The population of retired women increased more than men. On average, women retire sooner than men. Income at retirement Between and The government pension remained the main source of income for most retirees. More people retired with superannuation as a source of income, but the increase was greater for men than women.
For people intending to retire, the main factor that will influence their decision about when to retire was financial security.
Retirement by state and territory Tasmania and South Australia had the highest proportion of retirees. Between and New South Wales had the greatest increase in retirees 1. Western Australia and Australian Capital Territory showed a decrease in their population of retirees.
Retirement definition The definition of retirement no longer requires people to have previously worked in a job for at least 2 weeks. Perturbation Retirement and Retirement Intention data in published outputs will no longer have perturbation applied, an approach consistent with other ABS Labour statistics publications. Table name changes In order to make the data easier to use, table names have been changed to shorter and more concise names that better describe the contents of each table.
Data downloads Data item list. Data files. Download xlsx [ Table 1. Retirement and retirement intentions summary. Download xlsx [74 KB]. Table 2. Note that Indigenous identification in most Centrelink and population data is voluntary.
This may influence the quality and completeness of the data and subsequent reporting on the number and proportion of Indigenous Australians receiving Age Pension. Means-tested arrangements are designed to ensure that income support targets those most in need, and that it reduces as recipients are more capable of providing for themselves. Recipients can earn a certain amount per fortnight before their payment is slowly reduced to a part-rate payment.
Over the 5 years to March , the proportion of recipients receiving a part-rate Age Pension payment has fallen. This decline over the last 5 years is partly attributable to the January measure to rebalance the assets test, which increased the assets test free areas and changed the rate at which assets over the free area reduce the rate of pension — thereby changing the proportion of part-rate pensioners. The number of those declaring earnings also dropped over the last year; in December , it was at its lowest proportion 3.
Retirement and retirement intentions, Australia. ABS: Canberra. Viewed 1 July Social Security Guide: qualification for age. DSS: Canberra. Viewed April This website needs JavaScript enabled in order to work correctly; currently it looks like it is disabled.
Please enable JavaScript to use this website as intended. The difference between the single and couple rates of pension also has an important effect on the adequacy of payment for specific groups. As noted in Chapter 1, the single-couple rate reflects the fact that a single person living alone usually does not have the economies of sharing household expenses commonly experienced by a couple.
The single rate of pension is currently 60 per cent of the combined couple rate. Chart 11 shows how the single-couple ratio in Australia compares with the relativities in other major OECD countries, which fall into a range from 57 per cent to 75 per cent, but somewhat below the average value of International comparison of single—couple relativities. These included the relative incidence of financial stress and more econometrically based approaches using shares of food expenditure and types of private consumption.
These measures of equivalence ranged from 0. It should also be noted that this type of analysis only considers the relativities between household types — that is, a single person household compared with a couple only household. Other types of household have different relative needs — for example, a single person living with others compared with a couple living together.
While the gains from this type of sharing may not be as great as those obtained by a member of a couple, the costs are likely to be substantially below those of a person living by themselves.
Typically, the relative income required by a single renter living alone is higher than that required by a couple renting. These comparisons of single-couple equivalences are consistent with the analysis of a range of measures in earlier sections of this report, including the budget standards approach, relative income distribution and the incidence of stress, which suggest that outcomes for those single pensioners living by themselves are somewhat lower than those reported by couples.
In addition to the level at which payments are struck, the basis on which they are adjusted over time contributes to their adequacy. The CPI's goal is to provide a broad measure of inflation in the household sector. As an aggregate measure, it records the impact of price changes on the total quantum of consumption across the sector 6. As a general measure of price inflation, the CPI does not reflect the impact of costs for particular households and indeed is more heavily weighted by the consumption patterns of higher income households, who contribute the greater weighting of their purchases.
As a result, where households have a different pattern of consumption to the average of the population, changes in the specific costs they encounter may not be appropriately reflected by the CPI. To overcome this, the ABS has developed a number of Analytical Living Cost Indexes which account for the specific purchases made by different household types 7. Chart 12 compares one of these analytical indexes—the Age Pensioners index—with the CPI, showing the trends in both measures of price increase and the difference between them.
