Defining Moments in Australian History: Age pension introduced

By AG STAFF 30 November 2023
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1908: Legislation pledges financial support for elderly or infirm Australians.

Who should care for those unable to look after themselves? That became a hot issue after the economic depression of the early 1890s, when poverty became widespread. At that time, the elderly or infirm received no government financial support, so their care fell to family, religious and charitable institutions or government asylums.

Australia had a history of innovation around social and political rights, which included compulsory primary schooling, emergence of a strong labour movement that helped to gain shorter working hours, and the extension of universal voting rights. So, although it was certainly welcomed, it wasn’t surprising when Australia’s new Commonwealth Parliament passed The Invalid and Old-age Pensions Act 1908 on 10 June of that year.

“It is…gratifying to know that those who have grown old, and often helpless, in the industrial service of their country, will be able to pass their declining days in a fair amount of comfort,” reported Queensland’s Warwick Examiner and Times on 5 October 1908.

Before then, the quality and availability of accommodation for the elderly and infirm varied widely across the colonies. In some areas, a shortage of facilities meant the homeless were often sheltered in what were then called lunatic asylums, and the mentally ill were housed in institutions for the destitute. 

Proponents of an aged pension argued that a person had a right to live out their old age free from poverty, due to their lifetime’s contribution to the community. It was also argued the pension had to be free from the stigma of charity, and that a universal government scheme funded from general revenue was the best policy. 

Several colonies debated about providing an old-age pension, in line with similar international developments in, for example, New Zealand, Denmark and Britain.

The national importance of the subject was exemplified by the fact that the Constitution included provisions for monetary allowances. During debates at the Melbourne Constitutional Convention, no delegates disagreed with the idea of a pension, but they argued over whether the states or Commonwealth should administer it. 

However, section 51 of the Constitution gave Federal Parliament the power to legislate for invalid and old-age pensions, as well as the provision of maternity allowances, widows’ pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services, benefits to students and family allowances.

New South Wales introduced legislation in 1900. Every unmarried person in the community (unless “aboriginal, alien or Asiatic”) who was older than 60 years of age, who’d resided in NSW for a minimum of 15 years and whose income did not exceed £50 a year, was entitled to a pension of 10 shillings a week. Married couples received 15 shillings a week. Similar legislation was enacted in Victoria in 1900 and Queensland in 1908. NSW introduced an invalid pension scheme in 1908. 

And so the federal government had a rich legacy of experience to draw on when setting out a national scheme. A 1906 royal commission recommended a scheme largely based on the NSW model, recommending men over 65 and women over 60 be eligible. Their income had to be less than £52 a year and assets, such as a home, could be worth no more than £310. Residence in Australia of at least 25 years was also required. Pensioners also had to be of “good character”, which was mostly undefined, although those who’d deserted their spouse and children in the previous five years weren’t eligible. 

When the Australian Parliament passed the Invalid and Old-age Pensions Act 1908, it incorporated the royal commission’s recommendations. The delay was due to debate about funding the scheme. Negotiations led
to legislation that would allow the federal government to fund the scheme by withholding some money distributed to the states from customs and excise.

It’s important to remember the difference in life expectancy between then and now. At Federation, only four per cent of the population was older than 65.2 years. Men could expect to live 55 years, and women 59 years. The financial cost of such a scheme was small in comparison to today, when 16 per cent of the population is over 65 and both sexes can expect to live into their 80s

Age pension introduced’ forms part of the National Museum of Australia’s Defining Moments in Australian History project.