PENSIONS

Ms PORTOLESI (Hartley) (15:37): Today I rise to speak on the matter of pensions and the interface between the Italian and Australian pensions. In doing so, I acknowledge that many members of the community are struggling to cope with the increased cost of living, and this is particularly difficult for pensioners, whose fixed incomes do not cope with the rising costs of living and the CPI.

I know this from firsthand experience. My parents are aged pensioners, and I have met with many constituents, including one this morning who told me that the Australian aged pension barely covers basic expenses. It is a subject about which I have written to the federal minister many times.

Thankfully, some of our citizens who migrated to this country are able to supplement their pension by claiming another pension from their country of origin, such as Italy. INPS, the Italian equivalent of Centrelink, provides a pension payment to those who contributed to Italy throughout their working lives. The Italian government does a commendable job in supporting its senior citizens, both those residing in Italy and those living abroad. I understand that about 50,000 Italian-Australians living in Australia (obviously) receive the Italian pension, for which they are very grateful.

However, a problem has arisen for hundreds of constituents who are fortunate to receive both pensions. For recipients of the Italian pensions on very low incomes, the Italian government offers an additional pension payment. Translated, we will call it an integration payment. This integration payment is currently means tested at the level of about $9,600 per single pension. This means that if someone makes less than $A9,600 they receive the whole amount of the integration payment. If they receive an income between $9,600 and $19,202, I believe, their integration payment is likely to be reduced, and if they make more than $19,202 they receive no integration payment although they still get some pension.

Why does any of this matter? It matters because in 2000, with the introduction of the GST, the federal government introduced the Pension Basic Supplement—an additional $15.30 per fortnight, at that time, or nearly $400 a year for pensioners. I understand it is currently about $18.80 per fortnight. While it is rare to encounter a constituent who is complaining about an increase in payment, the GST supplement has ironically left many constituents financially worse off. How? The additional $400 a year payment has resulted in these constituents' income rising above the threshold cap for the Italian government and, as a result, they have lost a significant portion of their Italian pension. They also have to pay back quite a significant debt which has been accumulated.

In 2003, INPS sent letters to those who were overpaid to start paying back many years worth of overpayments. Despite the fact that it has taken the Italian government many years to notice the overpayments, it is now demanding pensioners pay back large sums of money and, in some cases, many thousands of dollars. I have been informed that about 10,000 Australians, as at February 2008, are affected by the situation.

I acknowledge that my constituents are fortunate to receive two pensions. However, in my view, they have been caught in an administrative bungle whereby a helping hand from the federal government is now causing a financial hardship. A possible solution lies in amending the definition of the payment from 'supplement' to 'allowance' which means it would not be treated as income. It is also worth noting that I am not alone in seeking the need for reform. Mr Vincenzo Papandrea, the President of COMITES and President of Patronato Inca-CGIL in Adelaide, has appealed to the Italian government in a case in which he is asking to review the pension of a client based on the claim that any payments as supplement should not be considered part of the income.

I intend to write to the federal Minister for Human Services, Senator Joe Ludwig, asking him to investigate this matter and I look forward to him looking upon this matter favourably.