Pension cuts for wealthy
Changes to the pension assets tests to be revealed today will result in about 326,000 wealthier retirees having their payments docked or losing them altogether.
But 170,000 seniors with more modest assets will be better off.
Social Services Minister Scott Morrison will today announce the long-awaited revamp of the assets test and officially dump unpopular plans to slow down the growth in pension increases.
"More than 90 per cent or 3.7 million pensioners and other Australians who receive pension-linked payments will either be better off or have no change to their arrangements under these new proposals," Mr Morrison said last night.
The changes to the asset test will save $2.4 billion and come into effect from January 2017.
The Government will increase the thresholds for the value of a pensioner's assets (excluding the family home) before their payment is reduced.
For example, all couples who own their home with additional assets of less than $451,500 will get a higher pension. Singles who own their home will be able to have up to $289,500 in extra assets and still be better off.
Non-homeowners will be better off if their assets are less than $699,000 for couples and $537,000 for singles.
The changes will mean 170,000 pensioners will have their payments increased by an average $30 a fortnight, with 50,000 to now qualify for a full pension.
But wealthier retirees will have their pension cut when the Government reduces the maximum value of assets they can hold to qualify for a part pension.
Couples can now have $1.15 million in assets on top of the family home and still claim a part-pension but this will be reduced to $823,000.
Single homeowners will have their maximum threshold reduced from $775,500 to $547,000.
For non-homeowners the maximum threshold for couples will be reduced from $1.29 million to $1.023 million and for singles from $922,000 to $747,000.
The Government will achieve this by restoring the pension taper rate to $3, reversing the Howard government's 2007 changes that halved the taper rate to $1.50.
The Government is assuring all those affected by the winding back of the asset test that they will be eligible for the Commonwealth Health Seniors Card or Health Care Card so they can still pay concessional prices for medicine.
