Age Pension Changes - Good and Bad
Information gathered from BT Financial website on "Federal Budget 2015/2016"
The budget papers contained significant changes to the aged pension assets test that will come into effect on 1 January 2017.
Under the proposed changes, the value of assets you can have in addition to the family home to qualify for the full pension will increase significantly. However, the taper rate will increase from the current $1.50 per fortnight per $1,000 of assets over the lower threshold to $3.00 per $1,000 of assets. The government estimates this will mean 91,000 people will stop having access to part pensions and a further 235,000 people will have their part pensions decreased.
As a sweetener to those who will lose their pension, the government will guarantee eligibility for the Commonwealth Seniors Health Card (CSHC), which provides the same concessional access to pharmaceuticals as those on the pension.
The government also said it will scrap the proposal announced in last year’s budget to index pension solely to CPI increases. As such pensions will continue to be indexed by the greater of CPI and the Pensioner and Beneficiary Living Cost Index plus benchmarked to a percentage of Male Total Average Weekly Earnings.