Plans to change the way in which pensions are indexed have been dumped and replaced by a proposal which will see wealthier pensioners lose their pensions.
As noted by YourLifeChoices on Tuesday, the asset thresholds will be lowered and the pension taper rate changed. Announced by Social Services Minister Scott Morrison yesterday, the key points are as follows:
- couples who have more than $823,000 in assets, reduced from $1.15 million, (excluding family home) will lose their eligibility for the Age Pension
- for homeowners, the asset threshold for a full Age Pension for singles will rise from $202,000 to $250,000 and from $286,500 to $375,000 for couples
- couples who own their own home and have additional assets of $451,500 will receive an increased pension
- couples who don’t own their won home and have assets of up to $699,000 will receive an increased pension
- pensioners who don’t own their own home will be able to hold $200,000 more in assets than those who do
The result of the changes is that:
- 50,000 part pensioners will qualify for a full Age Pension
- 170,000 pensioners with modest assets will be about $30 per fortnight better off
- 91,000 part pensioners will no longer qualify for a pension
- 235,000 will have their part pension reduced.
Those who have been affected by the scaling back of the maximum asset threshold ($1.15 million to $823,000) will be guaranteed eligibility for the Commonwealth Seniors Health Card (CSHC) or a Health Care Card (HCC).
If this legislation is passed, the changes will take effect from 1 January 2017.