During the past 21 months, the federal government has left thousands of pensioners significantly worse off — while reaping millions of dollars in savings from pensions payments.
The matter, which has attracted little interest in the mainstream media, relates to rules for “seniors” who work, first introduced by the Rudd government in September 2009. They will be replaced tomorrow by a set of allegedly “new and improved work bonus” rules.
The Minister for Human Services and Social Inclusion, Tanya Plibersek, gives details of these new regulations in the latest issue of the government’s News for Seniors. But neither she, nor the editor of the publication, Centrelink chief Hank Jongen, have a word to say about why it has been necessary to amend the 2009 rules only 21 months after they were introduced.
A few weeks before the introduction of those 2009 rules, Crikey pointed out that although they would certainly benefit pensioners who had a regular part-time job, they would severely penalise seasonal workers.
The 2009 regulations enabled each pensioner, whether single or living in a partnership, to earn $6500 a year without loss of pension. They were touted as an incentive for older Australians to remain in the workforce. The catch was that the $6500 had to be earned in fortnightly instalments of no more than $250 — if a “senior” earned more than $250 in the course of a two-week period their pension would be docked at the rate of 50 cents in the dollar, for every dollar earned in excess of the $250 limit.
That meant, for example, if a single pensioner earned about $1400 in the course of a fortnight they would lose their entire pension for the corresponding period, even if that pensioner earned nothing else for the rest of the year.
It’s pertinent to point out that because of ongoing age discrimination in the Australian workplace, the vast majority of pensioners consider themselves lucky to get even an occasional casual job. An example: many work for a couple of weeks twice a year to help administer the first and second semester exams at our universities. On average, they earn about $1500 for a fortnight’s work. But during the past 21 months, as a result of the 2009 rules, a single pensioner who earned that amount for a fortnight’s work forfeited their pension for the corresponding period.
The situation has been even worse for pensioner couples. If even one of the partners earned a couple of thousand dollars during the course of a fortnight’s casual work, both would lose their pensions for the corresponding two weeks, even if neither of them earned another cent during the year.
And here your reporter must declare an interest: during the past 21 months, my old man and I have lost at least a couple of thousand dollars in pension payments because of the 2009 rules.
Meantime, there have been outraged calls for the reintroduction of the rules in force before Labor began to tinker with them. Those pre-2009 conditions came into force as a result of an historic 1985 High Court case. It was instigated by pensioner Amelia Irene Harris, who worked occasionally as a casual nursing aide. She took on the Department of Social Security and won the right for pensioners to earn a specified amount each year before their pensions were docked.
In 1985 that specified amount was about $1000 a year for a single pensioner and $890 for pensioner couples. During the last years of the Howard government the amount single pensioners were permitted to earn each year without penalty had increased to $3200. Pension couples were allowed to earn up to $6400 before their pensions were docked.
Just before last year’s election, Julia Gillard announced details of the amendments to the current rules, which take effect from tomorrow. These amended regulations will allow every “senior” to earn up to $6500 a year without penalty, although the proviso is they must first slowly accumulate Centrelink credits, capped at an annual $6500, at the rate of $250 a fortnight.
But that means, for example, by October of this year, when many pensioners will be hired to help supervise the 2011 second semester uni exams, they will have each built up a credit balance of about $2000. Consequently, they will not have their pensions docked — unless they have worked in the meantime and have, consequently, used up all or most of their accrued credit balance.
But it’s all so complicated. Surely even the amended rules are a disincentive? Surely, only the most desperate battlers will try to understand and comply with the bureaucracy involved?
It requires, for instance, pensioners who work to report to Centrelink every fortnight on a specific day. They are warned that failure to do so on the dot will result in their payments being cut off.
Even so, it seems that there are still more pensioners seeking work than there is work available. The policy director of the Combined Pensioners and Superannuants Association, Charmaine Crowe, explains that income from the odd casual job can enable a pensioner to pay car insurance or get a tooth or their fridge fixed. Increasingly, they also compete for odd jobs in order to meet escalating gas, electricity and water bills.
Yet many of these pensioners have been penalised over the past couple of years because of ill-conceived 2009 rules and the failure of comparatively well-paid Labor politicians to quickly heed pleas for the amendment of those rules. It’s a scandal, but opposition politicians have had little to say publicly about the matter, despite rumours of unprecedented complaints from their constituents.
Crikey has tried to ascertain how many pensioners had regular part-time jobs during the past three years and how many were employed for occasional seasonal work. That information would give investigators a good idea of how many pensioners were penalised as a result of the 2009 rules and exactly how much the government consequently saved in pension payments. But despite repeated requests to the office of the Community Services Minister, Jenny Macklin, that data has not, so far, been forthcoming.
Meanwhile, while the government and the opposition seem intent on trying to win votes by forcing social security recipients to jump through ever more hoops, at least one pensioner is reported to have began legal action against the Gillard government for the recovery of pension payments he lost as a result of the regulations introduced in 2009 and now superseded.