Over the 27 years for which the two indexes are available, the two measures of prices have varied at particular times. Over the whole period, the cumulative difference has been relatively small. The measure of prices for Age Pensioners has increased by Over the past five years, while the CPI has increased by If it were possible to further breakdown the Other Government Transfer Recipient group something that is not currently able to be done because of the small sample size it is likely that more specific subgroups of pensioners and allowees would have faced cost increases either above or below this average.
Of course, any measure of price change, whether it is the CPI, the Age Pensioner ALCI or any other measure, will not describe the actual price changes faced by a household. Such measures still assess price changes in an average basket of goods with average expenditure weights applied to the categories of items in the basket. There will always be a significant number of households with expenditure weights that mean they face higher or lower than average price changes over any time period.
Most Australian income support payments are paid on a fortnightly basis, reflecting the role of these payments in providing individuals and families with the money they need for their day-to-day living costs.
Chapter 1 showed that different income support recipients get different packages of income support. From the perspective of the individual pensioner or allowee, the frequency of payments and balance of lump sum and ongoing support are important because of how this affects the capacity to manage regular recurrent costs and less regular or unplanned lump sum costs.
In addition to the quarterly and annual payments listed above, it should be noted that pensioners and allowees can get advances of their payments that they then repay. They can also use Centrepay to make regular payments to cover expenses such as utility bills and can use electronic banking to make direct payments from their accounts to help manage their finances.
Since annual and large quarterly payments are a relatively new component of the income support system, no research is available on customer preferences. This gives an insight into the need for mechanisms within the income support system to give people the flexibility to balance different types of expenditure. Data is available on whether pensioners think that they have the ability to meet emergency needs.
As the person's reliance on income support increases, their capacity to raise funds in an emergency decreases. For example, of all households relying on the Age Pension for 90 per cent or more of their income, This increased to The main source households would use to raise funds in an emergency is private savings.
For the comparable Disability Support Pension households, around half said they could access savings for this purpose. Most income support reliant households have relatively few assets although, as Chapter 3 describes, there are some comparatively wealthy households.
This is even more marked when cash savings, which are an important source of liquid assets, are considered. Amongst these highly welfare reliant households, Age Pensioners—along with those on DVA payments—have higher levels of savings and much lower proportions reporting very low savings Chart The main form of non-housing consumer credit used by Australians is credit cards. The Reserve Bank of Australia reports there are some Many consumers, however, do not hold a credit card either because they do not want to use one or because they have not been able to obtain one.
This may be due to their credit history or because their circumstances are not considered by lending institutions to offer sufficient assurance of their ability to meet their obligations. The majority of people on income support This proportion varies between types of income support and with the extent of reliance upon income support Table 3. Overall, the more reliant a household is on income support the less likely people are to have a credit card.
Chapter 1 reported that one principle of the social security system was to ensure that households in different circumstances achieve a comparable standard of living. This is an area where the income support system crucially depends on the wider social protection system; as is outlined below, this is particularly the case for those who face high costs because of disability.
One question in the design of social policy is whether the direct provision of services will meet an individual's needs more efficiently and effectively than cash transfers. Transfer payments work best when the costs of different groups are clustered tightly around the average. They tend to be based on an assessment of the average need of population groups for example, renters, singles or couples. However, transfer payments work less well if used to address costs that are borne unevenly in the population.
In this case there is a risk that groups with high needs will be significantly under compensated and groups with low needs will get a windfall gain. Australia's social protection system is designed to provide assistance as part of an integrated approach to people at key stages or events across the life course. In addition to income support payments and concessions on a range of goods and services such as those provided through the Pensioner Concession Card, Commonwealth Seniors Health Card and Health Care Card, the social protection system encompasses subsidised services such as child care, health, housing, transport, disability and aged care, compensation for work and other injuries, paid sick leave, and other cash and in-kind benefits.
These contribute to the overall financial and economic security of pensioners. Elements of the system are funded by all levels of government through transfers, tax expenditures and funding of community and welfare services. Business also contributes by providing employee benefits such as maternity and sick leave.
The non-government sector also plays a role by providing services, as does the public for example through compulsory levies on motor vehicles to cover compensation payments for road accident injuries.
Transfer payments operate in conjunction with these other forms of assistance to meet the needs of income support recipients. In a number of service areas, individuals may contribute to the overall cost of the service provided according to their ability to pay. Residential aged care services are a case in point.
