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 15: Appendices » Appendix 9
The following tables and commentary provide supplementary information about the Age Pension.
Figure 4.1 Take-up of Age Pension, June 1999 - June 2009
There are more women than men receiving the Age Pension (57.2 per cent in June 2009), due to their longer life expectancy and lower qualifying age for the Age Pension. More women than men receive the full rate of the Age Pension-a total of 65.3 per cent of female age pensioners are paid at full rate, compared with 61.7 per cent of males. This reflects that on average women accumulate lower income and assets to provide for retirement.
Some 42.8 per cent of age pensioners are single. Singles tend to be older than partnered pensioners and are more likely to receive the full rate of pension than partnered pensioners (70.9 per cent compared with 58.4 per cent). As at June 2009, 39.3 per cent of age pensioners assisted by Centrelink were born overseas.
Figure 4.2 Percentage of age pensioners born overseas, 1999-2009
In June 2009, there were 33,615 Age Pensions paid under agreements (excluding New Zealand and the United Kingdom), averaging $4,740 per year per person. An additional 9,851 Age Pensions were paid under the agreement with New Zealand, at an average of $5,087 per year per person. Under the former agreement with the United Kingdom, 151 Age Pensions were paid, averaging $8,406 per year per person.
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|---|---|
| Age Pension-single | 100.0 | 100.0 | 102.1 | 103.9 | 105.1 | 105.6 |
| With Rent Assistance | 100.0 | 100.0 | 101.7 | 103.2 | 104.2 | 104.7 |
| Age Pension-couple | 100.0 | 100.0 | 102.1 | 103.9 | 105.1 | 105.6 |
| With Rent Assistance | 100.0 | 100.0 | 101.8 | 103.5 | 104.6 | 105.0 |
Figure 4.3 Maximum payments to recipients of pension: index of real pension rates, June 2004 to June 2009 (for data, please refer to Table 4.23)1, 2
1 Index of real value results are identical for Single-pension only and Couple-pension only.
2 While there were pension increases in line with the Consumer Price Index (CPI) from 2004 to 2005, there was no increase in line with Male Total Average Weekly Earnings, and therefore no real increase is represented in the graph.
Figure 4.4 Increases to the single pension rate under actual and alternative scenarios, March 2004 to March 2009
CPI = Consumer Price Index; MTAWE = Male Total Average Weekly Earnings.
Note: From July 2000, to compensate pensioners for the impact of the Goods and Services Tax (GST), the maximum rate of pension increased by 4 per cent (half of which was a payment in advance of the normal March 2001 indexation increase). This increase was known as the Pension Supplement. It increased in line with the CPI and was paid in addition to the base rate of pension that is set to at least 25 per cent of MTAWE.
The value of the GST Pension Supplement is incorporated into the new Pension Supplement from 20 September 2009.
| Single ($) | Couple combined ($) | |
|---|---|---|
| Income free area (per fortnight) | 138 | 240 |
| Asset value limit for home owners (home not included) | 171,750 | 243,500 |
| Asset value limit for non-home owners | 296,250 | 368,000 |
Figure 4.5 Proportion of age pensioners receiving a part-rate pension, June 1999 to June 2009
The global financial crisis reduced the private income and assets of many seniors. The Age Pension system responded as intended to provide additional assistance to seniors where it is needed. Figure 4.5 reflects this, showing that in 2008-09 there was a decrease in the proportion of age pensioners receiving a part-rate pension. This is mainly due to people moving from part-rate pension to full-rate pension as a result of reductions in their assessed income and assets. The assessed income of many pensioners decreased as a result of a series of reductions in the social security deeming rates, in response to lower returns on financial investments. Reductions in asset values for managed investments and shares as a result of the global financial crisis also contributed to higher pension payments. The decrease in the proportion of age pensioners receiving a part-rate pension is contrary to the longer term trend increase.
However, in 2008-09 it continued to be the case that new entrants to the Age Pension had significantly higher average private income and assets than those of the full Age Pension population. This means that the proportion of Age Pension entrants who receive a part-rate pension is much higher than the proportion of part-rate pensioners in the entire Age Pension population. In the year to June 2009, 58.8 per cent of Age Pension entrants were granted at part-rate, while 36.3 per cent of the full Age Pension population received a part-rate pension.
There is increasing diversity in income and asset holdings of age pensioners. Some pensioners have little private income or assets. They may have spent considerable parts of their working life out of the workforce, and/or much of their working life pre-dated Superannuation Guarantee arrangements. These factors restrict capacity to accumulate savings. On the other hand, new entrants have much higher average assessable assets than the average for the full age pensioner population. This in part reflects that new entrants have over their working lives more greatly benefited from superannuation arrangements. Also, in 2008-09, the global financial crisis resulted in many new entrants because their income and assets had dipped in value to below the income test and assets test cut-out points.
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Single age pensioners | 3,484 | 3,850 | 4,504 | 3,652 |
| Partnered age pensioners | 4,166 | 4,537 | 5,327 | 4,369 |
Ratio of assessed income to total income (including Age Pension):
The Pension Bonus Scheme is intended to encourage older Australians to defer the Age Pension and continue working beyond Age Pension age. It provides a one-off tax-free lump sum to eligible people and is paid when a person registered in the scheme finally claims and receives the Age Pension.
At June 2009, 12 per cent of people over Age Pension age were working. Of these, 26 per cent received the Age Pension while they worked and another 22 per cent were registered in the Pension Bonus Scheme. As at 30 June 2009, 180,274 people had registered in the scheme since it commenced on 1 July 1998.
Since 20 September 2009, the Pension Bonus Scheme has been closed to new entrants, with registrations limited to those who met the age and residence requirements for the Age Pension before 20 September 2009.
FaHCSIA's seniors' publications promote independence and self-reliance to retirees and pre-retirees and provide information on planning, saving and preparing for retirement, investment options and the effective use of savings for self-support. We distributed around 26,650 copies of these publications during 2008-09.
The Financial Information Service is a free information and education service available to all Australians through Centrelink. The service aims to ensure that people have sufficient information to help them make effective use of their financial resources for self-support, make informed decisions about retirement issues and have adequate financial preparation for a retirement that allows participation in their community. FaHCSIA works with Centrelink in regard to the Financial Information Service's scope and themes.
At 30 June 2009, there were some 147 full-time equivalent Financial Information Service officers throughout Australia. Between July 2008 and June 2009, officers processed approximately 183,000 phone calls and conducted approximately 85,000 face-to-face interviews. Over the same period 74,000 people attended seminars. The seminars have a strong focus on encouraging pre-retirees to plan for retirement. Forty-four per cent of attendees were under age 55.