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Thursday, 21 September 1972
Page: 1120


Senator GREENWOOD (VictoriaAttorneyGeneral) - I move:

That the Bill be now read a second time.

This Bill seeks to give effect, so far as the Social Services Act is concerned, to the proposals announced by the Treasurer (Mr Snedden) in his Budget Speech. The main provisions are: The standard rate of pension for single people and widows with children is to be increased by $1.75 a week to $20.00 a week. This increase will apply to approximately 509,000 age pensioners, 112,000 invalid pensioners and 50,000 widow pensioners with children. The married rate of pension, which is also payable to widows without children, is to be increased by $1.25 a week to $17.25 a week. This increase will apply to an estimated 324,000 age pensioners, 27,000 invalid pensioners and 43,000 widow pensioners without children.

A new pension, replacing the wife's allowance and called the wife's pension, will be paid to the wives of all age and invalid pensioners who do not qualify for a pension in their own right. Thus husbands who now receive age or invalid pensions at the standard rate and their non-pensioner wives will both receive pensions at the proposed married rate of $17.25 a week. An estimated 31,500 wives will benefit from the introduction of this new pension, of whom 23,500 already receive a wife's allowance. Supplementary assistance is to be doubled, to a maximum of $4 a week and, subject to the usual eligibility conditions, will be available to married pensioner couples paying rent. About 108,000 age pensioners, 55,000 invalid pensioners and 23,500 widow pensioners will benefit from this increase. In addition, some 58,000 pensioners will become eligible for supplementary assistance for the first time.

The adult rate for long term sickness benefit is to be increased by $1.75 a week to $20 a week, and the junior rate will be increased by $1 a week to $13 a week. Approximately 7,500 beneficiaries will receive these increases. In line with the proposed increase in supplementary assistance for pensioners, the rate of supplementary allowance for long term sickness beneficiaries is to be doubled to a maximum of $4 a week. This increase will apply to an estimated 2,500 beneficiaries.

The pensions means test will be further liberalised by extending the amounts of means as assessed which permit the payment of full pensions to the same levels as the rates of pensions now proposed. The amount up to which a pensioner's income may be reduced for means test purposes for each dependent child is to be increased by $2 to $6 a week. A special concession is to be made for recipients of superannuation payments and annuities. These three measures will benefit 228,000 persons at present receiving age, invalid and widow's pensions at part rates, and will make an estimated 75,000 additional people eligible for a part pension.

Let me now turn to a more detailed description of the features of the Bill.

Rate of Basic Pension

The increases now proposed represent the fourth separate occasion on which the rates of pension have been raised by the McMahon Government in the past 18 months. In March 1971 the standard rate was $15.50 a week and the combined married rate was $27.50 a week. With the current increases these rates will have been increased by amounts totalling $4.50 and $7 a week respectively. In no other period in Australia's history have increases in pension rates been on a scale remotely approaching these amounts.

On previous occasions when introducing measures to increase pension rates I have pointed out to the Senate the extent to which the inceases have represented gains to pensioners in real purchasing power. It is interesting to note that, measured by the consumer price index, prices have risen by nearly 8 per cent since the March quarter 1971 while the pension, taking into account the current proposals, will have risen in the same period by 29 per cent for single people and over 25 per cent for married couples. Expressed another way, if pensions had been increased since March 1971 in accordance with rises in the consumer price index, current rates would be $16.74 a week for single people and $29.70 a week for married couples in lieu of $20 and $34.50 a week respectively as proposed in the Bill before the Senate. Whilst the position of pensioners has improved markedly over the past 23 years under the Liberal-Country Party Government, and never more so than during the past 18 months, special attention will continue to be given to detecting and eliminating areas of need.

In this context the Government is concerned that some couples who, between them, receive only one pension or pension plus wife's allowance, sometimes experience financial difficulties if they have no way of supplementing the payments made by the Department of Social Services. The Government's decision to extend eligiblity for pension at the married rate to the wives of pensioners who are ineligible for a pension in their own right exemplifies the concern shown for people who experience difficulties of the kind to which I have just referred. It will, of course, be necessary to make a consequential adjustment in the husband's pension in such cases from the standard to the married rate but the overall position of the couple will improve by up to $8.25 a week where the wife receives a wife's allowance and by up to $16.25 a week in other cases.

Another matter of concern to the Government is the increasingly high rents which are required to be met by pensioners who have little means apart from the pension. We have decided, therefore, further to assist these pensioners by increasing supplementary assistance by $2 a week. The new maximum will be $4 a week. In addition, married pensioner couples with little means and paying rent are to be eligible for supplementary assistance for the first time, payment to be made on the basis of up to $2 a week for each person.