Here the government provides significant funding through the non-government sector's provision of aged care accommodation and services. The individual also contributes, either through paying a proportion of their pension or specified amounts based on their income and assets.
From the data available it appears that these services are well targeted. The ABS estimated in —04 that It also appears that these services are a significant component of the total support available to low income households. Chart 14 shows, for those households that receive more than 90 per cent of their income from transfer payments, the value of net private income, transfers and non-cash benefits for households, classified by the main form of income support received by the household.
Both the level and mix of these non-cash benefits vary between the household types associated with these different payments. For example, while older income support reliant households have a very high use of health services, households with some income from the Disability Support Pension have a relatively high use of other welfare services, including disability services. These households, along with single parents, are high users of public housing.
Because these data reflect average values of assistance across households, they disguise the much greater diversity in the benefit obtained by different households. As the population ages, the need for additional health care in the community will increase. One of the most significant needs individuals may have over their lives is the need for, and access to, medical and health services.
The timing and scale of the need for these services may be unpredictable for many. Australia, responds directly by providing a universal health safety net, which ensures all Australians can access health and medical assistance without being constrained by their ability to pay.
Another feature of an ageing population will be an increase in the number of people with disability who need access to services and support. Disability issues are central to this review as they cut across the income support population. Many people with disability have additional needs and associated costs related to their disability. The nature and level varies significantly from individual to individual. They are ameliorated, in part, by services funded by government that respond directly to a range of individual and household needs.
There is little systemic information available on the dispersion of the costs of disability. The DVA, however, has a unique data set drawn from its population of White Card holders, which provides information on service types by cost and by the level of disability of the card holder.
These data represent the average annual cost of the White Card at each point of the general rate disability pension under the Veterans' Entitlement Act. The White Card provides for treatment and other services for a veteran's accepted service-related disabilities.
The data should be interpreted with some caution because they are the product of a complex eligibility system:. The costs reflect a range of the total costs of disability and not the costs for individuals. These actual costs are much harder to identify and there is considerable debate surrounding them. A recent report undertaken for the United Kingdom's Department for Work and Pensions Tibble reports that while research generally agrees on there being extra costs of disability that there is much variance in the findings of different studies of the cost to individuals with little agreement on the size of costs, the costs for specific groups and items, nor the factors that influence the size of costs.
As an example of governments' contribution to the costs incurred by people with disability, the disability related services provided through the HACC program and the CSTDA are briefly described next. State and territory governments manage the day-to-day administration of the program.
HACC provides community care services to frail aged and younger people with disability and their carers to promote and enhance their independence at home and in the community.
Types of services funded through HACC include nursing care, allied health care, meals and other food services, domestic assistance, personal care, home modification and maintenance, transport, respite care, counselling, support, information, advocacy and assessment. Information on the use of some of these services in —07 is included in Table 4. The majority The CSTDA provides the national framework for the provision of government support to service for people with disability.
Under the agreement, all parties are responsible for funding specialist disability services. The state and territory governments have responsibility for the planning, policy setting and management of accommodation support, community support, community access and respite care for people with disability. The Australian Government has similar responsibilities for specialised disability employment assistance.
Expenditure per client through the CSTDA tends to be, on average, much higher than HACC expenditure due to the more intensive nature of the services being delivered—for example, supported accommodation services. Table 5 provides information on some of the services funded through the CSTDA by service type in — It is not a total list. The social security system works in a complex demographic, economic and social environment. The community expects it to respond to new needs arising from demographic, economic and social change.
By changing incentives and providing options, the system also affects each of these dimensions. This section outlines briefly the key demographic, economic and social trends that have affected the social security system in the medium to long term. Australia's population is changing and its structure is dynamic. Over the past 25 years the population has increased by nearly 40 per cent. The population is ageing: in only nine per cent of Australians were aged 65 years and over but today it is 13 per cent, and this proportion is projected in the second Intergenerational Report to increase to 25 per cent by Demographic trends will play a significant role in the sustainability of the social security system into the future through their impact on the aggregate level of income support payments and the number of people in the workforce who will support these payments through the tax system.
