The history of the Australian pension system has been dominated
by the means test. A rather severe means test applied to the
pensions when initially introduced. Private income above a
threshold reduced pension on a pound-for-pound basis and assets
above a certain amount reduced pension by one pound for every ten
pounds of assets. From the beginning the family home was
concessionally treated and by 1912 it was completely exempt from
consideration under the means test.
The means test changed little between 1909 and 1946. During the
depression of the thirties attempts were made to reduce pension
expenditure by among other things reducing the rate of pension,
requiring relatives to contribute to the support of aged people and
attempting to recover pension paid from the estate of deceased
pensioners. Many of these measures proved to be administratively
unworkable partly due to the intense opposition they provoked and
were repealed by the late thirties.
After World War II pressure for the abolition of the means test
prompted a series of changes, many of which were intended to be
steps on the way to its eventual abolition. The means test was
criticised for excluding the thrifty from the pension and generally
discouraging saving. Both sides of politics endorsed abolition or
liberalisation of the means test well into the seventies. The most
significant changes along the road to abolition were:
The years 1946 to 1980 saw a steady growth in the proportion of
the aged population who received age pensions as the means test was
liberalised. Table 2 shows that around 32 per cent of the aged
population received an age pension up until World War II. Means
test changes over the following decades saw that proportion rise to
a high of 77 per cent in the late seventies. By the late eighties
it had dropped back to around 60 per cent due to a major policy
shift.
In 1978 the Fraser Government began the retreat from
universalism through abolition of the means test for the aged by
freezing the rate of pension paid free of the income test to those
aged 70 years or more. The income test was reintroduced for any
additional entitlement. The process of reinstating a full means
test was completed when the Hawke Government strengthened the
income testing of pensions for those aged 70 years and over in 1983
and introduced an assets test in 1985. The fiscal pressures on
government in the seventies and eighties reversed the trend to
universalism and replaced it with a new orthodoxy called targeting.
Means testing is essential in a targeted approach in order to
ensure that that those most in need receive the benefit of the
limited dollars available.
The Hawke and Keating Governments increased targeting through
reforms to such areas as the treatment of investment income, assets
testing and the handling of compensation payments. The objective
was equitable treatment of all pensioners with private income no
matter what the source. However between 1987 and 1993, the income
testing provisions relating to investments became more and more
complicated as the appearance of new investment products prompted
the introduction of corresponding new income testing provisions. A
review of the income and assets tests was commissioned and reported
in 1994. The resulting reforms simplified arrangements by deeming
income from investments based on the value of the investments
held.
Further changes were introduced to moderate the tendency for
means testing to produce poverty traps and disincentives to saving
and self-provision. The amount of income exempt from the income
test was increased substantially in 1987. It was further increased
and the taper rate was reduced as part of the compensation package
provided in 2000 when the Goods and Services Tax was
introduced.
Commencement Date
|
Details
|
Government at
Commencement
|
Original Enabling
Legislation
Invalid and
Old-Age Pensions Act 1908 (No. 17 of 1908)
|
1909
|
From April the Old-Age Pension (AP) was introduced. The pension
was subject to a means test as follows:
- The value of property, both real and personal, owned by a
pensioner could not exceed 310 pounds and applicants were not
permitted to deprive themselves of property in order to qualify for
the pension
- Where the value of the property of a single pensioner included
their residence and exceeded 100 pounds, pension was reduced by one
pound for every ten pounds of value in excess of 100 pounds. Where
the property did not include their residence or that residence
produced income, pension was reduced by one pound for every ten
pounds of value in excess of 50 pounds. The pensions of members of
couples were reduced in the same way but the amounts above which
pension was reduced were halved to 50 pounds and 25 pounds
respectively
- Income over 26 pounds per annum reduced the amount of pension
payable on a pound for pound basis. The rate of pension was
initially 26 pounds per annum, so a pensioner's total income could
not exceed 52 pounds per annum under these rules. Each member of a
pensioner couple was deemed to receive half of the couple's total
income and own half of the couple's total property
|
Fisher, ALP
|
1910
|
From November Invalid Pension (IP) was introduced and paid under
the same means test as AP.
|
Fisher, ALP
|
1912
|
From December the value of a pensioners home was excluded from
consideration when assessing the value of their property. The
higher level of exempt property was removed as a result of this
change.
|
Fisher, ALP
|
1917
|
From September:
- War pensions paid to dependants of deceased or incapacitated
soldiers was exempted from consideration as income under the means
test.
