More niggly savings at the expense of older Australians

Article published 26 September 2019

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THE Australian Government has re-introduced draft legislation (1) to make going overseas more expensive for pensioners, (2) to make people going on Newstart wait double the time, and (3) to make it harder to get the pension at all for migrants.

The proposed measures are harsh but not new. They’re left-over business from the previous parliament.

First, at the moment a pensioner can go overseas for longer than six weeks and lose some of their pension supplement but keep the basic amount of the pension supplement.

The basic amount is compensation introduced with the GST back in 2000. From 1 January 2020, the Government plans to stop paying pensioners going overseas for longer than six weeks the basic amount, reducing their fortnightly pension payment by $23.80 (singles) and $39.20 (couples).

The Government’s reasoning is that you don’t pay GST while overseas. Go figure.

Second, anyone applying for Newstart with savings in excess of $5,000 is expected to use those savings while waiting a maximum of 13 weeks for their first Newstart payment. The Government plans to double that, so that instead of one quarter, people will now have to wait half a year.

No justification has been provided. Obviously, living without money coming in for 13 weeks is hard enough but it’s even harder for 26 weeks.

Third, the Australian residency requirement for the Age Pension and Disability Support Pension (DSP) is for ten years, with five of those years continuous between the ages of 16 and 65.

The Government wants to change this to 10 years continuous Australian residency. Five of those years must be during a person’s working life. Alternatively, five years all up must have been while the person was not in receipt of an unemployment benefit.

The justification given is that everyone is expected to work. However, if this becomes law, there could be people who end up with nothing to live on except Special Benefit. The Special Benefit payment equals the Newstart payment, a lot less than the pension.

Together, these measures are estimated to improve the budget bottom line by $292 million over the forward estimates.

CPSA has written to the Opposition and the crossbenches in both Houses to protest the unfairness of these measures.


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