Pensioners are likely to be worse off after the Government announced it would revise pension deeming rates upwards because of Australia’s strengthening economy.
Aged-care advocacy groups are outraged by the Government’s plans to revise the pension deeming rate, which will see cuts to the pension payments to part-pensioners who are already ‘doing it tough’ due to the values of their investments falling as a result of the global financial crisis.
“Some of these people lost up to 50 per cent of their investments, and the reality is, due to their age, they will never see it regained during their lifetime,” said Anne-Marie Elias from the Council of the Ageing in NSW.
The Federal Government believes that pensioners will get more money later this month despite the revision in the deeming rate for pensions.
Families and Community Services Minister Jenny Macklin defended the new pension deeming rate saying it would still be lower than under the previous Liberal Government.
“When the Budget pension rise and indexation are taken into account, single pensioners on the maximum rate are up to $100 a fortnight better off than they were in August last year,” she said in a statement on Saturday.
Prime Minister Kevin Rudd said the increase in pension payments was the largest in the aged pension’s 100-year history.
“We are proud of that fact that we’re able to increase the single aged pension by such a large amount in last year’s budget,” he told reporters.
Opposition Leader Tony Abbott was critical of the Government’s policies, believing Government spending was placing pressure on interest rates and giving with one hand and taking away with the other.
“If the Rudd government wasn’t engaged in this spending spree, we wouldn’t have the impact on interest rates and we wouldn’t have pensioners having a pension increase on the one hand and a pension cut on the other hand,” he said.