By middle and older age, households tend to become smaller as children generally grow up and move out to establish their own homes. Older households are more likely to be lone person households due to relationship breakdowns or the death or long term illness of a partner. Many older households, those where the head of the household is 65 years and over, have low income but high net worth. This reduces their risk of economic hardship.
Both income and wealth affect people’s material standard of living. People with reserves of wealth are better able to maintain their standard of living if they have a reduction in income or substantial unexpected expenses. Wealth tends to be gradually accumulated during the working lives of household members and drawn down during retirement when income levels reduce substantially.
In 2013–14, couples in older households held an average wealth of around $1.38 million. Older lone person households held about half these wealth levels at $696,000. Older couple households held more wealth than the average Australian household ($809,900), while older lone person households held less than the average Australian household, but more than the average lone person household ($536,800). A large proportion of this wealth is as a result of home ownership with 82% of older couple households and 73% of older lone persons living in their owner occupied dwelling without a mortgage. This living arrangement reduces the living costs and supports older households to maintain their standard of living.
In comparison, the average equivalised disposable household income of older couple households ($774 per week) and older lone person households ($607 per week) was less than for all households ($998 per week). In older households, 79% of couples and 91% of lone person households had no person in the labour force. As a result, the most common main income source for older households was from government pensions and allowances (59% for couples, 76% for lone persons), followed by other income such as superannuation (29% couples, 20% lone persons).
For older households, the average weekly value of government pensions and allowances was $427 for couples and $346 for lone persons. However, households also received government benefits in kind such as health care, which on average total a value of $535 per week for older couples and $318 per week for older lone persons. This compares to $414 per week for all households.