Contents
- Part 1 Overview
- Part 2 Performance reporting
- Part 3 Management and accountability
- Part 4 Appendices
- Part 5 Financial Statements
Annual Report 2005–2006
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Annual Report 2005–2006
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Support for the aged contributes to Outcome 3 by:
Age Pension is a payment for people of age pension age who cannot support themselves fully in retirement. The qualifying age for the Age Pension is currently 65 for men and 63 for women. The qualifying age for women is being progressively raised and will reach 65 by 2014. From 1 July 2007, the qualifying age for women will be 63.5.
This payment is made to state and territory governments to compensate for additional people entitled to state and territory government concessions following the extension of the Pensioner Concession Card to all part-rate pensioners in 1993.
The Pensioner Concession Card, Commonwealth Seniors Health Card and Health Care Card are issued to provide holders with access to:
Card holders may also access a range of other concessions provided by states and territories and private organisations, such as concessions on health, household, transport, education and recreation services. The range of concessions available varies according to card type, and also differs from state to state.
FaCSIA promotes independence and self-reliance through a range of publications which provide information to retirees and pre-retirees on planning, saving and preparing for retirement, investment options and the effective use of savings for self-support. The department works with other agencies and community groups in producing these publications which are available through Centrelink offices and on the FaCSIA website.
The National Information Centre on Retirement Investments is an independent body funded by the Australian Government to provide free information on planning and saving for retirement, investment options and effective use of financial resources in retirement.
Available to:
The Pension Bonus Scheme is intended to encourage older Australians to defer Age Pension and continue working beyond age pension age rather than retiring from the workforce and claiming Age Pension. It provides a one-off tax-free lump sum to eligible people and is paid when a person registered in the scheme finally claims and receives Age Pension.
An agreement has been implemented with Great Southern Rail to provide rail travel concessions to pensioners, eligible veterans and Commonwealth Seniors Health Card holders on the Ghan, the Overland and the Indian Pacific rail services.
Seniors Concessions Allowance is a payment for Commonwealth Seniors Health Card holders to help with household costs. The payment recognises that most card holders cannot access the state-based concessions available to income support recipients with a Pensioner Concession Card.
Available to Commonwealth Seniors Health Card holders to assist with the cost of maintaining a telephone service.
Utilities Allowance is paid to income support recipients of age pension or veterans’ service pension age to help with utilities bills.
| Output Group 3.1: Support for the aged |
(A) Budget a 2005–06 $’000 | (B) Actual 2005–06 $’000 | Variation (column B minus column A) $’000 | Budget b 2006–07 $’000 |
|---|---|---|---|---|
| Administered expenses (including third party outputs) | ||||
| Compensation for the extension of fringe benefits to pensioners and older longterm allowees and beneficiaries | 197,538 | 197,538 | 0 | 201,834 |
| National Information Centre on Retirement Investments | 479 | 479 | 0 | 487 |
| Reimbursement to Great Southern Rail for concessional fares | 7,138 | 5,377 | -1,761 | 7,506 |
| Special Appropriations | ||||
| Age Pension | 20,670,429 | 20,588,124 | -82,305 | 22,094,652 |
| Aged persons savings bonus | 0 | 4 | 4 | - |
| Self-funded Retiree’s supplementary bonus | 0 | 23 | 23 | - |
| Seniors Concession Allowance | 84,097 | 93,420 | 9,323 | 65,259 |
| Telephone Allowance for Commonwealth Seniors Health Card holders | 14,854 | 18,591 | 3,737 | 15,575 |
| Utilities Allowance | 283,719 | 288,109 | 4,390 | 152,069 |
| Total administered expenses | 21,258,254 | 21,191,665 | -66,589 | 22,537,382 |
| Price of departmental outputs | ||||
| Policy services & program management | 14,323 | 15,036 | 713 | 16,987 |
| Service delivery (FaCSIA) | - | - | - | - |
| Service delivery (Centrelink) | 363,647 | 359,494 | -7,153 | 230,300 |
| Service delivery (Other) | 4,534 | 4,541 | 7 | 6,526 |
| Total price of departmental outputs | 382,504 | 379,071 | -3,433 | 253,813 |
| TOTAL FOR Output Group 3.1 (Administered expenses and price of departmental outputs) | 21,640,758 | 21,570,736 | -70,022 | 22,791,195 |
| Staffing Years (Number) | 2005-06 | 2006-07 | ||
| FaCSIA (including the Social Security Appeals Tribunal) | 125 | 134 | ||
a Final estimates have been used for administered annual appropriations, administered special appropriations and departmental annual appropriations, restated in the six outcome structure used for Financial Statement reporting in 2005–06.
b 2006–07 Budget prior to additional estimates–figures have been restated from the four outcome reporting structure used in the 2006–07 PBS to the six-outcome structure used for Financial Statement reporting 2005–06.
