Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-10T14:03:00.905Z Has data issue: false hasContentIssue false
  • English
  • Français

Pension Adequacy and the Pension Review

Published online by Cambridge University Press:  01 January 2023

Peter Saunders  and
Melissa Wong
Peter Saunders
Affiliation:
Social Policy Research Centre, The University of New South Wales
Melissa Wong
Affiliation:
Social Policy Research Centre, The University of New South Wales
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

It has long been accepted that the adequacy of payments is a key objective of any social security system, where adequacy is defined as the ability of a payment to support a basic acceptable standard of living that is consistent with prevailing community standards. The 2009 Harmer Pension Review directed attention to the adequacy of the pension, an issue that has not been systematically examined in Australia for several decades. This article reviews alternative definitions of adequacy and shows that its basic features have been consistently recognised in official reports conducted over a long period. The deprivation approach is then described and shown to produce estimates that have a direct bearing on this conception of income adequacy. Using the results from two recent surveys, conducted in 2006 and 2010, the article compares levels of deprivation among groups defined on the basis of their principal source of income, including those dependent on an Age Pension and several other forms of social security payment. The results indicate that the adequacy of the Age Pension in 2006 was above that of payments awarded on the basis of disability, unemployment or sole parenthood, and also that the pension increase awarded following the Pension Review reduced deprivation among those who received it. However, the increase was not well targeted to those groups who required further assistance, as indicated by the levels of deprivation they were facing. Further application of the deprivation approach would provide new insights into the nature and extent of existing income inadequacies.

Keywords

H2H5I2Pension reviewadequacydeprivation
Type
Symposium
Information
The Economic and Labour Relations Review , Volume 22 , Issue 3: Australia's Transfer and Tax System Under Review , November 2011 , pp. 7 - 26
Copyright
Copyright © The Author(s) 2011