- Contributions to the maintenance of an invalid parent were
excluded from consideration when assessing eligibility.
|
Hughes, Nationalist
|
1921
|
From January married blind pensioners could receive sufficient
pension up to the maximum rate to bring the joint income of their
family up to four pounds five shillings per week.
|
Hughes, Nationalist
|
1928
|
From September war pension for incapacitated soldiers became
exempt income under the means test.
|
Bruce-Page, Nationalist-CP
|
1931
|
From July war pensions were once again counted as income under
the means test as part of the financial emergency measures taken
during the Depression.
From November pensioners with deposits in the Savings Bank of
New South Wales could assign them to the government and have them
excluded from their property value under the means test.
|
Scullin, ALP
|
1932
|
From October further emergency measures were introduced:
- Eligibility for pension ceased where relatives could adequately
maintain the pensioner. Relatives could be required to make
compulsory contributions to pensioner's maintenance.
- Transfers of property worth more than 100 pounds made for no
consideration in the five years before claiming pension could
prevent pension eligibility.
- Pension payed to a pensioner could be recovered from the
pensioner's estate after they died.
- The rate of pension payable before the income test was applied
was reduced to 15 shillings per week.
These emergency measures were not fully implemented and those
concerning property were repealed in April 1935.
|
Lyons, UAP
|
1933
|
From October sustenance and food relief provided by a State
Government were excluded as income under the means test.
|
Lyons, UAP
|
1934
|
From June relatives could no longer be required to contribute to
a pensioner's maintenance.
|
Lyons, UAP
|
1941
|
From December:
- The property exemption for a married pensioner was raised to be
the same as that for a single pensioner.
- The special provisions for blind pensioners under the means
test introduced in 1921 were repealed.
|
Curtin, ALP
|
1942
|
From July:
- Pensioners could no longer assign deposits in the Savings Bank
of New South Wales to the government and have them excluded from
consideration under the means test.
- Voluntary support from relatives other than parents no longer
excluded people from pension eligibility.
- Permissible income for a blind pensioner was set at the level
of the basic wage.
|
Curtin, ALP
|
1944
|
Permissible income for blind pensioners was set at five pounds
and the link with the basic wage removed.
|
Curtin, ALP
|
1946
|
From August the following items were exempt when assessing the
value of property under the means test:
- the value of furniture and personal effects
- the surrender value of any life insurance policy up to 200
pounds
- the capital value of any life interest or annuity
- the value of a contingent interest
- the present value of a reversionary interest up to 500 pounds,
and
- the value of property not yet received from a deceased
estate.
Permissible income under the means test was increased to one
pound per week.
The upper limit on property was raised to 650 pounds.
The pension rate was reduced by two pounds for every complete
ten pounds of property above 400 pounds.
Claimants for IP who were adequately maintained by their parents
and were aged 21 years or more were made eligible for IP.
|
Chifley, ALP
|
1947
|
From July an income disregard in respect of children of ten
shillings per week was introduced. Receipt of child endowment and
child allowance reduced this disregard by the full amount
received.
|
Chifley, ALP
|
1948
|
From October the amount of AP payable was reduced where the
total amount of war, service and AP exceeded three pounds two
shillings and sixpence for a single person or six pounds two
shillings for a pensioner couple.
|
Chifley, ALP
|
1951
|
From October the income disregard in respect of children was
reduced to five shillings per week and it was no longer reduced by
the value of any child endowment and child allowance received.
|
Menzies, LIB-CP
|
1953
|
From October:
- The permissible income for a single pensioner was raised to two
pounds per week. It was raised to two pounds ten shillings for
Wife's Allowance and married pensioners whose wife was not a
pensioner.
- The pension was now reduced by one pound for every complete ten
pounds of property between 150 pounds and 450 pounds and by two
pounds for every complete eleven pounds between 450 pounds and 1250
pounds.
|
Menzies, LIB-CP
|
1954
|
From October:
- The means test for permanently blind people was removed.
- Income from property became exempt under the means test.
- The pension was now reduced by one pound for every complete ten
pounds between 200 pounds and 1750 pounds.
|
Menzies, LIB-CP
|
1955
|
From October the limit on the total amount of age pension and
war pension was removed and war pension only counted as income
under the means test.
|
Menzies, LIB-CP
|
1961
|
From March a merged means test was introduced. It superseded the
separate tests on income and property. One pound for every ten
pounds of property above 200 pounds was added to the annual income
of pensioners to produce an amount of 'means as assessed'. Where
means as assessed exceeded 182 pounds per annum the annual rate of
pension was reduced by the excess.
|
Menzies, LIB-CP
|
1967
|
From June Sheltered Employment Allowance (SEA) was introduced.
