Australia's aged population have been targeted by the Abbott Government’s second budget, with more than 91,000 part pensioners expected to have their payments axed.
The measure is expected to save the government $2.4 billion over five years.
While the majority of measures had been announced prior to the budget, Treasurer Joe Hockey still heralded the measures as essential in maintaining Australia’s “critically important safety net”.
“As our population ages, we need to ensure the pension is sustainable and affordable,” he said.
“These measures are all intended to provide security and certainty for older Australians in the years ahead.”
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Mr Hockey also pledged that there would be “no new taxes on superannuation” under the Coalition Government, and has tightened the loophole allowing public servants to double dip after retirement.
Budget documents showed the changes to the pension, 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
The taper rate has also increased to $3, meaning that for every $1000 of assets over the asset free threshold, the pension rate will reduce by $3 a fortnight.
The government has also dumped its unpopular proposed changes to pension indexation in favour of a tighter test on assets, which will not include the family home.
Millions cut from aged care
Budget documents also show more than $26 million in cuts to aged care funding.
A total of $26.2 million is expected to be saved over five years through changes to the means testing arrangement from January 1, 2016.
More than $20 million will also be cut from the Dementia and Aged Care Services Fund over four years.
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