Transcript by The Hon Jenny Macklin MP

Pension increase, household assistance for pensioners, Disability Support Pension and new Impairment Tables

Program: 5AA Mornings

E & OE – Proof only

LEON BYNER: Now, pensions are up today, so that’s the good news, and there is going to be a few changes. Let’s talk to the Federal Families Minister, Jenny Macklin. It’s always good to talk to you Jenny.

JENNY MACKLIN: Thank you Leon, nice to talk to you too.

LEON BYNER: Now, first of all, this is the increase that people are going to get as of today, is an increase that we would normally get anyway, correct?

JENNY MACKLIN: Yes, although the reason it’s a little higher than people might have expected in the past is because we’ve put a new indexation system in place that better reflects the actual cost for pensioner households. So today’s increase of $19.50 a fortnight for single pensioners on the maximum rate is higher as a result of an improved indexation system that we’ve put in place.

LEON BYNR: Now my obvious question and you know that we talk about this often. Any pensioner listening who lives in a public house, that is a Housing SA house, is automatically going to be finding their rent increasing?

JENNY MACKLIN: Well there are two things. One as you know we have sought the agreement of the South Australian Government to quarantine or protect the original increase in the base rate of the pension back in 2009 – that was worth around $70 a fortnight. Unfortunately the South Australian Government, as you and I have discussed before, have decided to count that in their assessment of people’s rent. So that is happening I’m sorry to say, but it has always been the case that rents tie to the level of the pension and so yes it is the case that people will see changes to their rent.

LEON BYNER: Jenny as a rebuttal. Jennifer Rankin is on record of saying – Jenny if you want that money not to be touched by us, pay it differently. What is your response to that?

JENNY MACKLIN: Well we do pay it differently in the sense that we put an additional amount of money into the pension supplement, and in fact I’ve designed the assistance that we’re going to provide to pensioners for help with the carbon price in exactly that way. So if I can just take this opportunity to describe that to your listeners, what we’re going to do is pay an addition to pensioners when we introduce the carbon price in the middle of next year, and I am going to pay it as a clean energy supplement so as to protect it from those public housing rent rises that you and I are so annoyed about. So yes, I have taken that advice and I have designed the new clean energy supplement to protect it from any possible rent hike.

LEON BYNER: Yeah, well I’m glad you did that because I, as soon as, and this is away from the debate about whether we should have it or not, let’s assume that it happens as the Prime Minister wants and the money goes through…


LEON BYNER: My concern was always that what was intended to buffer people from cost of living increases…


LEON BYNER: Would actually be taken by the State Governments. So you’re saying because of the way you’re going to pay it, they won’t be able to do that?

JENNY MACKLIN: Well, as long as they once again stick to their agreement which is that they won’t touch the supplement and …

LEON BYNER: Do you have any reason to believe that they’ll stick to it?

JENNY MACKLIN: I do have reason to believe they’ll stick to it because of the comment that you’ve just made that up until now they haven’t counted the supplements in the assessment of rent, so I hope that will continue.

LEON BYNER: If they do, what will you do?

JENNY MACKLIN: Well we’ll certainly, I’ll be on your program quick smart that’s for sure Leon. Because I expect that people will not, that they recognise that this assistance that we are going to provide to pensioners next year and in an ongoing way to help pensioners out with the carbon price coming in. We do want to make sure that it goes to pensioners and that’s exactly why I’ve designed a clean energy supplement so as to make sure pensioners get the lot of it.

LEON BYNER: All right. Look, whilst I’ve got you there, there is some discussion at the moment about people who might be on a disability pension and they are concerned that they might be put back on Newstart, which is less; and secondly, that their capacity to work has not necessarily changed. Now, can you clarify that on one point, and on the other, I think the other thing people need to understand is that these new rules where there’ll be a different way of assessing people with disabilities will apply not retrospectively. In other words if you’ve got a disability, you’ll get a review and at that review it will or will not be decided …

JENNY MACKLIN: May or may not.

LEON BYNER: Yeah, that you have the capacity to work.

JENNY MACKLIN: That’s exactly right. So from 1 January next year we are introducing these new impairment tables, and as you’ve correctly said it will apply to new people, not to all the existing people who are on the disability support pension. But there may be circumstances where an individual is reassessed. So for example there’s been a change in your disability, maybe you’ve got a little bit better and you’ve gone back to work, there may be that situation where Centrelink will do a new assessment of you. They will use the new impairment tables in that circumstance. But it won’t apply to the large majority of people who’ve already been found to be eligible for the disability support pension.

LEON BYNER: Now while I’ve got you there and this might have to be a question on notice. But as you know, energy prices now are becoming very controversial, and this isn’t about the carbon tax, this is about the fact that we’ve got energy prices going up exponentially.


LEON BYNER: Even in New South Wales now, there’s discussion of the possible fifteen per cent increase in utility prices, and we’re not just talking electricity. You are going to be faced with a situation where the supplements and the benefits that you give people who are the battlers to try and help pay these bills, will end up being a much lesser proportion of their total income. Now that must worry you?

JENNY MACKLIN: It certainly was, and continues to be a concern. That’s why one of the first things we did in Government was to significantly increase the utilities allowance so as to give people extra help with their utility bills and of course that now is part of the pension supplement, and I’m pleased to say is protected from rent rises. So that’s a good thing.


JENNY MACKLIN: It is also the case that this new indexation formula that we have better reflects the actual costs of pensioners. So if pensioners are using more energy as a proportion of their income than other households, then they’ll get a little bit more in their pension rise every six months.

LEON BYNER: How will the system pick that up?

JENNY MACKLIN: Well because it’s a pensioner living cost index now, not just the CPI. Not just the Consumer Price Index.

LEON BYNER: All right. Jenny, thank you for joining us. That’s the Federal Families Minister clarifying a few issues for you on payments that changed today in the upward direction for those who are at the margins.