New pension legislation changes will save the Government $2.4 billion.
The Government’s legislation to tighten pension eligibility was passed by the House of Representatives yesterday afternoon and also passed through the Senate last night. The $2.4 billion savings measure was the Government’s largest budget item and was passed thanks to a deal being struck with the Greens last week.
The asset test changes will see 170,658 people around $15 better off each week, while 235,756 will have their pensions reduced and 91,378 will be cut fully from receiving a part Age Pension.
The changes come into effect January 2017 and Senator Glenn Lazarus expressed his concern that those banking on receiving an Age Pension may not have sufficient time to make alternative arrangements. "Don't change the pension and retirement goalposts without fair warning" he told the Senate.
In just under 18 months 235,756 people will have their pensions reduced and 91,378 will have their part Age Pensions cut fully. No matter where you sit on this issue, the implementation of this fast-tracked legislation through Parliament last night seems very hasty.
Senator Glenn Lazarus was spot on the money when he said that “Retirement is one of the biggest life changes a person can make”. Retirees have planned their current and future retirement lifestyle around the old assets tests and adjusting to the new legislation isn’t a simple overnight change for most.
There is no middle ground on these pension changes. There will be winners, and there will be losers. In the end, the biggest winner is the Government which has successfully ripped $2.4 billion out of the pension system without creating a full blown riot.
What do you think? Are the changes fair? Will these changes effect which party you vote for in the next Federal Election?
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