Chapter 8 Outcome 4 - Seniors

Outcome 4 at a glance

An adequate standard of living and improved capacity to productively manage resources and life-transitions for senior Australians through the delivery of payments, concessions and information services.

Outcome and programs

Figure 8.1 shows the Outcome 4 program structure.

Figure 8.1 Outcome 4 programs

Figure-8.1

Highlights

Program 4.1: Income Support for Seniors

The objective of program 4.1 is to make payments to senior Australians to assist them financially in a manner that encourages them to productively manage resources and life transitions.

The program has the following components:

Age Pension

The objective of the Age Pension is to provide income support payments to senior Australians who need financial assistance and to encourage senior Australians to maximise their total retirement income.

The Age Pension is paid to people who meet age and residency requirements and the rate of payment a person receives depends on their level of income and assets. The Age Pension is funded from general taxation revenue; that is, entitlement is not based on a person’s individual contributions while in the workforce.

A pensioner can have up to a specified amount of income and assets to receive the maximum rate of Age Pension. If a person’s income and assets exceed those thresholds, the rate of Age Pension reduces on a sliding scale. For age pensioners who choose to work, the Work Bonus enables employment earnings to be treated concessionally under the pension income test.

Around 60 per cent of age pensioners receive the maximum rate of pension. In 2010–11, as a result of indexation in September 2010 and March 2011, total pension rates, which include base rate and pension supplement, increased by $28.20 a fortnight for single pensioners and $42.40 a fortnight for a pensioner couple combined. At 30 June 2011, total annual maximum pension rates are $18,961.80 for single pensioners and $28,584.40 for pensioner couples combined.

The Secure and Sustainable Pensions reform package was announced in the 2009–10 Budget. Except for the measure to increase the pension age from 2017, all the pension reforms have been successfully implemented. Most of the reforms were introduced from September 2009. Some 2.23 million age pensioners continue to benefit from the pension reform changes, including an initial increase in pension rates, improved indexation, better targeting and greater flexibility in some payment arrangements. Between September 2009 and March 2011, the pension reforms delivered increases to the maximum total pension of around $128 a fortnight for single pensioners and around $116 a fortnight for pensioner couples combined.

From July 2010, pension advance payments were improved by allowing multiple advances over a 12-month period, increasing the maximum and minimum advance amounts, and linking them to pension rates. The advance payment rules enable pensioners to meet large or unforeseen costs. At 30 June 2011, around 143,400 age pensioners had taken advantage of the new advance payment arrangements.

The Pension Supplement is paid automatically as part of a person’s fortnightly Age Pension. From 1 July 2010, pensioners can elect to receive part of their Pension Supplement quarterly. This option gives pensioners more flexibility in managing their budgets. At 30 June 2011, 7,518 age pensioners received their Pension Supplement quarterly rather than fortnightly.

During 2010­–11, the Department developed an enhanced Work Bonus, which commenced on 1 July 2011. Under the new and improved Work Bonus, eligible pensioners can earn up to $250 a fortnight without it being taken into account as income under the pension income test.

Widow B Pension

The objective of Widow B Pension is to make payments to widowed, divorced and separated women to assist them financially. This payment was closed to new entrants from 20 March 1997.

Wife Pension (Age)

The objective of Wife Pension (Age) is to make payments to female partners of Age Pension recipients, where those partners are not eligible in their own right for Age Pension, to assist them financially. This payment was closed to new entrants from 1 July 1995.

Summary of performance

Table 8.1 summarises the Department’s results for program 4.1 against the key performance indicators published in the
2010–11 PB Statements.

Table 8.1 Program 4.1—key performance indicators

Key performance indicator Result
Age Pension/Widow B Pension/Wife Pension (Age) Age Pension Widow B Wife Pension (Age)
Percentage and number of recipients on part rate due to the means test 40.3% 37.6% 21.7%
896,895 213 2,029
Number of recipients 2.23 million 566 9,333
Administered outlays $32.15 billion $6.99 million $134.35 million
Age Pension
Ratio of assessed income of pensioners to their total income $24.10 of assessed income to every $100 of total income in 2010–11
Percentage and number of senior Australians who receive payment 68.5% (2.23 million)
Percentage and number of recipients with employment income 3.5% (77,782)
Percentage and number of new entrants with employment income 10.7% (17,008)
Payment accuracy 98.02%
Agreements are in place with all service delivery agencies Agreements are in place with Centrelink and the Department of Veterans’ Affairs.
Strategies are in place to ensure that the requirements are fulfilled under agreements with providers The agreements specify regular reports and are supported by ongoing business discussions.
Wife Pension (Age)
Ratio of current number of Wife Pension (Age) recipients to the number of Wife Pension (Age) recipients at 1 July 1995 23.6%

Table 8.2 summarises the Department’s results for program 4.1 against the deliverable published in the 2010–11 PB Statements.

