Pension reforms
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LEON BYNER: Jenny, first of all, when will these changes come into effect?
JENNY MACKLIN: From Sunday 20 September. I know people have been waiting some time for it and as you mentioned they would have now received a letter from Centrelink outlining what it will mean for each and every one of them.
LEON BYNER: Okay.
JENNY MACKLIN: If I can just say first of all Leon to your listeners, make sure you open the letter, none of this putting it on top of the fridge. And if of course there are any questions people have in the first instance, they could give Centrelink a call and just go through the explanation with their local Centrelink office.
LEON BYNER: All right. Now, broadly let’s tell people what they’re going to get and what they’re not going to get, okay?
JENNY MACKLIN: Sure.
LEON BYNER: First of all, singles. What do they get?
JENNY MACKLIN: This is for aged pensioners, disability support pensioners, those on the carer payment, wife and widow pensioners, and of course, our veterans’ income support recipients. So, if you’re a single pensioner with any one of those different types of pension, from the 20th of September, and this is if you’re on the maximum rate of the pension, you’ll receive an increase of $70.83 a fortnight. And that’s made up of the increase in the base pension that was announced in the Budget, an increase in the new pension supplement, and also indexation increases that have come about because we’ve got a new indexation formula.
LEON BYNER: All right, so that amount again per fortnight will be?
JENNY MACKLIN: Per fortnight for singles, if you’re on the maximum rate, $70.83, and of course it varies if you’re a part rate pensioner depending on your income.
LEON BYNER: All right, now. Let’s say this time you are not a single pensioner, but you’re a couple, what then?
JENNY MACKLIN: For couples combined, so for couple pensioners combined, once again if you’re on the maximum rate, you’ll receive an increase of $20.30 a fortnight in the new pension supplement and indexation increases of $9.20 and another 43 cents. So the total for couple pensioners combined is $29.93 a fortnight.
LEON BYNER: So each of them each get $29?
JENNY MACKLIN: No, couples combined.
LEON BYNER: Couples combined. Right. Now this has been one of the bones of contentions. The single pensioner in the categories you’ve mentioned, carer and so on, $70.83 per fortnight extra?
JENNY MACKLIN: Yes.
LEON BYNER: But for couples it’s very much smaller than that?
JENNY MACKLIN: Yes.
LEON BYNER: But for couples, it’s very much smaller than that.
JENNY MACKLIN: Yes.
LEON BYNER: The logic is?
JENNY MACKLIN: The logic is of course when people live together as a couple, they’re able to share a whole range of things. Share rent, share a whole range of their bills in a way that a single person can’t. And when we did the big pension review that you’ll remember, one of the recommendations of the pension review was that we needed to get the single pensioner rate to be two-thirds of the couple rate because singles really face much higher costs.
LEON BYNER: Now the utility allowance has also been a big subject because this is something that used to be paid every quarter.
JENNY MACKLIN: Yes.
LEON BYNER: All right. But now, it’s going to be valued out every fortnight.
JENNY MACKLIN: Yes.
LEON BYNER: Okay. Now what happens to that allowance, does it change from singles to couples?
JENNY MACKLIN: Well can I, just before I get to the singles and couples part, can I just say that the utilities allowance and the telephone allowance at the higher internet rate, they’re all paid as you say, on a quarterly basis. The GST supplement and the pharmaceutical allowance are currently paid fortnightly. What we’re doing is wrapping all of those allowances and supplements together and the full value of them, so no one’s losing out, the full value of all those allowances will go into the new pension supplement. And I emphasise this Leon because it has been an issue many people have raised I know with you on many occasions. So the full value of that will be wrapped together, and the maximum pension supplement will be $56.10 a fortnight for singles, and $84.60 a fortnight for couples combined. So once again, we’ve got that two-thirds ratio between singles and couples.
LEON BYNER: So let me clear this. There’s $70.83 for the single pensioner a fortnight?
JENNY MACKLIN: Yes, that includes the supplement.
LEON BYNER: Yes, okay. And the $56.10, is that extra to the $70.83?
JENNY MACKLIN: No, no. That’s the full value of the current utilities allowance, the telephone allowance at the higher rate, the GST supplement, and the pharmaceutical allowance brought to a fortnightly amount. And then of course the increase. The increase is $5 for singles, and the increase for couples is $20.30 a fortnight.
LEON BYNER: So for those people who think they’ve been diddled, your response is, no?
JENNY MACKLIN: No.
LEON BYNER: You mean $70.83 is included, all these things we’ve just talked about?
JENNY MACKLIN: No, in the $70.83, that’s the increase in the base pension, and the increase to the pension supplement. The $70.83 is the increase, it doesn’t include the full value of what they currently get.
LEON BYNER: Right, okay. So that’ll be paid separately?
JENNY MACKLIN: They’ll get it into their bank accounts on the same day, but Centrelink in their notice to each pensioner will separate it out so that people can see how much they’re getting in the base pension and how much they’re getting in the new pension supplement.
LEON BYNER: So if people who contact us, as they have, and they do the maths of what their, for example quarterly payments were for the utilities allowance, and they say I’m being diddled by $5 or $10 or whatever, you’re saying, no, it’s all been properly worked out?
JENNY MACKLIN: It has been properly worked out, so that the pension supplement they get is the fortnightly equivalent of the full value of all of those allowance plus a bit more because we’ve added to it. Can I just add one more thing?
LEON BYNER: Sure.
