Some winners and some losers, but vast majority of pensioners might ask ‘What happened?’
Us over 50s may feel overlooked on occasions but pensioners are at the very heart and soul of next week’s Budget. 
Controversial plans for changes to pensions including indexing, taper rates, assets tests and proposals to raid healthy superannuation balances have dominated the run-up to Tuesday night.
On Thursday the government unveiled its changes to the eligibility criteria for the pension which saw the better-off lose access to the part pension, and an increase in the pension for others.
In our pre-Budget survey, answered by a record 13,000 of you, an overwhelming majority or 74% rejected proposed changes to tighten the assets tests for pensions agreeing ‘these people are not necessarily well-off’.
Contrast that to last year, when we asked if a couple with a family home and $1 million in other assets should get a part-pension, and 71% of you said “no”.
On the plus side under the new government plan some 50,000 on low to middle-incomes, who were on the part-pension, will now be eligible for the full pension.
And those who don’t own their home will be allowed more assets before they lose access to the pension.
You might have done the sums by now in the great pensions reshuffle to see if you fall into the winners or losers basket, although looking at the various tables be warned; it can be complex.
In general terms, and relying on the figures in Thursday’s Daily Telegraph, of the four million-strong pensioner population the ‘losers’ include:
- 90,000 or two percent of pensioners with assets of more than $823,000, apart from their homes, will say goodbye to all of their part-pension .
- 236,000 or six percent of the group, which have considerable assets, will have their part pensions reduced.
The ‘winners’, whose pensions will increase, are listed as 172,000 or 4%:
- In all about 500,000 pensioners will find their incomes changed up and down, which is 12%
- 88% or 3.5 million will not be affected by any of these changes
Yes, for all the hullabaloo the vast majority will see no difference up or down.
However the big news, which ironically produces the smallest difference in dollars to ALL pensioners in the short-term but the largest in the long-term, is the end to plans around the indexing of pensions.
It was a very unpopular Budget measure from last year to limit pension increases to the Consumer Price Index (CPI), which would reduce payments in real terms over time. It’s now bitten the dust.
Now the detail is out and the Budget fact and fiction can be separated, the real debate will begin. And as ever we welcome your perceptive and provocative comments.
