A $30 rise is not enough for the really poor pensioners with no income and is too much for those well off pensioners that Peter Costello stuck on the public t-t in his last couple of budgets. About 20% of all aged pensioners have no other income. The next 40% have less than $50 per week extra income, with maybe some savings.

However, many of the top 40% have lots of extra income, including super based on tax concessions. There are more than 3 million people on pension-linked payments, all of whom would benefit from a general pension rise and so it is likely to be spread thinly.

Government figures show the Coalition’s push to boost the single pension by $30 a week would add another 7500 well off people to the aged pensioner numbers by increasing the income test cut-out to $854 for a single pensioner up from the current $778 per week. As even $1 of pension entitles people to
more than $1300 in allowances, this illustrates the problem of raising general payments and undermines the argument that simplicity is the best solution.

Interestingly the Government wimps, using these figures very publicly in case they offend the better off recipients.

So it’s left to groups like Women’s Electoral Lobby to suggest better solutions: give aged pensioners living on their own in private rental accommodation an equity payment of $70 per week that won’t flow on to others.

Other groups needs targeted payments too but maybe the review needs to work out how to target their needs more effectively. This type of payment would ensure the $1.5 billion the opposition wants to spend goes to those who need it most and stops the Opposition’s Vegemite thin spread to even the relatively well off.

Best of all, this option would cost less than $200m!