The Age Pension was introduced 110-years ago – ‘it’s time to modernise it’

The Age Pension was first introduced in 1908. Source: Shuttershock.

More than a century has passed since the Age Pension was first introduced in Australia in June 1908, delivering support for older generations and helping people to live more comfortably in later life.

In the 110-years since it became legislation, we have seen huge innovations and social developments that we could have barely even dreamed of back then – and now advocates are calling for the government to overhaul the way the Age Pension is calculated, after it was revealed that 26 per cent of those over the age of 65 in Australia are living in poverty.

With factors such as rising house costs and the roll-out of the NBN only heightening the situation, The Benevolent Society launched their Fix Pension Poverty campaign in a bid to pressure the government into reforming the current system, claiming that it is “inadequate” and “fails to provide a decent standard of living” for the 1.5 million older Aussies who rely on the Age Pension as their main source of income.

Read more: ‘I make financial decisions month-by-month on the pension’.

Joel Pringle, Advocacy Campaigner at The Benevolent Society, said: “The introduction of the Age Pension in 1908 was such a major advance in alleviating deprivation and poverty that people were facing.

“But it is now 110 years since the age pension was introduced, maybe it’s time for the government to have another go at modernising it.”

The campaign follows the charity’s recent report, The Adequacy of the Age Pension in Australia, which they supplied to the government, outlining eight “achievable” recommendations they believe would improve the lives of those older Aussies who are experiencing financial hardship in retirement.

However Pringle says pension reform is currently not a “priority” in Canberra, adding: “We did what the government asked and provided evidence of the problem, the government said ‘we can see that’s the case but it’s not a priority for us’. That’s when we realised it needed to become a campaign to target politicians and make sure they do think it’s a priority. They know that there’s an issue there, but have avoided taking the hard measures to actually help the people who need it most.”

Read more: Labor slams Turnbull’s ‘stupid’ pension eligibility plan.

The recommendations include free dental care for age pensioners, the introduction of an independent tribunal to set pension base rates and a rebate for broadband services to ensure older Aussies are not cut off from vital services due to price hikes as a result of the NBN.

Pringle said: “These recommendations are absolutely achievable. The biggest thing the government could do to alleviate pension poverty, which is increasing commonwealth rent assistance, could be done tomorrow. Some of our other recommendations, such as free dentistry, that would take more time to implement.

“The last thing we want is to do another report in a few years and hear the same stories – to hear of people mashing food to avoid visiting the dentist or people turning their hot water systems off to save a bit of money.”

Read more: Some weeks it’s about ‘surviving’ on the pension.
Starts at 60 readers are among those struggling to make ends meet on the Age Pension, and 74-year-old Janet Millar, from Townsville, Queensland, opened up about her own difficult experience, revealing that the Age Pension left her, and husband Peter, with no option but to sell their home and move into a caravan in a bid to get by.

She said: “My husband and I have been existing on the pension for eight years now. Financial problems forced us to sell our house. We ended up with just enough money to buy a fairly new caravan and, until recently, lived life on the road. Although we enjoyed the freedom of travelling, we had to budget very carefully to make ends meet.

“Only the bare necessities are affordable, and any luxuries are out of the question. So far, we have survived each crisis, but we keep living in dread of what might be around the corner. Some days it is hard to feel grateful for what we do have and maintain a sense of humour.”

While Sharon Milford believes Aussies are “lucky” to have the pension scheme, but would like to see it drastically overhauled to allow people to live a full life, rather than just “surviving”. She said: “The age pension is ok and we are a lucky country to have it., but it needs to be overhauled so that not only can we survive but maybe have a treat now and again. Things go up and up and the pension very rarely changes.  It’s not keeping up with the times.”

The recommendations made by The Benevolent Society are:

  • Establish an Independent Age Pension Tribunal to set the base pension rate.
  • Increase the maximum rate of rent assistance.
  • Index rent assistance to housing costs instead of Consumer Price Index (CPI).
  • Expand the provision of free dentistry for pensioners.
  • Run an awareness campaign highlighting medical supplies subsidised for healthcare card holders.
  • Coordinate or replacing state-based utilities rebates.
  • Provide a broadband supplement or rebate.
  • Establish a roundtable to review services provided to age pensioners.

The Benevolent Society teamed up with National Seniors to launch the campaign. You can find out more here.

Have you struggled to get by on the Age Pension? Do you think the system is need of reform?

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial situation, objectives or needs. That means it’s not financial product advice and shouldn’t be relied upon as if it is. Before making a financial decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services advice.

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