Table 8.2 Program 4.1—deliverable

Deliverable Result
Payments are made through Centrelink to eligible claimants under the provisions of social security law Payments were made as described

Program 4.2: Allowances, Concessions and Services for Seniors

The objective of program 4.2 is to make payments and provide services to senior Australians to assist with household expenses, enabling them to maintain their standard of living and increase their access to information and community resources.

The program has the following components:

Seniors Supplement

The objective of the Seniors Supplement component is to make payments to senior Australians to assist with the cost of general living expenses.

Seniors Supplement is paid to Commonwealth Seniors Health Card holders and eligible Department of Veterans’ Affairs Gold Card holders. The supplement incorporates the former Seniors Concession Allowance and Telephone Allowance for Commonwealth Seniors Health Card holders. It accrues on a daily basis and is paid quarterly in March, June, September and December.

Concession cards

Australian Government concession cards provide access to a range of concessions, including cheaper Pharmaceutical Benefits Scheme prescription items and a lower threshold for the extended Medicare Safety Net. Cardholders may be offered other concessions, including those offered by state, territory or local governments and authorities, and some private organisations.

Concession cards issued by the Australian Government include:

Table 8.3 shows the number of concession card holders by card type.

Table 8.3 Number of concession card holders, 30 June 2011
Card type Card holder numbers
Health Care Card 1,130,512
(Low Income) Health Care Card 435,745
Pensioner Concession Card 3,617,579
Commonwealth Seniors Health Card 282,186
Total 5,466,022

Broadband for Seniors

Broadband for Seniors is a network of internet kiosks in locations frequented by seniors to address barriers that limit seniors’ capacity to access the information and community resources needed to remain involved in social and community activities.

Broadband for Seniors offers senior Australians free broadband internet access and training at seniors internet kiosks across Australia. The initiative aims to build seniors’ confidence in using new technology.

In 2010–11, the Department completed the rollout of the Government’s commitment to establish 2,000 Broadband for Seniors kiosks across Australia. To celebrate this milestone, the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon. Jenny Macklin MP,  joined seniors at the Yarraville Senior Citizens Centre to help launch their new kiosk in February 2011.

Since the initiative was launched, around 160,000 seniors are estimated to have accessed a kiosk. Of these, around a third reported that they had never used a computer before, and almost half reported that they had never used the internet.

Summary of performance

Table 8.4 summarises the Department’s results for program 4.2 against the key performance indicators published in the
2010–11 PB Statements.

Table 8.4 Program 4.2—key performance indicators

Key performance indicator Result
Seniors Supplement
Number of recipients 278,247
Administered outlays $179.17 million
Broadband for Seniors
Percentage and number of seniors’ internet kiosk users reporting improved skills and confidence in using the internet

92.5%; 385 out of 416 users surveyed reported improved skills 
90.6%; 377 out of 416 users surveyed reported increased confidence in using new technology

Number of seniors using an internet kiosk 160,000a

aThe number of seniors using an internet kiosk is the number of seniors who have accessed a Broadband for Seniors kiosk since the initiative was launched in September 2009.

Table 8.5 summarises the Department’s results for program 4.2 against the deliverables published in the 2010–11 PB Statements.

Table 8.5 Program 4.2—deliverables

Deliverable Result
Seniors Supplement
Payments are made through Centrelink to eligible claimants under the provisions of social security law Payments were made as described
Broadband for Seniors
Number of seniors’ internet kiosks established 2,000

Outlook for Outcome 4

The Age Pension program is a key pillar of Australia’s retirement income system. In 2010–11, Age Pension outlays were $32 billion, or approximately 9 per cent of total Commonwealth expenditure. At 30 June 2011, there were around 2.23 million age pensioners, representing more than two-thirds of the Australian population over pension age. Expenditure on the Age Pension program has been growing due to policy changes and Australia’s ageing population. In 2011–12, it is estimated that Age Pension expenditure will rise to $34 billion.

In June 2011, Parliament passed legislation to enhance the Work Bonus. The new Work Bonus, which took effect on 1 July 2011, has two components:

In 2011–12, the Department will support the work of the Australian Government Advisory Panel on the Economic Potential of Senior Australians, established in March 2011. The panel has been asked to consider what new opportunities will arise in the future with a larger, and more active, community of senior Australians.

The Government will also continue to fund the network of Broadband for Seniors kiosks that provide free broadband internet to help seniors stay in touch with family and friends, and access the information and resources they need to remain involved in social and community activities.

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