Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Friday, 27 November 1936


Senator COLLINGS (Queensland) . - I direct attention to a pensions anomaly which I unsuccessfully endeavoured to have remedied, because it reveals a serious flaw in the act and inflicts considerable hardship on persons entitled to draw either an invalid or old-age pension. In reply to the representations which I made to the Pensions Department in this connexion, I received the following letter : -

The Invalid and Old-age Pensions Act provides that where husband and wife are pensioners and possess accumulated property the amount of each pension shall be reduced by £1 per annum for every complete £10 by which the value of - the property exceeds £25. Property is defined by the act as all real and personal property belonging to the pensioner.

Mr. and Mrs. Merrittare in receipt of pensions of £42 8s. per annum based on the value of their property as under: -

 

In accordance with the law, a deduction of £7, being £1 for every complete £10 in the amount of £75 shown above, is made from the maximum pension (£49 8s. per annum), leaving payable a pension of £42 8s. per annum.

In view of the law and the facts set out above, I regret to say that it is not possible to approve of an increase in the present rate of these pensions. There is no option but to treat the surrender value of the husband's life insurance policy as property within the meaning of the act.

Husband and wife are drawing the oldage pension. The surrender value of a life insurance policy is treated by thedepartment as an asset; but until they convert it,- I fail to see that it should be regarded as such. After working a lifetime to pay the instalments on the policy, they are now faced with having their thrift used against' them as a means of reducing their pensions, unless they are prepared to surrender the policy for its- cash equivalent, £170. Unless they spent the money their position would be no different. That £170, together with the £30 in the bank, makes a total of £200; and the fact that their possessions are of that value is regarded as justification for reducing the amount of the pension. Docs the Government agree that an insurance policy, which is often kept alive at great sacrifice to the insured in order to prevent him from being buried as a pauper, shall be treated as a cash asset, in consequence of which the amount of pension shall be reduced ? That was not the intention of the Parliament. I do not blame the officials of the department for what takes place. They have always treated me most courteously, but they cannot get away from the law.







Suggest corrections