References

Australian Council of Social Service (ACOSS) (2010) Poverty Report: October 2010, ACOSS, Sydney.Google Scholar
Berthoud, R., Bryan, M. (2008) ‘Deprivation indicators’ in Berthoud, R., Zantomio, F. (eds) Measuring Poverty: Seven Key Issues, Institute for Economic and Social Research, University of Essex, Colchester, pp. 14–15.Google Scholar
Bray, J. R. (2001) Hardship in Australia: An Analysis of Financial Stress Indicators in the 1998–99 Australian Bureau of Statistics Household Expenditure Survey, Occasional Paper No. 4, Department of Family and Community Services, Canberra.Google Scholar
Brewer, M., Muriel, A., Phillips, D., Sibieta, L. (2008) Poverty and Inequality in the UK: 2008, Institute for Fiscal Studies, London.Google Scholar
Gordon, D. (2006) ‘The concept and measurement of poverty’ in Pantazis, C., Gordon, D., Levitas, R. (eds) Poverty and Social Exclusion in Britain: The Millennium Survey, Policy Press, Bristol, pp. 29–69.Google Scholar
Guio, A-C. (2005) ‘Material deprivation in the EU’, Statistics in Focus 05/2005, Eurostat, Brussels.Google Scholar
Harmer, J. (2008) Pension Review. Background Paper, Department of Families, Housing, Community Services and Indigenous Affairs, Canberra.Google Scholar
Harmer, J. (2009) Pension Review Report, Department of Families, Housing, Community Services and Indigenous Affairs, Canberra.Google Scholar
Johnson, D. (1996) ‘Poverty lines and the measurement of poverty’, Australian Economic Review, 1st Quarter, pp. 110–126.CrossRefGoogle Scholar
Mack, J., Lansley, S. (1985) Poor Britain, George Allen and Unwin, London.Google Scholar
McKay, S. (2004) ‘Poverty or preference: What do “consensual deprivation indicators” really measure?’, Fiscal Studies, 25(2), pp. 201–223.CrossRefGoogle Scholar
Melbourne Institute (2010) Poverty Lines, Australia: December Quarter 2010, Melbourne Institute of Applied Economic and Social Research, University of Melbourne, Melbourne.Google Scholar
Nicolau, L. (1998) ‘Introduction: Recent poverty research and DSS — an overview of the Adequacy Project’, Social Security Journal, 1, pp. 3–8.Google Scholar
Nolan, B., Whelan, C. T. (1996) Resources, Deprivation and Poverty, Clarendon Press, Oxford.Google Scholar
Organisation for Economic Cooperation and Development (OECD) (2008) Growing Unequal? Income Distribution and Poverty in OECD Countries, OECD, Paris.Google Scholar
Pantazis, C., Gordon, D., Townsend, P. (2006) ‘The necessities of life’ in Pantazis, C., Gordon, D., Levitas, R. (eds) Poverty and Social Exclusion in Britain: The Millennium Survey, Policy Press, Bristol, pp. 89–122.CrossRefGoogle Scholar
Pech, J. (2011) Relative living standards and needs of low-paid employees: Definition and measurement, Research Report 2/2011, Fair Work Australia, Melbourne.Google Scholar
Saunders, P. (2005) The Poverty Wars: Reconnecting Research with Reality, University of New South Wales Press, Sydney.Google Scholar
Saunders, P. (2011) Down and Out: Poverty and Exclusion in Australia, Policy Press, Bristol.Google Scholar
Saunders, P., Chalmers, J., McHugh, M., Murray, C., Bittman, M., Bradbury, B. (1998) Development of Indicative Budget Standards for Australia, Policy Research Paper No. 74, Department of Social Security, Canberra.Google Scholar
Saunders, P., Naidoo, Y. (2009) ‘Poverty, deprivation and consistent poverty’, Economic Record, 85(271), pp. 417–432.CrossRefGoogle Scholar
Saunders, P., Naidoo, Y., Griffiths, M. (2007) Towards New Indicators of Disadvantage: Deprivation and Social Exclusion in Australia, Social Policy Research Centre, University of New South Wales, Sydney.Google Scholar
Saunders, P., Sutherland, K. (2006) Experiencing Poverty: The Voices of Low-Income Australians. Towards New Indicators of Disadvantage Project: Stage I: Focus Group Outcomes, Social Policy Research Centre, University of New South Wales, Sydney.Google Scholar
Saunders, P., Wong, M. (2011a) ‘Using deprivation indicators to assess the adequacy of Australian social security payments’, Journal of Poverty and Social Justice, 19(2), pp. 91–101.CrossRefGoogle Scholar
Saunders, P., Wong, M. (2011b) Measurement and change in deprivation and exclusion in Australia: A report on research in progress, paper presented to the Second Townsend Memorial Conference, University of Bristol, 22–23 January.Google Scholar
Sen, A. K. (1987) The Standard of Living, Cambridge University Press, Cambridge.CrossRefGoogle Scholar
Strategic Development Division (1995) Developing a framework for benchmarks of adequacy for social security payments, Policy Discussion Paper No. 6, Department of Social Security, Canberra.Google Scholar
Townsend, P. (1979) Poverty in the United Kingdom, Penguin Books, Harmondsworth.CrossRefGoogle Scholar
Treasury (The Henry Review) (2010) Australia’s Future Tax System: Final Report to the Treasurer, Part 2: Detailed Analysis, Vol. 1, Treasury, Canberra.Google Scholar
Van den Bosch, K. (2001) Identifying the Poor: Using Subjective and Consensual Measures, Ashgate, Aldershot.Google Scholar
Whelan, C. T., Nolan, B., Maître, B. (2008) Measuring material deprivation in the enlarged EU, Working Paper No. 249, Economic and Social Research Institute, Dublin.Google Scholar
Whiteford, P. (1985) Issues in assistance for families: Horizontal and vertical equity consideration, Social Security Review Research Paper No. 29, Department of Social Security, Canberra.Google Scholar
Wilkins, R. (2008) ‘The changing socio-demographic composition of poverty in Australia: 1982 to 2004’, Australian Journal of Social Issues, 42(4), pp. 481–501.CrossRefGoogle Scholar
Wilkins, R., Warren, D., Hahn, M., Houng, B. (2011) Families, Incomes and Jobs, Volume 6: A Statistical Report on Waves 1 to 8 of the Household, Income and Labour Dynamics in Australia Survey, Melbourne Institute of Applied Economic and Social Research, University of Melbourne, Melbourne.Google Scholar
Wilson, S., Meagher, G., Gibson, R., Denemark, D., Western, M. (2005) Australian Social Attitudes: The First Report, University of New South Wales Press, Sydney.Google Scholar