The entitlement of card-carrying boomers

What is old nowadays? Some would argue that if you are thinking about that question, chances are you’re old. But this is an old truism that no longer holds water.

This question of what it means -- and when -- to be old clearly has many levels, but the level I am interested in right now is about entitlement.

I am in receipt of a senior citizen’s card from the Victorian government that apparently entitles me to some free travel on trains and discounts at certain cinemas among other benefits that I have not explored.

I also discovered recently that I might be at some stage entitled to a Commonwealth health card if our combined taxable income, my wife and I, is below $80,000 -- excluding any income we have from our superannuation pensions.

So in terms of entitlements, I am considered old. This view of old age is outdated and not just because I am part of a generation having trouble coming to terms with ageing. 

It’s outdated because Treasurer Joe Hockey’s mantra about the end of the age of entitlement is hollow unless he means the entitlements of elderly, relatively well-off baby boomers. There is little evidence that this is what he means.

It used to be that you were old when you turned 65 and had reached pensionable age -- 60 for women -- and if you were lucky, still had a few good years left to live.

That was the reality for Australians born before the Second World War. There was no great debate about at what age they reached old age. Nor was there much debate about what old age meant in terms of entitlements.

Apart from the age pension, which was designed to keep them from penury in the few years they had left, there was not much else available to them. In the main, they did not complain and if they did, they were mostly ignored. They were not a politically powerful group.

The post-war economic boom in Australia and in much of the developed world, which lasted almost half a century despite the vagaries of the economic cycle that produced periodic recessions, fundamentally changed everything.

The post-war baby boom generation has been the major beneficiary of the long economic boom that may now have ended. That generation was the first in history to experience no depression, no major war and which for most of their lives, has lived in a reality of increasing wealth.

The economic boom created a large middle class and its increasing membership of the new post-war middle class has been one of the defining characteristic of the baby boomer generation.

This generation has benefited in all sorts of ways from the post-war boom but in particular, the post-war boom and the consequent rise in living standards means the baby boomer generation will live significantly longer than the generation that preceded it.

Unlike my father, who retired from his factory job when he was 65 and went on to the age pension, an old man in the twilight of his life, I might well live another couple of decades or more and if I am lucky, in reasonable health given the advances in medicine and the fact that I have lived my life  -- and am still living it -- with few deprivations.

If old age is a measure of how close you are to the end, then 65 is not old any more. As a result, the entitlements that come with old age should not be available to 65 year olds, and probably not even to 75 year olds.

Joe Hockey has sort of acknowledged this -- as did the previous Labor government -- by raising the possibility of lifting the pension age to 67 and further towards 70 over time.

But this is not the main game as far as entitlements are concerned right now when it comes to ageing -- but not old! --  and quite well-off baby boomers.

They have been lucky enough to live their lives during a time of unprecedented economic good times. They have managed, only in small part because of their talents and energy, to own a house, to educate children and to help children get a start in life. Most of them had job security.

Many baby boomers have managed to amass savings through superannuation -- and via generous tax concessions on super contributions and earnings -- that allows them to live pretty comfortably.

Not only aren’t they old like previous generations of 65 year olds, but on any definition, they aren’t poor and they are not ekeing out a government-funded existence as they move quickly towards death.

The fact is that in many ways, relatively well-off baby boomers like me are the greatest recipients of middle-class entitlements through superannuation tax concessions that amount to billions of dollars annually and for which there is really no justification except the fact that the baby boom generation is politically powerful.

Take this Commonwealth health card. The card, among other benefits, entitles a holder to prescription medicines at around 10 per cent of the cost to non-card holders. It can be worth thousands of dollars a year to some people.

You might have thought it was only available to old people whose only source of income was the pension and who perhaps were still earning a few dollars in part-time work. For them health costs, especially prescription medicine costs for chronic illnesses, would be extremely burdensome.

This is not the case. It is true that the health card is means tested. It is not available to people on taxable incomes over $60,000 for a single and $80,000 for a couple.

But crucially -- some would say outrageously -- superannuation pensions are not included in the income test.

This means that well-off retirement age baby boomers, in some cases with very substantial super savings that tax concessions helped them save in the first place, are eligible for the Commonwealth health card.

As long as they meet the taxable income test -- super pensions are not taxed and not included -- people like me whose real income should rule me out for a health card, can get one if and when I earn less than a taxable income of $60,000.

There was some talk recently that perhaps Joe Hockey was looking at changing the means test for the health card -- perhaps to include some portion of super pensions? -- but Tony Abbott quickly ruled that out.

Indeed, he said the income test for the card would be adjusted for inflation, something he apparently promised during the last election campaign.

In a sense, the health card issue is symbolic of the confusion and the political timidity that characterises what passes for a debate over entitlements for the ageing baby boomer generation.

Perhaps Joe Hockey is right and the so-called age of entitlement is about to end. But there are no signs that it will end any time soon for the generation lucky enough to be born post-war and whose luck shows no sign of running out.