People engaged in sheltered employment were eligible. SEA was paid
at the same rate as IP but the means test was structured to allow
for earnings. Earnings above $10 per week for a single person or
$17 per week for a married person reduced SEA by one dollar for
every two dollars earned.
|
Holt, LIB-CP
|
1969
|
From September:
- The means test was adjusted so that only half of the amount of
means as assessed was deducted from the annual rate of pension. The
means test became known as the 'tapered means test'. The unadjusted
means test was retained for determining eligibility for funeral
benefit, the pensioner Medical Service and fringe benefits.
- SEA became subject to the pension means test.
|
Gorton, LIB-CP
|
1972
|
From September pensioners receiving superannuation pensions or
annuities received concessional treatment under the means test.
Their superannuation could be treated as a property value
determined by conversion factors which related to their age. This
was only done where it was to the pensioner's advantage.
|
McMahon, LIB-CP
|
1973
|
From September the means test was abolished for those aged 75
years or more.
|
Whitlam, ALP
|
1975
|
From May the means test was abolished for those aged 70 to 74
years.
|
Whitlam, ALP
|
1976
|
From November the means test was replaced by an income only
test. Assets were no longer taken into account but any income
derived from those assets was included under the income test.
Concessional treatment of superannuation pensions was discontinued.
Where a pensioner deprived themselves of property or income in
order to receive a pension they were no longer refused a pension.
Instead the disposed of income could be deemed to be income
received by the pensioner.
|
Fraser, LIB-NCP
|
1978
|
From October the rate of pension paid free of the income test to
those aged 70 years or more was frozen at $51.45 for a single
pensioner and $42.90 for a married pensioner. Higher rates of
payment could be received if they qualified under the income test.
Blind pensioners were not affected by this change.
|
Fraser, LIB-NCP
|
1983
|
From November:
- The income test free component of the pension for those aged 70
years or older was subject to a special income test. Where income
exceeded $200 per week for a single pensioner or $333 per week for
a couple the previously income test free component was reduced by
fifty cents for each dollar of income above those levels.
- The exemption under the income test for income from Friendly
societies or trade unions was removed.
|
Hawke, ALP
|
1985
|
From March an assets test was introduced which applied to all
income-tested pensions. The assets or income test was applied, but
not both. The test giving the lower pension level was applied. The
following assets were not considered under the test:
- the pensioners home
- special aids for disabled people
- pre-paid funeral expenses
- an inheritance not able to be received
- awards for valour not held as investments, and
- the capital value of a life interest, most annuities,
contingent or reversionary interests not created by the person or
gift cars provided by DVA.
The value of the assets if sold at the time of assessment, less
any debt, was used. Disposal of assets without adequate return was
allowed to the value of $2000 per annum for a single pensioner or
$4000 for a couple. Disposal above these values resulted in the
excess being assessable. The value of disposed assets being
assessed was reduced by 10 per cent each year.
Hardship provisions applied where a person was considered to be
in severe hardship as a result of the assets test. Under these
provisions assets could be disregarded where they produced little
or no income, could not be sold or could not be expected to be sold
or used as security for a loan.
A pensioner loan scheme was introduced for people entitled to
little or no pension due to the assets test, who did not want to
sell or rearrange their assets. Provided that at least 70 per cent
of their assets could not readily be converted to cash, and there
was adequate security for the loan, the person could receive the
pension payable if only the income test applied. The excess over
the entitlement under the assets test became a debt with interest
of 10 per cent per annum.
The first $120 000 of a single pensioner's assets and the first
$150 000 of a pensioner couple's assets were exempt from
consideration under the test. For those who owned their own home
only $70 000 of assets for single pensioners and $100 000 of assets
for a pensioner couple were exempt. These exemption levels were
subject to annual indexation in line with the CPI. Pension was
reduced by $2.00 per week for every $1000 of assets in excess of
the exemption levels.
|
Hawke, ALP
|
1986
|
From November the rate of DSS pension payable to a recipient of
a war widow's pension was frozen. New grants were paid at the rate
of $60.05 per week subject to the income and assets tests.
|
Hawke, ALP
|
1987
|
From May:
- The timing of automatic indexation of assets test exemption
levels was deferred by six weeks to 12 June of each year from 1 May
of each year.
- For new claimants for IP, Rehabilitation Allowance (ReA) and
SEA, amounts equal to the pension or allowance they received were
recoverable from any compensation for an incapacity to work which
they received.
From July the separate income test for rent assistance was
abolished.
From November:
- Earnings credits were introduced for all pensioners except
Carer Pension (CP). Pensioners could save up unused portions of the
income test free area to a limit of $1000. When income exceeded the
free area the credit was reduced until totally depleted. The normal
income test then applied again.
- Restitution payments made by the West German Government were
not regarded as income under the income test.
From December separate rules for the treatment of investment
income under the income test were introduced. The growth component
of market linked investments made before or after 13 December 1987
was treated as income averaged over the 12 months after withdrawal.