The Pensions Means Test

On many occasions over the past 23 years the Liberal-Country Party Government has referred to its policy of raising the general standard of living of pensioners, directing special relief to the areas of greatest need and encouraging thrift, self help and self reliance. The various structural changes made in the field of the pensions means test since the Government came to office are only some of the ways in which practical and continuing effect has been given to that policy. As I have mentioned, this year we will ease the means test by further extending the means as assessed limits which permit the payment of full pension. In 2 related areas we will increase by $2 to $6 a week the maximum deduction allowed from a pensioner's income for each dependent child and, in addition, provide a special concession for recipients of superannuation payments and annuities.

The effect of the easing of the means test will be to extend the amounts of means as assessed which permit the payment of full pensions by $520 to $1,040 for standard rate pensioners, including widow pensioners with children, and by $910 to $1,794 for married couples. The allowable means as assessed for widow pensioners without children will also be raised by $520 to $1,040. Expressed in terms of income this will mean that an age or invalid pensioner without children whose property is less than $420 in value may have income of up to $20 a week and still receive the full standard rate pension of $20 a week; some pension will be payable until his income reaches $60 a week. A married couple without children whose property is less than $840 in value may have a combined income of up to $34.50 a week and still receive full pensions of $17.25 a week each; some pension will be paid until their combined weekly income reaches $103.50. Put the other way, where his means consists entirely of property an age or invalid pensioner without children may have assets to the value of $10,800 and receive a full pension; some pension will be payable until his property reaches $31,600 in value. For married couples without children the comparable figures are $18,740 and $54,640.

A widow with one child whose property does not exceed $4,500 may have income from other sources of up to $20 a week, or up to $26 a week if she receives no income for the child, and still receives the full pension. In the latter case, some pension will be payable until her income reaches $83.00 a week or $87.00 a week if the child is under 6 or an invalid child requiring full-time care. If income does not affect the pension she may have property to the value of $12,400 and still receive a full pension; pension ceases to be payable when the value of her property reaches $37,360 or $39,440 if she has a child under 6 or an invalid child. A widow without children whose property is less than $420 in value may have income of up to $20 a week and still receive the full pension of $17.25 a week; some pension will be payable until her income reaches $54.50 a week. Put the other way, where her means consist entirely of property a widow without children may have assets to the value of $10,800 and still receive a full pension; some pension will be payable until her property reaches $28,740 in value.

There are various combinations of income and property in between the figures I have cited which will permit the payment of a full or part pension. However, every single age or invalid pensioner without children whose pension under the present law is reduced because of the means test will, under this Bill, receive an increase of up to $6.75 a week if receiving pension at the standard rate or up to $5.60 a week, each, if a married pensioner couple without children. A widow pensioner with one child will receive an increase of up to $7.75 a week while widow pensioners without children will receive an increase of up to $6.25 a week. In quoting these amounts I have not taken into account the proposed new treatment of superannuation payments and annuities. I will return to this matter in a moment. Sheltered employment allowances and rehabilitation allowances, payable under the Social Services Act, are linked to the pension rates and recipients of these allowances will, as a result, benefit also from the means test liberalisations I have just outlined.

At this point I should say that the proposed extension of the means as assessed limits will not cause a corresponding extension of eligibility for fringe benefits such as the benefits of the pensioner medical service, funeral benefits and rebates on telephones, radio and televison. The eligibility limits for Commonwealth concessions are not increased when the means test is relaxed but are automatically raised in accordance with increases in the basic rale of pension. The effect of the proposed pension increases is that Commonwealth concessions will now be available to single pensioners with means as assessed between $30 a week and to pensioner couples with means as assessed below $51.50 a week. Turning now to the special concession to be applied for recipients of superannuation payments and annuities, where a pensioner is entitled to receive an income from superannuation or annuity, the annual rate payable will be given a property value for means test purposes by reference to a specific conversion factor contained in the schedule attached to the Bill. The conversion of the superannuation or annuity into property will be to the pensioner's advantage in the vast majority of cases but if in any particular case this should not prove to be so the payments will continue to be treated as income.

As the amount of property to be taken into account in respect of superannuation or annuity will vary with the pensioner's age, it is proposed to review each case on the anniversary of his birthday with a view to making a further increase in pension available. Mr Acting Deputy President, I seek leave to incorporate in Hansard a table showing the conversion factors to be applied for the capitalisation of superannuation payments and annuities.


Senator Willesee - Mr Acting Deputy President, in view of the new ruling which has been given, should not we be looking at this?







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