- Interactive: How Australia's pension system works
- Government warned of budget blackhole as pensioners prepare to dodge cuts
- Read our full coverage of Budget 2015-16
Social Services Minister Scott Morrison has unveiled major changes to the pension, which will impact on hundreds of thousands of Australians.
Mr Morrison said previous measures would be axed to make way for the new proposals, which aim to save $2.4 billion in the forward estimates.
Speaking to media on Thursday, Mr Morrison said that more than 3.7 million pensioners and other Australians who have pension-linked benefits will either be “better off or will have no change” to their pension arrangements under the proposals.
The changes, which would come into effect from January 2017, would mean:
- Around 170,000 pensioners with modest assets would have their pensions increased by an average of around $30 per fortnight (including those on a part pension)
- Around 91,000 current part pensioners will no longer qualify for the part and a further 235,000 will have their part pension reduced
- To qualify for a full pension, the assets free area will increase to $250,000 for single home owners and $375,000 for couples
- Part pensioners owning their own home will have their maximum threshold reduced to $823,000 and $547,000 for couples and singles respectively
Mr Morrison said the changes would be the only ones proposed for the pension and arrangements for the family home would not be altered.
“The family home will not be included in the assets test and never will under a Coalition Government,” he said.
“…Not only are there great difficulties technically in being able to implement such a policy, but equally, the family home provides stability for millions upon millions of Australians.”
Mr Morrison thanked the more than 90,000 pensioners who may be losing access to payments.
“They are in a position, in the worst case scenario, to draw down on the assets they have,” he said.
“… The whole point of providing taxpayer funded incentives through the tax system for superannuation is that people draw down on that in their retirement. It is not intended to be a taxpayer underwritten bequest program.”
Mr Morrison said Veterans’ Affairs Minister Michael Ronaldson would be announcing the axing of last year's measure, meaning reversals to indexation would also apply to service pensions, veterans and other related pensions.
Read how the changes will impact homeowers below.
Read how the changes will impact non-homeowers below.
