Examining the Impact of Health and Housing on Poverty Among Older Australians

As with most OECD countries, the Australian population is ageing. It is predicted that by 2050, over 20 per cent of the Australian population will be aged 65 and over, compared to 13.4 per cent in 2010. The Australian retirement income system is heralded as an exemplar of the World Bank’s three tiers approach, with the means-tested government-funded age pension complemented by occupational pensions subsidised by taxpayers. Home ownership is also widespread among current generations of older people ('the fourth pillar’) and the government provides a range of additional supports to those in old age, including provision of health and aged care services. Existing studies indicate that Australia performs below the OECD average in terms of poverty, defined narrowly in terms of income, but these studies ignore the critical role that home ownership and health care provisions play in maintaining a decent standard of living for older people. This paper compares a range of alternative approaches to estimating poverty beyond the conventional income approach by taking account of the role of housing wealth, housing costs, health costs and health needs in affecting the poverty rates of older people – relative to general living standards and relative to the risks facing other demographic groups. Attention is focused on comparing poverty rates before and after allowing for housing and health care costs and the sensitivity of these findings to poverty line variations. The results are based on integrating reported and imputed data from two national household surveys: Wave 10 of the Household, Income and Labour Dynamics in Australia survey and the 2009-10 Survey of Income and Housing. The findings highlight the roles that home ownership, public housing provision and free access to public health services play in alleviating poverty among older Australians and point to the limitations of a narrow income approach.