Income from accruing return investments (which produced a known
rate of return) was deemed to be received throughout the period of
the investment. Savings provisions applied to investments of this
type entered into before 1 January.
|
Hawke, ALP
|
1988
|
From February 50 per cent of a lump sum settlement of a
compensation claim for personal injury was deemed to be for
economic loss and was recoverable where pension had been paid
during the period of that economic loss.
From November:
- Money received from a home equity conversion loan was exempt
from consideration under the income test until it reached the
amount of $40 000.
- The value free or subsidised board and lodgings was disregarded
under the income test.
From December an 11 per cent annual rate of return was imputed
to all market linked investments entered into after 9 September
1988. A lower rate could be used where evidence suggested that the
product was yielding a lower return.
|
Hawke, ALP
|
1990
|
From January:
- Insurers and/or employers (including State and Territory
instrumentalities) were made liable to DSS for money owed to DSS
from lump sum compensation payments even where they had released to
money prior to the service of a notice of charge.
- Compensation recovery debts could be recovered by withholdings
from pension payments.
From February income from compulsorily preserved superannuation
benefits was disregarded under the income and assets tests.
From April that part of an annuity or funded superannuation
payment made up of return of capital was excluded from
consideration under the income test.
From August a minimum interest rate (initially 10 per cent) was
deemed on new loans made by pensioners.
From November a person who had a work related accident or
illness was required to make a compensation claim to be eligible
for any DSS payment.
|
Hawke, ALP
|
1991
|
From March:
- The amount a pensioner could give away without triggering the
deprivation provisions was increased to $10 000 per annum. The full
amount of deprived assets was deemed to earn 10 per cent for five
years under the income test.
- A minimum interest rate was deemed on cash and deposits in
financial institutions. The first $2000 was exempt from this
provision. For amounts above $2000, 10 per cent interest or the
actual return if higher was assessed as income under the income
test. The Minister for Social Security had the power to vary the
deeming rate from time to time.
From July the income test free areas were indexed annually.
|
Hawke, ALP
|
1993
|
From March:
- Assessment of income from managed investments was simplified.
The categorisation into market linked investments and accruing
return investments was removed. All managed investments were
assessed on their actual rate of return over the previous twelve
months.
- Losses assessed on managed investments could be offset against
gains during the same period on other managed investments.
From July an earnings credit was introduced for CP
recipients.
From September:
- The managed investment rules were extended to shares and other
securities listed on the stock exchange and acquired after 18
August 1992.
- The Assets test was modified so that assets above the asset
test thresholds reduced pension by $1.50 per week for every
$1000.
From November non-cash credits from exchange trading systems
were exempt from consideration under the income test.
|
Keating, ALP
|
1994
|
From March pensioners were required to take action to claim any
comparable foreign payments (CPF) they may be entitled to. This
provision applied to those with an entitlement in a country that
Australia had a social security agreement with.
|
Keating, ALP
|
1996
|
From January certain saved investments could be cashed in
without the capital growth being assessed under the income test as
a transition measure before the introduction of 'Extended
Deeming'.
|
Keating, ALP
|
|
From July a major reform of the income test treatment of
financial assets was introduced. A system called 'Extended Deeming'
was introduced. When assessing income under the income test, the
total value of all financial assets was added together. A rate of
return of five per cent was deemed to have been received on the
first $30 000 ($50 000 for a couple) worth of assets and a
rate of seven per cent was deemed for asset holdings above these
levels. The first $2000 ($4000 for a couple) was exempt from
extended deeming. These rates were set at levels considered to be
easily achievable using safe investments. The Minister for Social
Security could vary the deeming rates as market rates changed.
Financial assets included:
- bank, building society and credit union accounts
- cash
- term deposits
- cheque accounts
- friendly society bonds
- managed investments
- investments in superannuation funds, approved deposit funds and
deferred annuities after age pension age
- listed shares and securities
- loans, debentures and bonds
- shares in unlisted public companies
- gifted assets above the allowable limits, and
- gold and other bullion.
Financial assets did not include:
- Homes, contents or other real estate
- cars, boats or caravans
- antiques or stamp and coin collections
- investments in superannuation funds, approved deposit funds and
deferred annuities before age pension age
- standard life insurance policies, and
- income streams such as superannuation pensions allocated
pensions, immediate annuities or allocated annuities.
|
Howard, LIB-NPA
|
1997
|
From March:
- The earnings credit scheme was abolished.
- People becoming AP recipients after 20 March 1997 and receiving
compensation on or after 20 March 1997 had the economic loss
component considered in assessing their eligibility. Previously AP
eligibility was not affected by compensation.
