For several months now the media has been analysing the changes to the assets test affecting aged pensions that the federal government signalled they would introduce on 1 January 2017. The focus has been on the number of people on a part-pension who would see their pension reduced or even eliminated.
The unspoken argument appears to be that anyone on a pension deserves it – irrespective of the assets that they also own outside of the family home. The government realised that asset threshold allowed asset-rich pensioners easy access to a part-pension plus benefits. The changes made return the situation that existed in 2006.
There are however winners from the changes with the asset test lower limit for a single person rising from $209,000 to $250,000 and for a couple from $296,500 to $375,000. This moves around 100,000 part-pensioners to full pension status.
The changes that have caught the headlines are the reduction in the higher threshold for individuals to $542,500 from $793,750 and for couples to $816,000 from $1,178,500. To exacerbate the impact, the phase-out rate will reduce the pension by $3.00 per fortnight for each $1,000 over the lower threshold rather than the current $1.50 which was the rule prior to 2006.