‘Definitely room’ to tighten aged pension

A COUPLE can enjoy a ‘comfortable retirement’, earn more than $58,000 a year and still claim a reasonable part pension.

A COUPLE can enjoy a “comfortable retirement” lifestyle, earn more than $58,000 a year and still claim a reasonable part pension to supplement their income while ­retaining access to a number of ­additional schemes to help cover energy and accommodation costs.

As the government confirmed a sunset clause on its plan to index the pension to inflation, an analysis by The Australian finds that a couple that qualifies for the full aged pension can still draw an annua­l income of $7300 and receive government benefits of more than $36,600, taking their overall position to $44,000 a year before payments begin to be reduced.

Once a couple’s annual income exceeds $7384, they are no longer eligible for the full pension, which provides $1171 a week or $30,446 per year.

According to the retirement standard benchmarks set by the Association of Superannuation Funds of Australia, a “comfortable” retirement lifestyle in the post-work years for a couple can be financed on a combined income of $58,326 a year.

But a part pension is still available to couples on combined incomes­ of up to $74,360, at which point payments taper down to zero, although there are still benefits available, including the Commonwealth Seniors Health Card.

A couple that qualifies for the full aged pension can supplement their annual payments of $30,446 to the tune of $6161 a year through a number of additional programs, provided they are still renting.

The three major schemes in question include the Pension ­Supplement, the Energy Supple­ment and a rent assistance scheme for those who do not own homes. ­According to Centre for Independent Studies economics research fellow Matthew Taylor, about 25 per cent of aged pensioners rent.

The Pension Supplement is a payment to help aged pensioners meet living costs, worth $63.50 for singles per fortnight ($1651 a year) and $95.80 for couples ($2490).

The Energy Supplement helps aged pensioners meet their power bills and is worth $14.10 a fortnight for singles ($366 a year) and $21.20 for couples ($551.20). This payment is also available to seniors at the same rates.

The Rent Assistance payments vary depending on relationship status, children and the cost of ­accommodation.

But an aged ­couple with no dependent children could access a maximum payment worth up to $120 a fortnight if the rent over the same period ­exceeded $344. This benefit would be worth $3120 a year.

Mr Taylor told The Australian there was “definitely room” for tightening up the income test for the aged pension.

“Part pension payments are made to some ­people who are pretty comfortable,” he said.