Growth in Age Pension receipt: the elephant in the room of the welfare reform debate

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The Minister for Social Services, Kevin Andrews, has recently expressed concern at the continued growth in the number of people in receipt of income support payments, and suggested that the welfare system is unsustainable. He has therefore commissioned Patrick McClure to undertake a review of the welfare system. Mr McClure’s previous review led to the Welfare to Work changes in 2006. However a closer investigation of the figures, released by the Department of Social Security, suggests that welfare receipt among those of working age is already declining, and hence the scope to make further large reductions may be limited. However Age Pension take up rates continue to increase.

How much does working until 70 save the budget bottom line?

Last week, the Productivity Commission released a research paper on the ‘economic issues raised by population ageing’, which included a recommendation to raise the age for eligibility for the Age Pension to 70. This proposal has been widely condemned by interest groups including the ACTU and National Seniors Australia, with one group claiming that implementing the policy would ‘see grandmothers and grandfathers joining the dole queue’. A Grattan Institute report released yesterday also includes this proposal as one of the ‘tough choices’ that may be required to balance the budget.

Disability Support Pension Customers: Statistical Summary

The Disability Support Pension (DSP) is a means tested payment for people with a disability. To be eligible for the DSP a person must be permanently blind or have a permanent physical, intellectual or psychiatric impairment. To qualify for the DSP, a person must be aged 16 years or over but have not reached pension age at the time of claiming (for more information on eligibility see the Centrelink website).

As at June 2010, there were 792 581 DSP customers, this is an increase of 35 463 (4.7 per cent change) from the previous year. As a proportion of the total Australian working age population, DSP customers (aged 15 to 64) made up 5.2 per cent. Of the 792 581, only 20 per cent (158 714) did not received the maximum rate of payment due to the income or assets test.

History of Australian pensions

 The long running Parliamentary Library publication Social Security Payments for the Aged, People with Disabilities and Carers 1901 to 2010 has been updated to include policy changes since 2006.