result is similar to the estimate. |
| Actual | 3.2% | |
| Average earnings per year of partnered age pensioners in employment | ||
| Estimate | $9,100 | The variance is +$3,912. The variance is the result of increases in reported earnings from partnered pensioners in employment, partly reflecting higher workforce participation among this group. |
| Actual | $13,012 | |
| Average earnings per year of single age pensioners in employment | ||
| Estimate | $11,500 | The variance is –$1,212. The variance is the result of decreases in reported earnings from single age pensioners in employment. |
| Actual | $10,288 | |
| Percentage of income units headed by a person aged 65 years and over with government pension contributing less than 50% of income | ||
| Estimate | 29% | The variance is +5.8%. The 34.8% figure is drawn from the recently released Household Income and Income Distribution 2007–08 Australian Bureau of Statistics survey. The estimate of 29% was based on the previous (2005–06) survey. The variance reflects an increase over this period in the proportion of seniors' income from private sources. |
| Actual | 34.8% | |
| Number of age pensioners paid Rent Assistance | ||
| Estimate | 219,800 | The variance is +9,797. The actual result is similar to the estimate. |
| Actual | 229,597 | |
| Control of incorrect payment and fraud—accuracy of administered outlays (total dollars correctly paid) as measured by the Random Sample Survey | ||
| Estimate | Accuracy of administered outlays is greater than or equal to 95% | The ‘estimate' is the agreed benchmark between FaHCSIA and Centrelink. The ‘actual' figure is the estimated accuracy of administered outlays derived from Random Sample Survey data. |
| Actual | 98.5% | |
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In 1993, eligibility for the Pensioner Concession Card was extended to all part-rate pensioners and certain older long-term allowance recipients. In response to concerns from the state and territory governments that an increase in the number of eligible card holders would have an impact on their state concession programs, the Government agreed to provide an annual payment as compensation for the increased costs of core concessions—utilities, municipal and water rates, public transport and motor vehicle registration.
From 1 January 2009, this item became an element in the new National Partnership on Certain Concessions for Pensioners and Seniors Card Holders and funding was allocated through the Treasury portfolio.
| Certification from state and territory governments that they are complying with the agreement | ||
|---|---|---|
| Estimate | 100% | No variance. |
| Actual | 100% | |
Great Southern Rail (GSR) is under contract to provide concessional fares on its services (the Indian Pacific, the Ghan, and the Overland) to pensioners, certain veterans and holders of Commonwealth Seniors Health Cards.
From June 2009, concessions were also made available to holders of State Seniors Cards under the Government's election commitment to provide reciprocal public transport concessions for Seniors Card holders.
| Number of journeys taken by eligible customers on applicable GSR services during the financial year | ||
|---|---|---|
| Estimate | 65,000 | The variance is –5,750. The program is subject to demand variances. |
| Actual | 59,250 | |
| Card type | Card holder numbers | Listed dependants |
|---|---|---|
| Health Care Card | 1,148,958 | 992,138 |
| (Low Income) Health Care Card | 381,356 | 21,185 |
| Pensioner Concession Card | 3,424,817 | 1,011,469 |
| Commonwealth Seniors Health Card | 279,564 | 0 |
| Total | 5,234,695 | 2,024,792 |
The Government's main purpose in issuing concession cards is to provide access to Pharmaceutical Benefits Scheme prescription items and certain Medicare services at cheaper rates. Other concessions that may be offered to card holders are the responsibility of state, territory or local governments and authorities, and some private organisations.
Concession cards issued by the Australian Government include:
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Seniors Concession Allowance is a payment for holders of the Commonwealth Seniors Health Card to help with household costs. From 20 March 2009, the annual rate of the allowance increased from $514.00 to $518.80 for cardholders, paid in quarterly instalments.
| Percentage of eligible Commonwealth Seniors Health Card holders receiving Seniors Concession Allowance | ||
|---|---|---|
| Estimate | 97% | The variance is –1%. There has been a slight increase in the number of cardholders who elect not to receive the payment. |
| Actual | 96% | |
Telephone Allowance assists Commonwealth Seniors Health Card holders with the cost of maintaining a telephone service. The allowance is paid quarterly and is available to cardholders where they or their partner are a telephone subscriber. From 20 September 2008, Telephone Allowance was increased from $88.00 to $92.00 a year. Where cardholders or their partner also have an internet connection, the higher rate of Telephone Allowance increased from $132.00 to $138.40 a year.
| Percentage of eligible Commonwealth Seniors Health Card holders receiving Telephone Allowance | ||
|---|---|---|
| Estimate | 96% | No variance. |
| Actual | 96% | |
Utilities Allowance is a payment for income support recipients of Age Pension age, of Veteran Pension age, or receiving Mature Age, Widow or Partner Allowance, Wife Pension, Widow B Pension, Disability Support Pension, Carer Payment or Bereavement Allowance. Utilities Allowance provides assistance with regular household utilities bills. From 20 March 2009, the Utilities Allowance increased from $514.00 to $518.80 a year, for singles and couples combined, paid in quarterly instalments.
| Number of eligible income support customers paid Utilities Allowance | ||
|---|---|---|
| Estimate | 2.93 million | The variance is +.07 million. The variance reflects slightly higher than anticipated demand for Utilities Allowance. |
| Actual | 3.0 million | |
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