- The calculation of preclusion periods due to the receipt of
compensation after 20 March 1997 was altered. The compensation
amount was divided by the amount above which no pension was payable
to a single person under the income test. Previously the
compensation amount had been divided by 'all persons average weekly
earnings'.
- For compensation received after 20 March 1997, the compensation
preclusion period was applied only to the recipient and not to his
or her spouse as had previously been the case.
- The exemption under the 'extended deeming' provisions for the
first $2000 ($4000 for a couple) held by a pensioner was
removed.
From September:
- Superannuation assets were assessed under the income and assets
tests where a person had been in receipt of pension for 39 weeks
after reaching the age of 55 years.
- Farmers of age pension age were able to transfer farms and
farming assets up to the value of $500 000 to the next generation
without the transfer affecting their pension entitlement. The
farmer needed to have a long term involvement in farming and be on
a low income to qualify. This provision was to be effective only
until 14 September 2000.
|
Howard, LIB-NPA
|
1998
|
The 1998-99 Budget included a proposal to modify the income test
treatment of non-economic loss compensation payments. Lump sums in
excess of $10 000 were to be treated as ordinary income over
26 fortnights. Periodic payments of more than $2000 in any 28 day
period were to be treated as ordinary income. The measure was
originally intended for implementation from July 1999, but
implementation was delayed until January 2004.
From July a pension bonus scheme for people deferring retirement
and continuing to work for at least 20 hours per week was
introduced. A tax free bonus payment equal to 9.4 per cent of the
basic pension entitlement for each year of deferral up to a maximum
of five years was to be paid when the pension was received.
From September the treatment of income streams such as
superannuation pensions, allocated pensions and annuities, and
roll-over and ordinary annuities was reformed. Three categories
were introduced:
- Income streams for life, life expectancy or at least 15 years
with no access to capital and purchased after age pension age were
exempt from the assets test. Under the income test a deduction
based on the purchase price was applied.
- Other income streams with a term greater than five years but
less than lifetime or life expectancy if the person was over
pension age were asset tested. Under the income test a deduction
based on the purchase price was applied.
- Short-term income streams of five years or less were asset
tested. Under the income test they were treated as other financial
investments.
|
Howard, LIB-NPA
|
2000
|
From July:
- The income and assets tests were adjusted as part of a package
of measures to compensate for the impact of the introduction of the
GST.
- The taper rate under the income test was reduced from 50 cents
in every dollar of private income to 40 cents in every dollar.
- The income and assets test free areas were increased by 2.5 per
cent above the normal indexation rise.
From September the expiry date for the Retirement Assistance for
Farmers Scheme was extended until 30 June 2001.
The requirement to take action to claim a comparable foreign
payment was extended to people with entitlements in any country,
rather than only those countries with which Australia had a social
security agreement.
|
Howard, LIB-NPA
|
2001
|
From April overpayments caused by administrative error gave rise
to recoverable debts.
From July the superannuation assets of people aged between 55
years and age pension age were exempt from the income and assets
tests.
From September partners of compensation recipients were no
longer subject to dollar for dollar reduction of their payment.
Instead once the compensation recipient's payment was reduced to
nil by dollar for dollar deductions the excess was treated as
income under the income test for their partner.
|
Howard, LIB-NPA
|
2002
|
From January the income and assets of certain private companies
and trusts were included in a persons income and assets for the
purposes of the income and assets tests.
From July no more than $30 000 could be given away by a
pensioner or a pensioner couple in any five year period before the
deprivation provisions were triggered. The annual $10 000
limit remained in place.
|
Howard, LIB-NPA
|
2003
|
From December compensation payments for victims of Nazi
persecution paid by any country were exempt from the income test.
Only payments from Germany and Austria had previously been
exempt.
|
Howard, LIB-NPA
|
2004 |
From July intergenerational transfers of
sugarcane farms and farm assets (valued at up to $500,000) by
people of pension age were exempt from the gifting rules for a 3
year period. Recipients of the gifted assets had to be actively
involved in the farm.
From September a 50% assets test
exemption for market linked income streams was introduced. The
existing 100% exemption for certain non-commutable income streams
was reduced to 50% for those purchased after 20 September 2004.
|
Howard,
LIB-NPA |
2005 |
From July aged care accommodation
bonds were no longer assessed as assets under the assets test. |
Howard,
LIB-NPA |
2006 |
From September special disability trusts
could be established by parents or immediate family members to
provide for the care and accommodation needs of the beneficiary.
Amounts of up to $500,000 could be held in the trust (amount to be
indexed annually). The amount in the trust would not be assessed
under the assets test and income of the trust would not be assessed
under the income test. Contributions to the trust could be made by
pensioners without the asset disposal rules applying.
|
Howard,
LIB-NPA |
2008 |
From January the threshold for funeral
investments that were exempt from the means test was increased from
$5000 to $10,000. The threshold was also indexed to movements in
the CPI.
|
Rudd, ALP |
2009 |
From September the income test taper rate
was increased from 40 per cent to 50 per cent of each dollar of
private income above the income test free area.
