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Wednesday, 8 May 1985
Page: 1589

(Question No. 87)

Senator Macklin asked the Minister for Veterans' Affairs, upon notice, on 20 March 1985:

(1) Why is the over 70's Age Service Pension of $102.90 per fortnight not indexed to accommodate movements in the consumer price index, given that the pension rate for under-70 Service Pensioners is so-indexed, and why does it not attach any fringe benefits or even a pension card which ensures concessions on travelling expenses, etc.

(2) Does the Minister for Veterans' Affairs approve this discrimination between service pensioner groups.

(3) Does the Minister consider that over 70's Age Service Pensioners are immune from the effects of inflation and price rises.

(4) Will the Minister act before the 1985-86 budget to have the over 70's Age Service Pension rate indexed and/or raised so that this group's purchasing power is not further eroded below the present $39 per week (in 1978 terms); if not, why not.

Senator Gietzelt —The answer to the honourable senator's question is as follows:

(1) (a) Service pensioners aged 70 years and over are eligible to receive an indexed pension subject to the regular income test which applies to all pensioners. Under this test, pension is reduced when income is in excess of $30.00 a week for a single pensioner or $50.00 a week combined for a married couple. Pension ceases to be payable when income reaches $213.80 or $356.60 a week respectively.

(b) Pensioners over 70 years of age with levels of income (that might otherwise prevent them from receiving a service pension or result in a small pension under the regular income test) are subject to a special, more generous income test. The special income test, operative since 10 November 1983, applies only where application of the regular income test would result in an amount of pension payable that is less than $51.45 a week ($102.90 a fortnight) for single pensioners or $85.80 a week ($171.60 a fortnight) combined for married pensioners. This rate does not begin to reduce further until a 70 year old single pensioner's income exceeds $200.00 a week or $333.00 a week combined if married. Pension under this test does not cut out until income reaches $302.90 a week for a 70 year old single pensioner or $504.60 a week in the case of a married couple.

(c) A pensioner aged 70 years or over can qualify for the full range of pensioner fringe benefits, including travel concessions, subject to the same income limits as apply to pensioners under 70. A pensioner whose other income has resulted in reduction of pension to $51.45 a week does not qualify for fringe benefits because his/her income is in excess of the prescribed limits.

(d) To index the rate of pension at which the special income test applies would assist service pensioners who already enjoy an advantage over other pensioners and would necessitate Government expenditure which could otherwise be used to help more needy members of the community.

(2) The discrimination between service pensioner groups is, in this case, to the advantage of pensioners at or over 70 years of age with higher levels of income.

(3) No. Pensioners of or over 70 years of age already receive indexed pensions unless their other income is such as to have their pension assessed under the special income test.

(4) As indicated above, service pensions are already indexed. No further provision is warranted for those who already can take advantage of the special income test.