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Wednesday, 17 June 2009
Page: 6303

Mr GEORGANAS (1:32 PM) —I too am very pleased to rise to speak today on the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009. I am also very pleased that the minister who brought this piece of legislation to this House is here in the chamber. These are the most significant reforms to the pension since it was introduced 100 years ago. It is a very vital investment in preparing Australia for the future.

This bill implements key elements of the government’s secure and sustainable pension reform package that was announced at the 2009-10 budget. The bill prepares Australia to meet the future challenges of an ageing population. As the member for an electorate that has one of the oldest populations in the country, the electorate of Hindmarsh, I welcome these changes. I must say that they have been a long time coming.

The Rudd government reforms deliver a stronger and fairer pension system that will serve pensioners and Australia well into the future. Pensioners in my electorate of Hindmarsh can look forward to increases from 20 September 2009. In my electorate, that involves 19,693 age pensioners, 5,540 disability support pensioners and 750 people who receive the carer payment. This bill will ensure that single pensioners will receive the increased support that they deserve. Single pensioners in the electorate of Hindmarsh will receive increases of up to $32.49 a week as part of these reforms. We all know that pensioners thoroughly deserve this extra support. Even in the hardest of economic times the Rudd government has delivered on crucial reforms for pensioners.

These reforms will also improve the pension system by making it simpler and more sustainable into the future as the population ages. The reforms will provide long-term security and certainty and will also ensure that over time the pension system will remain both adequate and sustainable.

The bill introduces a new pension supplement to simplify the number of supplementary pension payments currently available. The existing GST supplement, the pharmaceutical allowance, the utilities allowance and the telephone allowance will be incorporated into the one pension supplement. Also, the new pension supplement for singles will increase by $2.49 a week to enable the supplement to match the 66.33 per cent single to couple pension ratio. For couples combined it will increase by $10.14 a week.

At 20 September 2009 it is estimated that the pension supplement will be worth up to $1,462.70 a year for singles, which is a weekly figure of $28.13. For couples it will be $2,199.60 a year or $42.30 per week. Also, from 20 September 2009 the pension supplement will be paid fortnightly with the pension and from July 2010 pensioners will be able to choose to take the minimum amount of the pension supplement in quarterly instalments.

The bill also introduces the new seniors supplement—a payment that replaces the seniors concessional allowance and telephone allowance currently available to holders of the Commonwealth seniors health card. The seniors supplement will be available as a quarterly payment and will be paid at the same rate as the minimum amount of the pension supplement. The seniors supplement for a single person will be 66.33 per cent of the seniors supplement for a couple combined.

A new work bonus will be introduced for age and service pensioners. Employment income will be assessed fortnightly for pensioners over age pension age, and 50 per cent of a pensioner’s employment income up to a maximum of $500 a fortnight will be disregarded in the income test. This is designed to replace the Pension Bonus Scheme and provide a mechanism for supporting pensioners over age pension age who choose to work to supplement their existing pension. For example, a single pensioner who works part-time with a fortnightly income of around $500 a fortnight will benefit from the work bonus under the new income test arrangements and only half of the income will be assessed under the pension income test. This means that the pension will be $125 per fortnight better off just as a result of the new work bonus, even after taking into account the tightening of pension income test rules.

Pension rates will continue to be adjusted in March and September each year in line with cost of living increases. The Australian Bureau of Statistics will develop a new index that will specifically reflect cost of living changes for pensioners and other income support recipients to be known as the pensioner and beneficiary living cost index. The bill will provide for pension rates to be adjusted each March and September by whichever is the greater of the CPI or the PBLCI—the pensioner and beneficiary living cost index.

The amendments also ensure that the base pension rate will continue to be benchmarked to community living standards as measured by wages using male total average weekly earnings. A new legislative benchmark will be set at 41.76 per cent of male total average weekly earnings for the combined couple rate of pension. The bill sets the rate for single pensioners at 66.33 per cent of the combined couple rate, which is equivalent to 27.7 per cent of male total average weekly earnings. This new measure will commence on 20 September 2009.

Like all of us on this side of the House, I am very proud to be part of a Rudd Labor government that has delivered on a long overdue increase in the pension. As I said earlier, these are the most significant reforms to the pension since it was introduced 100 years ago and are a vital investment in preparing Australia for the future. All 3.3 million age pensioners, disability pensioners, carers, wife pensioners and veteran income support recipients will benefit from the increases in their pension payments.

Being a member of an electorate with one of the highest numbers of people aged over 65 years in Australia—over 20 per cent of my constituents in Hindmarsh are aged over 65—I have been advocating long and hard for improvement to the income of pensioners in my electorate. My constituents have been telling me, not just in the last couple of years but for years—at street corner meetings, at seniors forums that we hold, at functions and at meetings in my office—that they needed an increase in their pension. They have not been telling me this just in the last 18 months since we have been in government; they were telling me this for the years that I was the member in opposition as well. We know that the former government in 11 long years did nothing to address the inequity for single pensioners. For 11 long years the former government allowed the pension rate to stay low and squandered the opportunity to support pensioners in an entirely different economic climate. Yet this Rudd Labor government in tough economic times has done it. I am proud to be part of that government, as all of us are on this side. The government has taken this tough decision and it has delivered for pensioners.