Transitional arrangements were put in place to ensure that no
pensioners suffered a reduction in pension rate due to the change
in the taper rate.
A work bonus was introduced for pensioners of age pension age.
Half of the first $500 earned in each fortnight was disregarded
under the income test.
The Pension Bonus Scheme was closed to
new applicants.
|
Rudd, ALP |
Notes: (a) a pension
supplement was also paid from this date.
(a) Amount of income allowed before pension was reduced.
(b) No pension was payable where property exceeded this
value.
(c) Amount of property allowed before pension was reduced.
(d) Amount of income disregarded for each child.
(e) $50 for each married pensioner. Higher rates until 1912 for
those not owning a home. From 1912 pensioners home was fully
exempt.
(f) From 1941 property exemption was the same for both single and
married pensioners.
(g) Merged means test introduced.
(h) Income only test introduced.
(i) Assets test introduced.
From quite early in the history of pension provision by the
Commonwealth consideration was given to additional allowances and
entitlements. As early as the 1920s payments to assist with the
cost of funerals were discussed with the aim of relieving
pensioners from the need to save for that last big expense. Funeral
Benefit was eventually introduced in 1943 as part of a broader move
towards a comprehensive welfare scheme. Its existence as a separate
payment was ended in 1990 but provision for assistance with the
costs of funerals is still provided through bereavement payments to
surviving spouses or to the deceased's estate.
Concessions for pensioners developed gradually. The earliest
example was the provision of free radio licences to blind people in
1933. The Pensioner Medical Service created in 1951 provided for
the first time free medical services and medicines to pensioners.
Since then a range of other concessions have been added by both the
Commonwealth and the State governments. Eligibility for the
Commonwealth concessions came to be used by the States as a
convenient eligibility test for their own concessions. As the range
of concessions and the eligibility conditions expanded, the value
of these concessions increased considerably as did their cost. In
1993 cost sharing arrangements were developed to allow the states
to expand eligibility for their concessions to match eligibility
extensions for Commonwealth concessions.
Assistance directly linked to rent payments was introduced in
1958 as a means of assisting the poorest pensioners who were
entirely dependent on their pensions. It was called Supplementary
Assistance at first but was renamed Rent Assistance in 1985. Over
time it has been extended to all pensioners who rent in recognition
of the extra costs they face compared to home owners.
Concessions for low-income self-funded retirees were introduced
in 1994. Since then they have been extended to middle income
retirees as well.
Commencement Date
|
Details
|
Government at
Commencement
|
1933
|
Free radio licences were introduced for blind people.
|
Lyons, UAP
|
1946
|
Concessional rate radio licences were provided to age and
invalid pensioners. These were later extended to widow pensioners
and also to television licences. Eligibility was based on that for
telephone rental concession as described below.
|
Curtin, ALP
|
1951
|
From February a Pensioner Medical Service scheme of free general
practitioner medical services and medicines was established. Age,
invalid, widow and service pensioners, tuberculosis allowees and
their dependants were eligible to use the Service.
|
Menzies, LIB-CP
|
1955
|
From November a special means test limited access to the
Pensioner Medical Service to those who would have qualified for a
full rate pension under the income test in force at 31 December
1953. Pensioners with more income of more than two pounds per week
were excluded. Tuberculosis allowees and those already enrolled
were not excluded.
|
Menzies, LIB-CP
|
1964
|
From October telephone rental concession was introduced. A
one-third reduction of the annual rental for a telephone was
available to age, invalid or widow pensioners who lived alone, or
with other eligible people or with other low-income people.
|
Menzies, LIB-CP
|
1966
|
From January the special means test was abolished and all
pensioners were eligible to use the Pensioner Medical Service.
|
Menzies, LIB-CP
|
1969
|
From September following the introduction of the tapered means
test, those who were eligible for pension only because of the new
test were not eligible to use the Pensioner Medical Service or any
other fringe benefits.
|
Gorton, LIB-CP
|
1973
|
From June Supporting Mother's Benefit was introduced. Recipients
were eligible for telephone rental concession but not to use the
Pensioner Medical Service.
From September eligibility for the Pensioner Medical Service and
fringe benefits was restricted to pensioners with means of less
than $1716 per annum ($2990 for a couple).
|
Whitlam, ALP
|
1975
|
From July:
- The Pensioner Medical Service was superseded by the
introduction of Medibank. Pensioners were entitled to the full
range of medical services. Free pharmaceuticals continued as under
the Pensioner Medical Service and eligible pensioners were issued
with a Pensioner Health Benefit Card.