JENNY MACKLIN: I know there are a lot of changes happening. We’ve done this really to make sure that pensioners manage their money themselves. They’ve really said to us, we want to be able to decide whether we get it fortnightly or quarterly. So we’re paying it fortnightly now, but from the 1st July next year, pensioners will be able to take some of that pension supplement quarterly if they want to but that will be a choice they can make in the future.
LEON BYNER: But in the meantime?
JENNY MACKLIN: In the meantime, they’ll get it fortnightly.
LEON BYNER: Okay so that’ll be the next payment?
JENNY MACKLIN: Yes.
LEON BYNER: All right. And if people have got inquiries? Now what we’ve done today on the 5AA website is we’ve actually, because we get a lot of nuts and bolts questions, but if you go to 5AA website
(www.5aa.com.au) and find a link under Leon Byner, that will send you directly to, Jenny, your Department, and all that information will be explained?
JENNY MACKLIN: It is explained. There’s very good fact sheets that are up on the website that people can have a look at, and we’ve sent information out to pensioners as well, explaining these changes. Of course we do understand there are many, many changes so we understand all the questions but we’re trying to get the information out as clearly as we can.
LEON BYNER: Now, got a question.
JENNY MACKLIN: Sure.
LEON BYNER: When the John Howard was in Government, as a gesture each year, he would offer a payment of $500. Now you guys recently changed that and said no, we’re going to do better than that, we’ll legislate it so that it happens no matter what. Is that money also included in the numbers you’ve given today?
JENNY MACKLIN: We’ve changed the whole approach. So for carers, if I can just go to carers first of all.
LEON BYNER: Sure.
JENNY MACKLIN: You might recall that we introduced a special carer supplement that will now be paid every year so they don’t have to worry about the politics of whether it will or won’t be paid as unfortunately they did have to worry under Mr Howard. It was paid for the first time at the end of June, and from every year from now on it will be paid at the beginning of July.
LEON BYNER: That’s the $500?
JENNY MACKLIN: That was $600 actually for carers, so that’s a special carer’s supplement. But the other bonuses that have been paid randomly I have to say, by the previous Government, of course, are now wrapped up in the increases that we’re paying both to singles and to couples. So there won’t be those bonuses in the future but what couples can rely on and what singles can rely on is a fortnightly increase to their pension payments.
LEON BYNER: All right. So the CPI, the increases, are all wrapped up in the figures you’ve quoted this morning?
JENNY MACKLIN: Can I just go to that indexation point because that’s an important one. One of the commitments that we made before the election was to develop a new indexation measure, particularly for, we wanted to particularly do it to make sure that we measure how much the cost of living went up for pensioners. So we had the Bureau of Statistics develop this new index and it will apply to this pension payment on 20 September.
LEON BYNER: What does that mean?
JENNY MACKLIN: It means, it’s good news on this occasion because the pensioner index has delivered a higher level of indexation than they would have got if the consumer price index had applied.
LEON BYNER: All right. So how much will that work out?
JENNY MACKLIN: So for those who are dependent, who are single pensioners, the indexation increase for this last six months is equivalent to $5.50 a fortnight in the base pension.
LEON BYNER: All right. And that’s just for the cost of living?
JENNY MACKLIN: That’s correct.
LEON BYNER: All right. So none of these numbers except the indexation, you’re saying it’s not that people are going to get more, this is the $30 that was promised, plus all the other increases, the utilities allowances and so on?
JENNY MACKLIN: The reason I’m using fortnightly figures is people get paid fortnightly.
LEON BYNER: I understand.
JENNY MACKLIN: So if I just step through each of the parts to the $70.83. For the first, this is for singles, the first is the base pension increase that was announced in the Budget, the $30 a week, so that’s $60 a fortnight. The second was the increase in the new pension supplement, so the increase is worth $2.50 a week or $5.00 a fortnight. And then on top of that you’ve got the new indexation increase of $5.50 a fortnight in the base pension and I know it sounds a bit odd, but 33 cents a fortnight in the pension supplement. That adds up to $70.83 a fortnight.
LEON BYNER: All right.
JENNY MACKLN: They’re all the increases, not the current value of the utilities allowance.
LEON BYNER: People are getting confused between the changes on 20 September, Sunday, and October.
JENNY MACKLIN: What are people expecting to happen in October?
LEON BYNER: Well, there are some people who are expecting a change to their payment regiment, but that’s all going to happen on 20 September?
JENNY MACKLIN: It’s happening on 20 September. The other thing that happens on the 20th of September is that people are going to receive their final quarterly payment of the utilities allowance and their telephone allowance. So they’ll not only get these increases that we’ve just talked about, they’ll also get the final quarterly utilities allowance, and that may be what they’re thinking about.
LEON BYNER: I’m sure that is. So if you want more information go to 5AA website (www.5aa.com.au) , find the link under my name, Leon Byner, it’s B Y N E R, and all that information will be there. Jenny, I thank you for coming on today.
JENNY MACKLIN: My pleasure.
LEON BYNER: One question, I hope, one of the things that, apparently some of the Centrelink staff haven’t been as clear as you this morning, so I guess if people have got queries, you would suggest that they go to the website?
JENNY MACKLIN: Go to the website. And of course if you’re not online yourself, you can go down to the local library. I do find the Centrelink people very helpful so that is another option people have got. But if you’re able to get online yourself either at home or at the library, get onto to these fact sheets, they’re very clear and set out exactly what’s happening.
LEON BYNER: Jenny, thanks for joining us. Families Minister, Jenny Macklin.
ENDS