Are pensions on the line? New government report takes aim at seniors’ welfare 229



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Last week’s Tax and Transfer Incidence in Australia paper by the Productivity Commission highlighted some interesting things about tax. And while everyone’s worried about GST and welfare, there is a larger issue at hand: pensions.

The report showed the enormous amount of money being spent on welfare, specifically on the age pension. It’s becoming increasingly clear that the issue of taxation and welfare in Australia is all about the ageing population.

According to The Drum, it’s easy for everyday Australians, the media and even politicians to direct their focus on dole bludgers and the unemployed, however when the stats are brought out, it’s obvious where the majority of the government’s welfare spending is going: on the over 60s.

The age pension makes up about 31 per cent of welfare, and total assistance to the aged accounts for about 40 per cent. What that also means is that while the age pension is the greatest source of welfare, most of the tax paid is by those younger than 60. So how can it be made fairer? Or is it already?

Our welfare system is based around income and less around wealth and assets – in fact the family home is not included in assets tests.

The Productive Commission’s report found a “significant proportion of transfers are paid to families with net assets of between $200,000 and $1,000,000. These are mostly age pension payments to families that own their own home”.

But perhaps the most interesting part of it all is that those with wealth greater than 60 per cent of Australians received more welfare payments than those in every single income bracket below them, except for the bottom income bracket.

And this also applies to those on the age pension, with the wealthier receive more welfare than those with less wealth.

The welfare system works well if you exclude the age pension as those who pay tax all their life will gain benefits at a later date – the only issue is that less and less people on welfare are paying tax because of our ageing population.

“As population ageing places pressure on the age pension, and more people use superannuation and private savings to fund retirement, the tax treatment of savings will become increasingly important”, says the report.

It could mean that means testing of the family home could come into effect if the government wants to reduce spending.

We’ll have to wait and see at this point, but it is important to remain informed about the age pension and entitlements and how they may change.


Tell us, do you think we have a welfare spending problem? How can the ageing population issue be addressed?


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  1. This makes my blood boil when I hear this about the age pension and what they can do to cut expenses. I’ll tell them what they can do. cut their own benefits and retire on the pension like the rest of us. Take away all the lerks and perks and watch them SCREAM blue murder. Do they really need the exorbitant wages and pensions? I am sure Turnbull does not need the extra income.

    13 REPLY
    • I totally agree with you. Work hard, pay taxes then when you retire get a kick in the face. If more people were employed there would be no problem. And pollies should only get what we get. …

    • the ex lib fat woman wanted to decrease the pension when she was the minister and said we don’t contribute. that was a lie we paid tax when we worked. rudd got elected and immediately raised the pension by $100. we are still below the poverty line, we need $150 extra

    • sick of it all? I think we all are and this will always be an issue while the Liberals are in Government.

    • Make the younger generation work insyead of having their hands out for a free ride or the politicians need to garnish there benifits.

    • You need to read the article, not the SAS clickbait headline. There is no suggestion of doing anything to the Age Pension. The usual hysterical comments.

    • We were all young once and paid our taxes, which of course helped to pay for pensions….now it’s our turn. Paid my taxes and extra into my superannuation, so hope the government leave well alone.

    • John Green You’re right. It’s a “suggestion” by the Productivity Commission (not the Government) and their record of “suggestions” is horrendous. Not worth getting your knickers in a twist at this stage.

    • They provide independent research and advice to the Government. When it becomes a Government policy I would suggest that that’s the time to really worry. It’s not actually a “Government Report” as such.

  2. the next generation that is left monies by their parents (which is from super) should put it into their super instead of spending it Therefor they will have a bigger super fund (nest egg) & that will reduce the need for government assistance when they retire
    We did not have the time to accumulate enough super to fully support By doing the above should mean less government pension for them

    1 REPLY
    • the next genaration will not have any left the way the gov going .my kids will not be getting much

  3. I am fast realising that the reason we are being bombarded with these “reports” is to brainwash into thinking we are expecting too much and shouldn’t claim the pension we have contributed to since our mid teens. We should not be assessed this way simply because successive governments of both persuasions have failed to meet their obligation of investing our contributions wisely to meet the demand. It is t like they didn’t know how many Baby a Boomers there were going to be of which the majority would require a pension.

  4. Who the hell is this Productivity Commission? Who are they funded by? They are following the UN’s Agenda 21. A mob of fascists.
    So all the taxes I have paid mean nothing? My life’s work is reduced to zilch? Whilst so many are rorting the system including the governments from Local to Federal.
    They are trying to make us feel guilty and brainwashing us that we don’t deserve much at all, because we are still alive. We have paid more than our due over our lifetimes, They can go to hell. Grrrrrr!

    1 REPLY
    • You can bet you life that the Productivity Commission is not made up of working class people. These ‘high flyers’ will not have gathered one handkerchief full of sweat in their entire working lives.

  5. I am sick of hearing that older people are a burden to this country.
    I will not apologise for working hard, paying taxes, huge mortgage rates, and, now, I feel that I have the right to retire, and enjoy life. Our generation, like those before us, have earned our pensions, since we have contributed so much to Australian life.
    If the government wants to adjust our pensions, a raise is needed.

    8 REPLY
    • I agree with you Maureen. I am from NZ and we have a pension scheme that we worked hard for and for many, continuing to work bloody hard beyond retirement age to add to the quality of life we have hear – the infra structures of our country etc. for all NZers; paying our taxes and as you say huge mortgage rates here as well. At the moment, I don’t hear mutterings about the old or threats to cut the pension. Some oldies struggle to make their pension meet their needs. We have 3rd generation kiwis on the dole inheriting their lifestyle from Mum, Dad and grandparents and for some, just being so lazy they won’t get off their backsides to find work. Some wander the streets daily with their cell/smart phones; they can afford booze, drugs and rock’n roll as they munch on fast food.

    • Has the present “Government” taking into acount the number of welfare recipients who will be voting in the next election? Pensioners worked hard all their lives, and paid their taxes, and now this mob want us all to curl up and die so that the parliamentarians can still get their fat lurks and perks and pensions

    • If the government stopped paying illegals etc., welfare there would be huge savings. If the government scrutinised their incredible entitlements, salaries etc., there would be more savings, if the government went through the ceo’s enormous bonus payments, (e.g. Australia Post – when it ran at a huge loss, but ceo got $5mil bonus – for what??) These people get huge salaries to do a job, so why should they be paid huge bonuses for doing a job that they already get paid for???

    • WHO invited the illegals here . Labor They are better off than pensioners, as UN says we must treat them well.. most are on welfare all their lives .

    • Would it work if people were paid the age pension according to the number of years for which they were a tax payer? This would need a bit of adjusting for stay-at-home mums.

  6. I agree that there should be some sort of means test. I had a friend who was a millionaire but took advantage of bulk billing and other perks. He even went to the charities who gave out free food packages. Dressed in old clothes he fooled the people there and got lots of free food.

    3 REPLY
  7. Those from either persuasion who are elected to run this country need to stop thinking of the here & now. It has been well known for decades that the baby boomer population was going to strain the welfare purse, did they offer us reduced taxes so we could provide better for ourselves?? ha ha Despite the various booms, mining, housing & whatever successive governments enjoyed during this time, where was the forward planning??? If the current government can’t find a more equitable solution, then perhaps they need to lead by example and show all that the ‘Age of Entitlement ‘ is truly over and provide from their own retirement coffers.

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