Recommendations have been made for a review of eligibility for a part Age Pension.
The legislation proposing changes to indexation of the Age Pension, which could see pensioners worse off by up to $80 per week, have struggled to gain support of crossbenchers and pass the Senate. In a move that would see the legislation scrapped, the Australian Council of Social Services (ACOSS) has put forward recommendations that would, instead, focus on eligibility for a part Age Pension.
The recommendations put forward by ACOSS could achieve savings of $20 billion over a decade and would pave the way for the current indexation on pensions to remain as is. The proposals are:
- Reduce the asset test for homeowners to $100,000 for singles and $150,000 for couples. An increase in the taper rate, where pensions are reduced by $1.50 for every $1000 over the threshold, to $2 for every $1000.
- Abolish the Seniors Supplement that is paid to holders of a Commonwealth Seniors Health Card. This is one of the original proposals from the 2014/15 Federal Budget.
- Implement several reforms to the superannuation system, which include increasing the preservation age to match the Age Pension eligibility age (67) by 2027, restructuring and simplifying the tax concessions for superannuation contributions and take measures to stem income tax avoidance by those who put money through superannuation.
By shifting the focus from the expectation that those with the least should do the heavy lifting to ending welfare and tax concessions for the rich, the proposals by ACOSS are likely to please crossbenchers and the opposition alike.
Find out more about the changes proposed by ACOSS.