POVERTY AND PENSIONS

Abstract

AbstractIt has been argued that it is impossible to measure poverty among elderly people because pension levels and poverty lines are so similar. Whether poverty among them appears to be high or low may depend upon an arbitrary decision as to whether the poverty line should be a dollar a week above or below the age pension. This paper analyses poverty among elderly people suggesting that it can be measured by the number who live below an after‐housing cost poverty line. That is, their poverty should be measured after they have paid for their housing. This procedure not only avoids some of the measurement problems, it also provides a more realistic test of the level of poverty in Australia than other techniques. It takes into account not only the incomes of families but also their ownership of the main form of household wealth — the family home.In general when poverty is measured in this way its incidence is much lower among elderly people than others. An important reason is the widespread ownership of homes among the elderly which reduces their housing outlays. Among a minority of the elderly, the private‐sector renters, the incidence of after‐housing poverty is however very high.