- The Department of Social Security Annual Report for
1974-75 mentions fare reductions available to pensioners travelling
on Australian Government rail and shipping services.
|
Whitlam, ALP
|
1976
|
From September:
- Pensioner Health Benefit Cardholders were exempt from the
Health Insurance Levy introduced in October 1976. They remained
entitled to standard Medibank medical and hospital cover.
- The Department of Social Security Annual Report for
1975-76 mentions mail redirection concessions for pensioners and a
range of concessions offered by State Governments for the first
time. State concessions had however existed at least since
1972.
|
Fraser, LIB-NCP
|
1983
|
From January pensioners who did not qualify for a Pensioner
Health Benefit Card were made eligible for concessional rate
pharmaceuticals, paying $2.00 per item.
|
Fraser, LIB-NCP
|
1983
|
From November the basic income limits for the fringe benefits
income test were indexed on a similar basis to the indexation of
pension rates.
|
Hawke, ALP
|
1988
|
From January holders of Pensioner Health Benefit Cards were able
to retain fringe benefits for three months where their income rose
no more than 25 per cent above the income test limits.
|
Hawke, ALP
|
1990
|
From October access to free pharmaceuticals for Pensioner Health
Benefit Card holders was replaced by pharmaceuticals at a
concessional rate of $2.50 per item. Once expenditure per family
reached $130 per annum there was no charge for additional items. A
Pharmaceutical allowance was introduced to compensate pensioners
for their reduced entitlements to free pharmaceuticals. The
allowance was paid at the rate of $2.50 per week and indexed
annually.
|
Hawke, ALP
|
1992
|
From July Telephone allowance was introduced to replace the
telephone voucher scheme. Quarterly payments totalling $51.80 per
annum were paid to pensioners who qualified for fringe benefits and
were telephone subscribers.
|
Keating, ALP
|
1993
|
From April the separate income and assets tests for fringe
benefits were abolished. All pensioners were given eligibility for
fringe benefits.
|
Keating, ALP
|
1995
|
From September Disability Support Pension (DSP) recipients could
retain fringe benefits for 12 months after losing eligibility due
to earnings.
|
Keating, ALP
|
2004 |
From December a utilities allowance
of $100 for a single person and $50 for each member of a couple was
paid annually to age pensioners and age service pensioners. The
allowance was paid in two installments in March and September of
each year. |
Howard,
LIB-NPA |
2006 |
In June a one-off payment of
$102.80 for a single person or $51.40 for a partnered person, was
paid to people of age pension age in receipt of income support and
recipients of Mature Age Allowance, Widow Allowance and Partner
Allowance.
From July eligibility for Telephone Allowance was extended to
Newstart and Youth Allowance recipients who had a' partial capacity
to work' (partially disabled) or were single 'principal carers'
(sole parents). They could retain eligibility for 12 months
(disabled) or 6 months (sole parents) after ceasing to receive an
allowance.
Eligibility for the Pensioner Concession Card was extended to
Newstart and Youth Allowance recipients who had a 'partial capacity
to work' (partially disabled) or were single 'principal carers'
(sole parents). They could retain eligibility for 12 months
(disabled) or 12 weeks (sole parents) after ceasing to receive an
allowance.
Eligibility for Utilities Allowance was extended to recipients
of Mature Age Allowance, Widow Allowance and Partner Allowance.
|
Howard,
LIB-NPA |
2007 |
In June a one-off payment
of $500 was paid to people of age pension age in receipt of income
support and recipients of Mature Age Allowance, Widow Allowance and
Partner Allowance. |
Howard,
LIB-NPA |
2008 |
From March the rate of Utilities
Allowance was increased to $500 per annum for a single person and
$250 per annum for a partnered person. It was paid quarterly.
Eligibility was also extended to all people receiving Disability
Support Pension, Carer Payment, Wife Pension, Widow B Pension and
Bereavement Allowance.
The rate of Telephone Allowance for people recieving Age
Pension, Disability Support Pension, Carer Payment and Commonwealth
Seniors Health Card was increased to $132 per annum if they had an
internet connection in their home.
In June a one-off payment of $500 was paid to people of
age pension age in receipt of income support and recipients of
Mature Age Allowance, Widow Allowance, Wife Pension, Widow B
Pension and Partner Allowance.
In December all pensioners received an
economic Security Strategy payment of $1400 as part of the
Government response to the Global Financial Crisis.
|
Rudd, ALP |
2009 |
From September the Pension Supplement
(PS) was introduced for recipients of Age Pension, Carer Payment,
Wife Pension, Widow B Pension, Bereavement Allowance, Disability
Support Pension (except if under 21 years without children) and
certain other recipients of age pesnion age. PS combined the value
of Telephone Allowance, Utilities Allowance, Pharmaceutical
Allowance, the GST Supplement and an additional increase into one
payment.