Maximum payments to recipients – single pension base as a percentage of male total average
weekly earnings
The maximum basic rate and pension supplement for Age Pension are indexed twice a year in line
with increases in the Consumer Price Index (CPI). If, after CPI adjustment, the maximum single
basic rate is less than 25 per cent of male total average weekly earnings, it is adjusted up to that
benchmark with a proportional flow-on to the maximum partnered basic rate.
While indexation in line with CPI increases ensures payment rates reflect increases in prices, the male total average weekly earnings benchmark ensures pensioners share in any increases in community living standards as measured by the growth in wages. The real value of pension payments has substantially increased over the last decade.
Maximum payments to recipients – index of real value
Payments indexed in line with CPI.
| 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Age Pension - single | 100.0 | 100.0 | 102.2 | 102.5 | 103.7 | 105.9 | 107.8 | 109.2 | 112.4 | 112.5 | 114.8 |
| with Rent Assistance | 100.0 | 100.0 | 101.8 | 102.1 | 103.0 | 106.2 | 107.7 | 108.8 | 111.5 | 111.6 | 113.4 |
| Age Pension - couple | 100.0 | 100.0 | 102.2 | 102.6 | 103.7 | 105.9 | 107.8 | 109.2 | 112.5 | 112.6 | 114.9 |
| with Rent Assistance | 100.0 | 100.0 | 102.0 | 102.3 | 103.3 | 106.1 | 107.8 | 109.0 | 112.0 | 112.0 | 114.1 |
Note: From 1 July 2000, to compensate pensioners for the impact of the GST, the maximum rate of pension increased by 4 per cent (half of which was a payment in advance of the normal March 2001 CPI increase). This increase is known as the pension supplement. It increases in line with CPI and is paid in addition to the base rate of pension that is set to at least 25 per cent of male total average weekly earnings.
Average amount of assessed income
| 2003-04 | 2004-05 | 2005-06 | ||||
|---|---|---|---|---|---|---|
| $ | Per cent | $ | Per cent | $ | Per cent | |
| Single age pensioners | 3,375 | 92.3 | 3,513 | 92.6 | 3,748 | 93.0 |
| Partnered age pensioners | 3,839 | 98.1 | 3,998 | 98.2 | 4,240 | 98.3 |
At June 2006, 96 per cent of age pensioners (94 per cent in June 2001) had assessed private income from sources other than their pension.
For age pensioners with assessable income, assessed income in June 2006 made up, on average, 26 per cent of total income (including pension), up from 25 per cent in 2004 and unchanged from 26 per cent in 2005.
Percentage of age pensioners with assessed income greater than $500 a year
60 per cent (single), 76.9 per cent (partnered).
Average assessed income per year for people receiving less than maximum rate Age Pension
$8,683.
Average assessed income per year for people receiving maximum rate Age Pension
$867.
Ratio of assessed income to total income for age pensioners
Ratio of assessed income to total income (including Age Pension):
Percentage of age pensioners with private earnings
3.1 per cent.
Age Pension single average earnings per fortnight
$321.
Age Pension partnered average earnings per fortnight
$391.
Percentage of income units headed by a person aged 65 years and over with government pension
as principal source of income
Australian Bureau of Statistics figures on the proportion of these income units relying on Australian
Government pensions and benefits as their principal source of income are:
Percentage of income units headed by a person aged 65 years and over with government pension
contributing less than 20 per cent of income
19.9 per cent.
Percentage of income units headed by a person aged 65 years and over with government pension
contributing less than 50 per cent of income
30.6 per cent.
Percentage of age pensioners on part-rate due to means tests
38.4 per cent.
| Single ($) | Couple ($ combined) | |
|---|---|---|
| Income free area (per fortnight) | 124 | 220 |
| Asset value limit for home owners (home not included) |
157,000 | 223,000 |
| Asset value limit for non-home owners | 270,500 | 336,500 |
Average base rate reduction per part-rate pensioner per fortnight
$119.69 per fortnight.
