In the Senate on Monday, the Minister for Immigration and Citizenship, Chris Evans, dismissed the idea that some pensioners are worse off under the relatively new income reporting rules for pensioners. The rules were introduced by the Rudd government last September.

When Senator Fierravanti-Wells suggested in the Senate that a pensioner who gets seasonal work as Santa Claus is among those worse off, Evans quipped: “… there is always a story about Santa Clauses being ripped off as a result of working every Christmas, whatever the year, whatever the current arrangements are… It is just a story I see run every year. I look forward to it every year.”

His remarks provoked the verbal equivalent of a savage bite on the bum from the Tooth Fairy. In a press release fired off yesterday by the Combined Pensioners and Superannuants Association of NSW, its policy director, Charmaine Crowe, snapped: “Senator Evans may look forward to these stories every year, but pensioners certainly don’t. In reality, the new fortnightly reporting rules dock pension payments of age pensioners who work on a casual basis, whereas before they may not have lost any pension at all.”

Crowe told Crikey yesterday that her organisation receives complaints all the time from members about the new rules. The NSW Council on the Ageing’s policy director Carolyn Hodge also reported many inquiries and complaints from pensioners.

Yet everyone agrees the new rules do benefit pensioners who are lucky enough to have regular part-time work. For example, a single pensioner is allowed to earn $250 a fortnight from employment (up to $6500 a year) without loss of any pension. A pensioner couple can earn up to a total of $500 a fortnight (up to $13,000 a year) without penalty. The proviso, apparently, is that this income must be received and reported each fortnight.

Different rules apply for those who receive a comparatively large lump sum payment for an occasional casual assignment.

For example, if a single pensioner earns $2000 for a fortnight’s casual work as Santa Claus (or as an HSC exam supervisor), under the new rules he or she would lose their next pension payment . “Fair enough,” you may say. But Crowe and Hodge stress that many pensioners are only able to get a couple of weeks’ work a year. They may only earn $2000 from employment during the entire course of a year. Yet under the new rules these casuals are penalised, whereas a single pensioner who earns $6500 a year in regular weekly amounts of $250 is not subject to any penalty.

Under the old system, a single pensioner was allowed to earn about $3000 a year without penalty, even if he/she received those earnings in a lump sum. Furthermore, if he or she earned more than that amount they were able to arrange for  the necessary deductions to be made from their pensions in small fortnightly installments spread over three months or “annualised” and deducted in small instalments over the course of  a year.

Crowe notes that during the 1980s pensioners won the right in the High Court to have their earnings “annualised”. That ruling has been superseded by the new Rudd rules. “This (new) policy does not sit well with the aim of giving most to those who have the least,” complains Crowe.  “It is in direct contrast to this tenet of the social security system.”

Hodge points out that it is generally the most financially challenged old folks who are desperately seeking casual work, those without superannuation or investments who are solely dependent on the pension. “We are talking about people taking on short-term work to pay for essential expenses, like dental treatment,” instanced Hodge.

Yet the government seems convinced that the new system is benefiting everyone.

Yesterday, Crikey contacted the office of  Jenny Macklin (the Minister for Families, Housing, Community Services and Indigenous Affairs) to suggest the new rule are confusing and discriminatory. It was suggested that while many people believe that, for example, all single pensioners are allowed to earn up to $6500 a year without penalty, the fact is they are only allowed to do so if they earn that money in fortnightly sums that do not exceed $250. A spokesman insisted, though, that departmental “modelling” has proved that all pensioners who earn extra income from employment are better off under the new system.

Even so, pensioners’ representatives still argue that this is not the case.

Crowe told Crikey yesterday that her organisation will continue to lobby for amendments. When castigating Senator Evans in her press release, she concluded by saying: “The Australian government should be exploring ways to solve this problem, rather than making a mockery of it. Allowing age pensioners to average their income from casual employment over three or 12 months would be a good start.”

Peter Fray

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Peter Fray
Editor-in-chief of Crikey