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Pension shake-up to create winners and losers

A RAFT of changes to the aged pension will mean more than 230,000 part-pensioners with more assets have their pensions cut, while those with less means can expect a small boost, in next week's budget.

The budget measures will need to be legislated, and are the government's key effort to re-balance the debate after last year's pension proposals were roundly rejected by the community and the Senate.

If the changes across the gamut of aged pensioners were accepted by the Senate, they would save the government some $2.4 billion over the next four years.

While most pensioners will not be better or worse off, the measures will affect those at the top and bottom of the wealth scale, measured against their superannuation income and assets.

Couples on the pension who own their own home, and have other assets worth less than $451,500 will get a slight boost to their pension, as will those without a home, but with assets worth less than $700,000.

About 170,000 with few assets in those groups can expect up to $30 extra a fortnight, while changes to the asset test will also move about 50,000 pensioners from the part-pension to the full pension.

Those with more than $823,000 assets would see their part-pensions reduced or removed, while a further 91,000 would be unable to claim the pension at all.

Social Services Minister Scott Morrison said the changes were about ensuring those who had prepared for retirement, and could afford to go without a pension, would do so.

He said the pension was a "safety net, not a superannuation scheme" and the government's planned changes represented a compromise on last year's controversial pension cuts.

While it is understood the proposed changes will replace last year's budget changes, Mr Morrison would not be drawn on other proposals which have not passed the Senate, including a six month wait for Newstart payments for unemployed people aged under 30.

Topics:  editors picks federal budget pension pensioners



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