Reductions in previous years were:
Percentage of estimated aged population who are clients
The Australian Bureau of Statistics estimates the Australian population over qualifying age for Age
Pension at 2,913,628 people for June 2006. At this time, 66 per cent, or 1,922,129 people, received Age
Pension. In addition, 269,787 people over Age Pension age received a similar means-tested income
support payment from the Department of Veterans’ Affairs, bringing total Australian Government
pension take-up for this group to 75 per cent in June 2006, down from 78 per cent in 1996.
Equitable access to payments for target or special interest groups based on level of need
Women have longer life expectancy and lower qualifying age for Age Pension than men.
Consequently, women comprise the greater proportion of people receiving Age Pension (58.4 per
cent in June 2006). Women receiving Age Pension are less likely than men to have accumulated
income and assets to provide for retirement and consequently have to spread their wealth over a
longer retirement period. As a result, 63.1 per cent of women receiving Age Pension receive the full
rate compared with 59.5 per cent of men.
Almost 43.9 per cent of Age Pension customers are single, and singles tend to be older than
partnered pensioners. Single pensioners are more likely to receive a full rate pension than are
partnered pensioners (68.1 per cent compared with 56.6 per cent). An increasing proportion of
people receiving Age Pension were born overseas. As at June 2006, 39.3 per cent of Age Pension
customers assisted by Centrelink were born overseas.
Note: Does not include Department of Veterans’ Affairs data
Number of clients assisted
At June 2006 Centrelink paid Age Pension to 1,915,793 people, up from 1,785,544 in June 2001.
In addition, at June 2006 the Department of Veterans’ Affairs paid Age Pension to 6,336 people, down from 8,026 in June 2001.
Number of age pensioners paid Rent Assistance
10.9 per cent (208,031) of age pensioners were paid Rent Assistance.
See table 2.22.
Number of customers paid under international social security agreements
At June 2006, 31,286 Age Pensions were paid under agreements (excluding New Zealand and the
united Kingdom), averaging $4,154 per year per customer. An additional 8,085 Age Pensions were
paid under the agreement with New Zealand at an average of $6,138 per year per customer, and
561 Age Pensions were paid under the former agreement with the united Kingdom, averaging
$5,677 per year per customer.
Certification from states and territories that they are complying with the agreement
All state and territory governments certified that they continue to comply with the terms of their
agreement with the Australian Government.
See table 2.22.
In 1993, the Australian Government extended the Pensioner Concession Card to all part rate pensioners and certain older long-term allowance recipients. In response to concerns from states and territories that an increase in the number of eligible card holders would have an impact on their state concession programs, the Australian Government agreed to provide an annual payment as compensation for the increased costs of core concessions – utilities, municipal and water rates, public transport and motor vehicle registration.
| Card type | Card holder numbers | Listed dependants |
|---|---|---|
| Health Care Card | 1,116,405 | 858,134 |
| (Low Income) Health Care Card | 331,675 | 20,143 |
| Pensioner Concession Card | 3,157,560 | 1,072,964 |
| Commonwealth Seniors Health Card | 310,633 | Not Applicable |
| Total | 4,916,273 | 1,951,241 |
(Data current at June 2006)
The Australian Government’s main purpose in issuing concession cards is to provide access to Pharmaceutical Benefits Scheme prescription items and certain Medicare services at a cheaper rate. Other concessions that may be offered to card holders are the responsibility of state, territory or local governments and authorities, and some private organisations. Concession cards issued by the Australian Government include:
Seniors publications promote independence and self-reliance and provide information to retirees and pre-retirees on planning, saving and preparing for retirement, investment options and the effective use of savings for self-support. Over 170,000 copies of these publications were distributed during 2005–06.
FaCSIA satisfied that National Information Centre on Retirement Investments met terms and
conditions of government funding, as specified in the contract between FaCSIA and the centre
FaCSIA is satisfied that the centre met the terms and conditions of government funding by
providing technical information to the public on retirement investment and planning issues, and by
assisting Centrelink’s Financial Information Service.
See table 2.22.
During 2005–06, the National Information Centre on Retirement Investments:
Number of eligible income support customers paid the One-off Payment
1,913,490 (which includes 80,714 customers receiving income support payment administered
by DEWR).
