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Federal Government’s Changes to Pension

The Federal Government’s changes to the pension assets test and taper rates will result in a mix of beneficiaries as well as older Australians who will be disadvantaged, says National Seniors.

Social Services Minister Scott Morrison announced a number of changes to the Age Pension which will be part of the federal budget. The beneficiaries from the changes include more than 170,000 part pensioners with modest assets who will benefit from an average increase of $30 a fortnight to their pension, including 50,000 part pensioners who will now qualify for a full pension.

But Morrison also announced tightened eligibility for those with higher assets which will see approximately 91,000 part pensioners no longer qualify and a further 235,000 part pensioners who will have their part pension reduced.

As part of the announcement, Morrison confirmed that the proposal to rely solely on the Consumer Price Index (CPI) for indexation changes had been scrapped. He also confirmed the family home would continue to be excluded from the assets test.

National Seniors chief executive Michael O’Neill said the announcement was a mixed bag for older Australians.

“Under this new proposal, an average increase of $30 per week for some 170,000 part pensioners will be welcomed an indexation proposal would have adversely affected 2.6 million age pensioners,’’ O’Neill said.

“A significant number of older Australians will be adversely impacted so it is critical that clear information and access to advice are a priority so they can consider their position and the adjustments they may need to undertake”. These changes will cause anxiety particularly for those older Australians who have been in receipt of a part pension for an extended period of time.

“Importantly, the family home remains excluded from the assets test and people currently eligible for the Commonwealth Seniors Health Card or Health Care Card will continue to be eligible,’’ O’Neill said.

National Seniors today released a report showing that rather than draining the economy, older Australians were putting in 1.4 times more than

the entire 2013 budget deficit.

“These changes will deliver more than a billion dollars in savings to the budget. Older Australians have every right to expect the government will deliver reforms elsewhere in the economy next week,” he said