The ageing of Australia's population, coupled with higher life expectancies, is projected to drive a net increase in payments to individuals from 6. The population aged 65 years and over is also changing. New generations of retirees, such as the baby boomers, are different from earlier generations born before the Second World War, and Generations X and Y will differ again.
The differences between these cohorts mean that there can be quite marked shifts in the characteristics, size and expectations of segments of the population over quite short periods. Pressures to improve assistance or defray costs can therefore develop quite quickly in the income support system.
Labour market participation is a critical element of the linkage between the economy and individual and community wellbeing. Female participation has shown marked increases over the last 40 years. With changes in social values and labour market conditions, many older women have returned to work after their children have grown, while younger women, having entered the labour force in their twenties, are maintaining their participation across their lifetime with shorter periods of withdrawal associated with family formation.
Notwithstanding this strong growth, the employment rate for women in Australia remains some six-and-a-half or seven percentage points below the high participation countries of the OECD. Australia has the ninth highest rate of employment of mothers with children aged six years and over in the OECD but the eighth lowest rate for those with younger children. Single mothers, who in Australia have an employment rate 9. Labour force participation rates for men aged 15 years and over are currently around 73 per cent, below the rates of 80 per cent and higher recorded in the s but above the low of around 71 per cent in the early s.
The greater availability of part-time employment and relatively low rates of unemployment have increased the opportunity for many on income support to re-enter the workforce, including those who are unable to take up full-time work. This is reflected by the increasing levels of overall participation including by second earners and students.
Rising wages across the economy also have impacts on the social security system. For pensioners, changes in earnings directly affect the rate of assistance through the 25 per cent of MTAWE benchmark see Section 1. More generally, changes in overall levels of wellbeing in the community act as one of the reference points that people use to judge the adequacy of income support payments. With increasing earnings dispersion, these judgments can become increasingly varied.
There has also been a shift in the relative role of earnings and transfers in the incomes of low-income working families with children. Australian households are much smaller than they used to be and, with the ageing of the population, are increasingly composed of older couples and singles rather than couple families with dependent children.
Single parenthood, which increased almost continuously between the s to s—from Within families, the increasing rate of labour force participation by women has resulted in a marked increase in two-income households and a decline in the traditional single breadwinner household. Changing social attitudes and aspirations are also critical to judgements about the role of the transfer systems and what it should deliver.
The effect of these trends on the social support system is complex: as noted above there are new needs such as child care , cost pressures for example, the demographic impact on Age Pension and changes to expectations including different judgments about what is an adequate household income, including in retirement.
Governments have responded to these pressures in various ways, including by funding additional services, increasing payments, expanding coverage of payments and introducing stronger obligations to increase self provision for some groups. Over most of the 20th century an increasing proportion of the population received transfer payments. Many of the initial changes reflected the increasing role of social protection through the welfare state, as well as changing population structures. By the end of the s and early s, 12 per cent of the population aged 15 years and over received transfer payments and this increased rapidly during the s to It peaked in at Chart 16 shows the trend over time of the percentage of the population receiving income support family payments and child care are not included.
Age Pension has been a feature of the Australian income support system for the last years. The proportion of the population receiving Age Pension has grown over time as the population has aged and the level of payment has increased. The proportion of working age people receiving income support has grown in the last 30 years. Some of this growth is due to increases in real rates of assistance such as extensions of Rent Assistance to allowees that, combined with reductions in income test taper rates, has made more people eligible for a part-rate of income support.
Much of the growth, however, reflects social and economic factors. As well as cyclical economic conditions, periods of high unemployment and structural change have created cohorts with very high income support durations. Other labour market changes, such as increased part-time work, especially in association with increases to income test cut-outs, have extended income support into the working population.
Social changes, such as increased levels of family break-up and later workforce entry as a result of longer periods in education, have also played a role. Particularly marked in the chart are more recent declines in rates of receipt as economic conditions have improved. Both pensions and allowances are indexed by the CPI to maintain their purchasing power in the face of price increases. In addition, pensions are benchmarked to earnings, as measured by the MTAWE, so recipients who are not able or expected to participate in the labour market can benefit from growing productivity.
As shown in Chart 17, there has been considerable divergence in trends in the rates at which various payments are made as a result of these settings. In effect, while pensions have increased in real value over most of the period since , more recently allowances have simply maintained their real value because they are only indexed to the CPI. A consequence of this is that over the period 20 March to 19 September allowee couples and singles on the higher rate of allowance receive 86 per cent of the couple and single rates of pension, and singles on the lower rate of allowance receive 80 per cent of the single pension rate.
