One-third of Australian pensioners live in poverty: OECD report
One-third of Australian pensioners live in poverty, according to a report by the OECD, Photo: Greg Newington
More than one-third of Australian pensioners are living below the poverty line, making the country among the worst performers in the world for the financial security of older people.
The findings of the OECD report, Pensions at a Glance 2015, compared Australia to 33 other countries.
Australia was ranked second lowest on social equity, with 36 per cent of pensioners living below the poverty line, which the report defined as half the relevant country’s median household income.
Australian pensioners fared better than their counterparts in South Korea, where 50 per cent live below the poverty line but performed poorly against the OECD average of 12.6 per cent.
The report, released last month, found the Australian government contributes less to old-age benefits than other OECD countries. The Australian government spends 3.5 per cent of GDP on the pension, below the OECD average of 7.9 per cent.
The findings are backed up by the Global Age Watch Index 2015 report card which rates countries by how well their older populations are faring.
It ranked Australia lowest in its region on income security, due to the high rate of old age poverty and pension coverage which is below the regional average.
Paul Versteege, senior research and advocacy adviser with the Combined Pensioner and Superannuants Association, said the base Australian pension rate was low compared to median household incomes.
“In Australia there is quite a large group that has to subsist on the age pension as its only source of income. In spite of pension reform and recent increases to the pension, the base pension is still quite low for singles.”
The annual payment for a single person is about $22,000 and $34,000 for a couple, with 2.25 million Australians claiming the pension.
Council on the Ageing chief executive Ian Yates said the report challenged perceptions that the entitlement was too high.
“Claims that the age pension is somehow too extravagant and unsustainable do not bear out,” he said.
“We have always argued for progressive improvements to the pension but at the moment an increase to the pension is highly unlikely and more focus ought to go towards building superannuation contributions.”
Chief executive of Vision Super Stephen Rowe said he was “staggered” by the findings of the OECD report, saying it painted a bleak picture for many older Australians.
“Are we generous enough with the pension? I don’t think so.”
He said that Australians retiring now have not received the full benefit of compulsory superannuation contributions, introduced in 1992, but were grappling with rising living costs.
“The basic cost of living in Australia is quite high, compared with some other OECD countries,” Mr Rowe said.
Chief executive of National Seniors Michael O’Neill said the pension had gone backwards in real terms and many older people had not accumulated enough superannuation to supplement the benefit.
“In terms of sustainability, the report confirms that Australia spends substantially less than the OECD average on pensions,” he said.
“In fact, our pension spend has dropped and plateaued since 2000. Against other countries, our proportion of pensioners living below the poverty line is startling.”
360 total views, 1 today