Published online by Cambridge University Press: 01 January 2023
It has long been accepted that the adequacy of payments is a key objective of any social security system, where adequacy is defined as the ability of a payment to support a basic acceptable standard of living that is consistent with prevailing community standards. The 2009 Harmer Pension Review directed attention to the adequacy of the pension, an issue that has not been systematically examined in Australia for several decades. This article reviews alternative definitions of adequacy and shows that its basic features have been consistently recognised in official reports conducted over a long period. The deprivation approach is then described and shown to produce estimates that have a direct bearing on this conception of income adequacy. Using the results from two recent surveys, conducted in 2006 and 2010, the article compares levels of deprivation among groups defined on the basis of their principal source of income, including those dependent on an Age Pension and several other forms of social security payment. The results indicate that the adequacy of the Age Pension in 2006 was above that of payments awarded on the basis of disability, unemployment or sole parenthood, and also that the pension increase awarded following the Pension Review reduced deprivation among those who received it. However, the increase was not well targeted to those groups who required further assistance, as indicated by the levels of deprivation they were facing. Further application of the deprivation approach would provide new insights into the nature and extent of existing income inadequacies.