The rates at which pensions and allowances are paid will continue to diverge with growth in productivity and real wages. These rates reflected the different policy contexts for pensions and allowances noted in Chapter 1: pensions were intended to provide long-term support to those who were unable to support themselves, while allowances were intended primarily for short-term support and to have strong incentives to take up work.
The trends over time are in Chart The pattern of expenditure reflects many factors, changes in economic conditions, the development of the Commonwealth role in income support including the take-over of various state payments, increases in the real level of assistance and relaxed means testing arrangements, and expansions in coverage as a result of policy change, for example the recognition of single parents, carers and expanded definitions of disability.
While expenditure has generally trended upwards it has fallen as a share of GDP at various stages as a result of sustained economic growth. This section provides an overview of the characteristics of those who receive income support, including gender, age, duration, transitions and living arrangements. What emerges is the complexity of how people interact with the system. While we are used to thinking about people through the lens of discrete categories Age Pensioners, Carer Payment recipients or Disability Support Pensioners the reality is different.
For example, there are as many people with disability on the Age Pension as there are on Disability Support Pension. In June around 58 per cent of all income support recipients were women, with 2,, receiving a payment compared to 1,, men.
As Chart 19 shows, gender balance varies between payments with women constituting Of the major payments, Newstart Allowance had the highest proportion of male recipients at While roughly equal numbers of males receive income support 8 as a single person as they do as a member of a couple, a much higher proportion of women are single.
Indeed, around two-thirds of women receive income support as a single person, compared with around one-third as a member of a couple. The main reasons for this are that women have a longer life expectancy and are outliving their partners, and that women are more likely to be single parents.
As discussed in Section 2. The median age of income support recipients is 62 years, comprising a median age of 74 years for those on the Age Pension and 39 years for others. There is considerable variation in the rate of receipt by age, with similarities and differences in the patterns of the ages of men and women see Chart For women and men, there is an early peak reflecting the age group receiving income support for students.
However, the number of women who are single parents and the associated lower labour force participation is a key driver of the fact that women have higher rates of income support receipt at almost every age than men. Chart 20 also shows the substantial increase in the proportion of the population receiving income support payments after the age of It also illustrates how the significant proportion of the population who receive Age Pension transfer from another payment, with rates of income support receipt increasing rapidly in the population aged over 55 years.
This issue is explored in more detail in the section dealing with duration of income support receipt. Try our Age Pension calculator to get an indication of your potential Age Pension entitlements. To qualify for the Age Pension in Australia you must have reached Age Pension age which depends on your date of birth but is currently 66 years and 6 months , satisfy Australian residency rules , and pass both an income test and an assets test.
Depending on your level of income and the assets you own, you may qualify for either a full or part Age Pension. Learn more about how the assets test works. This is known as the work bonus. Learn more about how the income test works. If you are over the threshold limits for a full Age Pension in either the assets or income tests or both , your Age Pension will be based on the test that delivers the lower amount.
This is a common question. The answer is you will be assessed under the income and assets tests as a couple and, if eligible, you will receive half the combined couple rate. This is best illustrated with an example. Bill reached his Age Pension eligibility age of 66 years in January He meets the Age Pension residency requirements and passed both the Assets and Income tests, not reaching the lower thresholds of either one.
However, his partner Sue is only 62 and she is therefore not yet old enough to be eligible for the Age Pension. He would not be eligible for the energy supplement because this is only available for people who had a Commonwealth Seniors Health Card before 20 September The minimum and maximum pension supplement amounts per fortnight for single and couple part pensioners are provided in the table below.
Source: Services Australia. Figures correct as at 20 September You can arrange to have the pension supplement paid quarterly rather than fortnightly if you prefer, to help you budget for regular quarterly bills like electricity. Unlike the Age Pension supplement, the energy supplement is only available to certain Age Pensioners. The Age Pension rates will next potentially change on 20 March In September the Age Pension rates did not increase, although that was for the first time since Age Pension rates and the upper thresholds for the assets and income tests used to determine eligibility for a part Age Pension are adjusted in March and September each year.
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