Number of eligible Commonwealth Seniors Health Card holders paid the One-off Payment
311,736.
See table 2.22.
Number of Pension Bonus Scheme registrations
At June 2006, among those over age pension age who were working, 29 per cent received
Age Pension (includes those with earnings or business income) and another 20 per cent were
registered in the Pension Bonus Scheme. At 30 June 2006, 104,165 people had registered in the
scheme since it commenced on 1 July 1998. In 2005–06, a total of $91,973,124 was paid in bonuses
to 8,030 people.
Reimbursement to Great Southern Rail for concessional fares
Quantity
Number of journeys on Great Southern Rail services by eligible clients
70,751.
See table 2.22.
The Australian Government funds Great Southern Rail for the cost of concessional travel by eligible veterans, Pensioner Concession Card holders and Commonwealth Seniors Health Card holders.
Number of eligible Commonwealth Seniors Health Card holders paid Seniors Concession Allowance
298,677.
Number of eligible cardholders paid Seniors Concession Allowance at 30 June 2006.
Instalments are paid in June and December each year.
See table 2.22.
Percentage of eligible Commonwealth Seniors Health Card holders receiving Telephone Allowance
93.2 per cent.
Number of Commonwealth Seniors Health Card holders receiving Telephone Allowance
287,984.
See table 2.22.
Number of eligible income support customers paid utilities Allowance
1,879,822.
Number of eligible cardholders paid utilities Allowance at 30 March 2006.
Instalments are paid in March and September each year.
See table 2.22.
Ratio of departmental expense to administered expense
1.8c:$1
Research and evaluation is of a high standard (timely, fulfils terms of reference, complete,
methodologically sound) and contributes to policy understanding and development
100 per cent.
Service agreements/contracts that meet legislative, government policy and departmental
requirements in place with all service providers
100 per cent.
Service providers meet terms and conditions of funding
FaCSIA ensures that service providers meet terms and conditions of funding.
Ministers, parliamentary secretary and their offices satisfied with the quality of policy advice and
department meets standards for policy advice
The ministers, parliamentary secretary and their offices did not provide feedback on individual
output groups but did provide feedback on departmental performance as a whole. Information
on ministers’, parliamentary secretary’s and their offices’ assessment can be found in Part 3 -
Ministerial and parliamentary services.
Major pieces of research and evaluation completed
One.
Number of contracts/service agreements under management
Four.
Number of service providers under management
Four.
Number of items to Minister and Parliamentary Secretary
Refer to table 3.6, Ministerial and Parliamentary Services - number of briefings,
submissions, ministerial correspondence and parliamentary questions on notice in Part 3.
See table 2.22.
Service providers deliver services to the standards agreed with FaCSIA
Centrelink’s Financial Information Service is an education and information service that helps
people make informed decisions about investment and financial issues for their current and future
financial needs. The service aims to ensure people have sufficient information to help them make
effective use of their private resources for self-support, make informed decisions about retirement
issues and have adequate financial preparation for a retirement that allows participation in their
community.
At 30 June 2006, there were 134 full-time equivalent Financial Information Service officers throughout Australia (122 full-time and 19 part-time). Between July 2005 and June 2006, officers conducted 204,474 calls and 80,741 face-to-face interviews. Over the same period 73,762 people attended seminars. The seminars are increasingly focused on assisting and encouraging preretirees to commence planning for retirement.
Review mechanisms common across most payment types for detection and control of incorrect payment, and fraud and performance outcomes for debt recovery and prosecution activity are described in Part 3, ‘Right payments to the right people’ on page 316.
In 2005–06, Centrelink’s Integrated Review System indicated an estimated 511,323 Age Pension reviews were completed. It is estimated that reductions resulted in fortnightly savings of $4,631,563, and upward variations resulted in fortnightly increases of $1,087,362 . The debts totalled $37,982,695.
Percentage of reviews and appeals where the original decision is changed
| Payment type | Authorised review officers | Social Security Appeals Tribunal | Administrative Appeals Tribunal | |||
|---|---|---|---|---|---|---|
| Reviews finalised | Percentage changed | Reviews finalised | Percentage changed | Reviews finalised | Percentage changed | |
| Age Pension | 3,545 | 36 | 879 | 34 | 186 | 15 |
See table 2.22.