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Wednesday, 4 May 1994
Page: 276

(Question No. 1302)

Senator Patterson asked the Minister representing the Minister for Social Security, upon notice, on 30 March 1994:

  (1) Which Organisation for Economic Co-operation and Development countries currently have universal pension schemes.

  (2) What would be the estimated annual impact on outlays of providing a non-means tested age pension, at the current maximum rates for single and married pensions, to all Australians aged: (a) 90 years and over; (b) 85 years and over; (c) 80 years and over; (d) 75 years and over; (e) 70 years and over; and (f) 65 years and over.

Senator Crowley —The Minister for Social Security has provided the following answer to the honourable senator's question:

  (1) By international definitions, a universal pension system is a system which pays pensions to retirees without requiring them to make contributions during their working lives. Of the twenty-four Organisation for Economic Co-operation and Development (OECD) countries, all but Australia, New Zealand and Iceland rely primarily on contribution-based social insurance schemes for their retirement income systems. Eight OECD countries have a universal pension system in addition to or in place of a social insurance scheme.

  The eight countries are:

Australia; Canada; Denmark; Finland; Iceland; New Zealand; Norway; and Sweden.

  Of those countries with a universal pension system, Australia, Canada, New Zealand and Iceland have means-tested systems, with means-testing operating through the income security system itself or through special surcharges or other levies administered in the tax system. Denmark, Finland, Norway and Sweden have small non-means tested universal pensions in combination with income tested supplements for low income earners.

  (2) The following is the estimated annual cost of paying the age pension free of income and assets tests to otherwise qualified persons of age pension-age (as at June 1993):

  (a) 90 years and over: $105 million; (b) 85 years and over: $300 million; (c) 80 years and over: $660 million; (d) 75 years and over: $1,300 million; (e) 70 years and over: $2,370 million; and (f) 65 years and over: $4,070 million.

  These cost estimates are based on populations, pension numbers and rates as at June 1993 and are the estimated combined costs for Age and Service pensions in 1993 dollars. The estimates include the costs of increasing rates for all existing pensioners to maximum rate and the costs of maximum rate pensions for new pensioners.