The federal government is considering dumping unpopular changes to pension indexation in favour of a tighter test on assets.
Social Services Minister Scott Morrison has all but confirmed that tighter rules on how much assets senior Australians can own and still qualify for a part pension will be announced in next week's budget.
The measure will replace last year's unpopular budget plan to adjust the way pension increases are indexed.
While not specifically confirming that a tighter assets test will be in the budget, Mr Morrison said there was nothing "greatly surprising" about reports of likely changes because the government had been openly discussing options.
"I've been consulting widely with stakeholders and crossbenchers and backbenchers within the government," he told reporters in Canberra on Tuesday.
"For something to come off the table, like indexation, something has to go on."
The tipped changes will not change the test-free status of the family home, leaving most pensioners unaffected.
But a lower other-assets test threshold will trim the part-pension for an estimated 200,000 seniors.
Mr Morrison said a decision in 2007 to halve the taper rate, which reduces the pension for those with high-value assets, had added $1 billion a year to the welfare budget.
A couple now can own $1.15 million in non-family home assets and a single person $775,500 and still qualify for a part pension.
Opposition Leader Bill Shorten flagged Labor's support for the measure, but wants to see the detail.
"Labor has been up for a sensible discussion about means testing," he said.
Mr Morrison has yet to discuss the changes with the Greens but noted the minor party had opposed cutting the taper rate in 2007.
He reiterated the government's pledge not to make any changes to pensions or superannuation before the next federal election, likely in late 2016.
Assets test for the aged pension
To qualify for the full pension:
Singles who own a home can have other assets totalling $202,000.
Singles with no own house $348,500.
Couples who own a home $286,500.
Couples with no own house $433,000.
To qualify for a part pension:
Singles who own a home can have other assets totalling $775,500.
Singles with no own house $922,000.
Couples who own a home $1.15 million.
Couples with no own house $1.29 million
What counts as an asset:
All real estate other than the family home, financial investments, superannuation, cars, boats, caravans, household contents, fishing licenses, trading and/or hobby collections
Pensioners lose $1.50 a fortnight for every $1000 of assets owned above the threshold (halved from $3 a fortnight in 2007)
(Source: Australian Government)