PS was income tested as part of the
pension except that there was a minimum component that was not
reduced until entitlement to the pension plus PS was reduced to
nil. PS was paid fortnightly but up to half could be paid quarterly
if the pensioner chose that option.
|
Rudd, ALP |
Commencement Date
|
Details
|
Government at
Commencement
|
Original Enabling
Legislation:
Social Services
Act (No. 2) 1970 (No. 59 of 1970)
|
1958
|
From October Supplementary Assistance (SA) was introduced for
pensioners paying rent and having no more than ten shillings per
week of private income. It was paid at the rate of ten shillings
for single pensioners and married pensioners where only one spouse
was receiving a payment.
|
Menzies, LIB-CP
|
1965
|
From October:
- Eligibility for SA was extended to pensioners whose wives
received a Wife s Allowance and to single residents of benevolent
homes.
- The means test was altered so that SA was reduced by the amount
of means as assessed in excess of 26 pounds.
|
Menzies, LIB-CP
|
1968
|
From September married age or invalid pensioners, whose spouses
were receiving benefits, became eligible for SA.
|
Gorton, LIB-CP
|
1970
|
From March married pensioners who had to live apart due to
illness became eligible for SA.
|
Gorton, LIB-CP
|
1974
|
From November:
- The amount of SA was restricted to the amount of rent actually
paid.
- SA for sheltered employment allowees was replaced by Incentive
Allowance. The new allowance was paid at the rate of $5 per week
and was means test free.
|
Whitlam, ALP
|
1982
|
From February the maximum rate of SA became either $8 per week
or one half of the amount by which rent paid or payable was more
than $10 per week, whichever was the lower. Tenants of government
housing authorities ceased to be eligible.
|
Fraser, LIB-NCP
|
1984
|
From March SA was no longer subject to income tax.
|
Hawke, ALP
|
1985
|
From September Supplementary Assistance was renamed Rent
Assistance (RA).
|
Hawke, ALP
|
1986
|
From December the rent threshold above which RA was payable was
increased to $15 per week.
|
Hawke, ALP
|
1987
|
From July the separate income test on RA was abolished and RA
was means tested under the pension income test.
From December RA for families with children was paid as part of
Family Allowance Supplement (FAS).
|
Hawke, ALP
|
1989
|
From June:
- A $5 per week payment was added to RA for those with
children.
- Ex-prisoners were able to reduce the waiting period by the
length of time they spent in prison.
- The rent threshold above which RA was payable was raised to $20
per week.
- Those paying for board and lodgings had only two-thirds of
their payment counted as rent.
From December the maximum rate was standardised across all
pensions, benefits and family allowance supplement.
|
Hawke, ALP
|
1990
|
From June a higher rate was introduced for those with three or
more children.
|
Hawke, ALP
|
1991
|
From March:
- The rent threshold above which RA was paid was increased to $25
per week.
- Twice yearly indexation in line with movements of the CPI was
introduced for the rate of RA.
|
Hawke, ALP
|
1993
|
From March:
- The rent threshold above which RA is payable was indexed and
set at levels which varied according to family situation. For
single people with no children the threshold was $60 per fortnight,
for single people with children $80 per fortnight, for couples
without children $100 per fortnight and for couples with children
$120 per fortnight.
- Above the new thresholds RA was paid at the rate of 75 cents
for each dollar of rent paid up to the maximum amount.
|
Keating, ALP
|
1996
|
From March the following changes occurred:
- Maximum rates of RA were increased by $5 per fortnight for
families with children
- The minimum amount of rent that must be paid to receive RA was
raised by $5, and
- People receiving RA under various savings provisions resulting
from previous changes in RA conditions had their rate frozen until
general rates caught up to their higher saved rate.
|
Howard, LIB-NPA
|
1997
|
From July single people sharing accommodation were eligible for
a maximum rate of RA which was two thirds of the maximum rate
payable to other people receiving RA. People receiving Carer
Payment (CP) or Disability Support Pension (DSP) were exempt from
this change.
|
Howard, LIB-NPA
|
1998
|
From January people who lived in public housing but were not the
primary tenant were to be excluded from eligibility for RA.
Exemptions applied where the primary tenant was unsubsidised or
where the State Housing Authority had been notified of the
sub-tenants presence and their income had been taken into account
in setting the rent for the household.
|
Howard, LIB-NPA
|
2000
|
From July the rates of payment for RA were increased as part of
a package of measures to compensate for the introduction of the
GST.
|
Howard, LIB-NPA
|