Last September the federal government announced changes to social security legislation which, incredibly, has left many aged pensioners considerably worse off. There are also fears that many pensioners are at risk of criminal prosecution because of misinformation, confusion and exasperation about the Centrelink reporting rules that were introduced with the amended legislation.

Initially it was widely believed that, as a result of the amendments, the amount an aged penioner would be able to earn would be increased by up to 50%. It was explained that under the new “Work Bonus” scheme, pensioners, whether single or in a partnership, would be able to earn about $300 a fortnight without loss of any pension.

It was further explained that those who earned more than this amount would have their pensions reduced, at the rate of 50 cents in the dollar, for every dollar earned in excess of the $300 limit. Fair enough.

But the Combined Pensioners and Superannuants Association (CPSA) was quick to point out that while the amended legislation does improve the lot of pensioners who are lucky enough to have a regular job, it severely penalises those who are only able to get seasonal work.

For example, under the current rules a pensioner who earns, say $2500, for a one-off fortnight’s engagement as Santa, will lose all of his pension for the corresponding period, even though he was unable to get other work during the year. Furthermore, if he is married, his wife will also forfeit her pension for the same period, even if she didn’t work. This is because under the new rules, the pension cuts out if a pensioner couple earns more than $2415.20 a fortnight.

Yet CPSA’s policy director Charmaine Crowe advises that under the previous rules, single pensioners were each able to earn $3588 a year before forfeiting any pension. This was irrespective of whether that proscribed amount was earned as a result of a regular job or one or more casual engagements. Under the previous rules a pensioner couple was able to earn up to $6400 a year without forfeiting any pension.

For the past 15 months the CPSA has been campaigning for the re-introduction of rules that allow pensioners to earn a certain, proscribed amount, before pensions are docked.

Crowe complains that the current rules were introduced with virtually no community consultation.
That lack of consultation — and the belated realisation that the new rules would penalise seasonal workers — provoked so much pensioner outrage, it is believed to have resulted in Julia Gillard’s pre-election commitment to amend the current rules from July 1 next year.

Crowe explains that under the proposed Gillard amendments, pensioners, whether single or living in a partnership, will each be able to earn up to $6500 a year without loss of pension. But the catch is that this entitlement will have to be built up over 12 months, at the rate of $250 a fortnight. In other words, pensioners will not be able to take advantage of the amended rules until July 2012.

By then, many will be into their seventies and are likely to find it difficult to get any kind of work. In the interim they will continue to risk losing all, or at least part, of their pensions if they earn more than $300 a fortnight — even once a year.

Most seasonal jobs, including  as Santa, involve long hours and weekends. Yet Crowe reports that as a result of age-discrimination in the workplace, hard-up pensioners consider themselves extremely fortunate to land even the odd casual engagement.

Even so, this year, as was the case last year, thousands of pensioners again will forfeit a fortnight’s pension (or perhaps two) as a result of a brief, one-off seasonal engagement. And this is set to continue until 2012.

So how much has the government saved in pension payments as a result of the recent tinkering with the legislation? Perhaps the opposition may be able to glean this information, but Crikey is still awaiting Centrelink’s response to repeated requests for information about the number of Australian aged pensioners employed on a regular basis and the number  engaged on a seasonal basis.

Meanwhile, Crowe is concerned about the ramifications of the Centrelink reporting rules that were introduced in tandem with the amended legislation. Those regulations include the rule that aged pensioners must contact Centrelink within 14 days of starting any job so that their pensions can be docked if necessary.

But after completing a casual assignment many pensioners have to wait for up to three weeks or more to be paid. So rather than risk the forfeiture of their pension, some are tempted to delay reporting until they receive their earnings.

A pensioner who gets work each year helping to administer university exams, told Crikey that he never contacts Centrelink until he actually receives his pay. He explains this is because his hourly rate varies, so he’s never certain about his exact gross fortnightly earnings until he receives his pay advice. He said if he constantly phoned the uni’s pay office seeking this information, he might end up being considered more trouble than he’s worth.

He also insisted that he has found Centrelink staff understanding of his predicament. “No worries,” he says. If you’re late reporting, they raise a debt against you. You’re allowed to pay it off in instalments, at the rate of about $50 a fortnight. That’s much better than losing a whole fortnight’s pension in one hit.”

Yet an alarmed Crowe warns out that Centrelink provides customers with information sheets that make it plain that it expects its rules to be strictly observed and that non-compliance can lead to the cessation of payments and prosecution.

It’s never a good idea to incur a Centrelink debt, she warns. It’s proof that you have been in breach of social security legislation. Perhaps unwittingly, but the onus is on you to observe the rules.