National Seniors has called out the Coalition for an “unfair” and “covert” policy to boost the Budget bottom line at the cost of pensioners, with what it’s called a “pensioner tax” through high deeming rates.
National Seniors says keeping age pension deeming rates high is a “pensioner tax”, and is calling on the Federal Government to cut the rates in line with RBA cash rate cuts.
“To leave the rates unchanged for more than four years while there have been five interest rate drops by the RBA shows the government is balancing the budget on the backs of pensioners who have their money in savings accounts,” said National Seniors.
“You can’t demand – as the Treasurer and PM have both done, that the big banks pass on the full cut when the RBA lowers its rate and not do the same for pensioners. It’s not a good look.”
The seniors organisation notes that the deeming rates have been unchanged for over four years – at 1.75% for amounts under $51,800 and 3.25% for amounts over that threshold – while the RBA has cut the cash rate by 1.25%.
“The deeming rates must be adjusted. If the deeming rate is not dropped by the full 1.25% for amounts above and below $51,800, it will be manifestly unjust. The government has been banking the difference for more than four years.”
National Seniors understands that Minister for Families and Social Services is “likely” to announce lower deeming rates this week. But the organisation says that if the rates aren’t dropped by 1.25% than this would represent a continued “pensioner tax”.
“You can’t have credibility as a government attacking the opposition over a ‘retiree tax’ and then have deeming rates left so high they are a pensioner savings account tax.”
National Seniors is also calling for an independent body to oversee deeming rates and the broader age pension.
“Josh Frydenberg has announced a review into the retirement income system. He can start here and make a fair independently set deeming rate that is linked to the RBA rate.”
“The age pension has become a prime target for federal budget savings, with an ageing population and the overall cost used to justify cutting the number of people receiving the pension.”
“National Seniors believes an independent tribunal would take the politics out of the pension-setting process and help alleviate the chronic poverty being faced by pensioners – one-in-three women over-65 live below the poverty line and one in four pensioners overall.”
National Seniors and charity the Benevolent Society are running a campaign called Fix Pension Poverty.