Disability Pension Indexation

20 Sep 2011


The Federal Government has stated it understands the impact of rising costs of living and the importance of ensuring that entitlements do not erode in value. It says it is committed to making sure that our disabled war veterans have their pensions adjusted to take account of “not just the cost of living but also the standard of living”.

The Harmer Review of Pensions (2009) confirmed that at certain times, the rate of change in out of pocket living costs experienced by age pensioner households has moved faster than the rate of change in living costs of households as measured by the CPI.

In 2007 the Parliament recognised this in relation to Veteran Disability Pensioners and provided a “one off” catch up increase and also brought their indexation arrangements into line with the other pensions.

This “one off” increase did not fully recover the erosion suffered by Veteran Disability Pensioners particularly in the previous 10 years when revised indexation arrangements were introduced for Age and Service Pensions.

Changes to the Age Pension announced in the 2009/2010 budget were designed to address particular concerns for our most disadvantaged elderly community members and these have our support.

The exclusion of the Veterans Disability Pensions from the 2009/10 Budget initiative, further accentuated the existing disparity for Veterans Disability Pensioners who have suffered a disability as a result of their service to the Nation and has meant that the relative value of Veterans Disability Pensions measured against the other pensions has diminished.

Proposal: That the Government remove the remaining level of erosion to the value of Veterans Disability Pensions by adjusting Veterans Disability Pensions (including general rate, EDA, intermediate rate, temporary special rate and special rate) to recover the loss in parity relative to that of the Age and the Service Pensions that was made in 2009. This structural adjustment is necessary for DVA Disability Pensions to remain relevant to further increases in Australian community wage/income levels as recommended by the Harmer Review.