News

NewsSome winners and some losers, but vast majority of pensioners might ask ‘What happened?’
Some winners and some losers, but vast majority of pensioners might ask ‘What happened?’

Some winners and some losers, but vast majority of pensioners might ask ‘What happened?’

Last updated by Chris Zinn on

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.

Originally posted on .

Join the conversation

FiftyUp Club
Some winners and some losers, but vast majority of pensioners might ask ‘What happened?’

Share your views with other members. 

Want to leave a comment? or .
Read our moderation policy here.
John
John from VIC commented:

Thanks Susan, who knows what changes this govt will introduce in the near future. 

Elizabeth
Elizabeth from NSW commented:

I am a self funded retireer, with an unity or allocated pension to receive a nightly income , because I was a victim of the Commonwealth F/ advisor, undergoing the royal commission at the moment, placing me in fin/ hardship, I worked very hard for my money in my working career, and I am proud to say I paid off my unit in seven years on the Nth Shore at interest rates at 9%, I was forced to work a second job to do so, now the money me mine bank is paying me 2% unable to build up the capital, to- day the people feel the govnments owns them a living, with mobiles, cars,holiday etc, Jane of NSW . . 

Joy
Joy from VIC commented:

If the CPI has been eliminated from Pension increases, how are increases going to be calculated and are pensions going to have increases to their pension on a regular basis. At the moment pensioners have two increases a year. 

Robert
Robert from NSW commented:

I am of the old school too my friend. I enjoyed your email so much, I sent it out to some of my freinds who are likewise of the old school. Pity, the current mentality is of "I want", "why should the government not pay me" and on and on. This was not the way it was but because of the constant spending on welfare by those who think they know best, the Labor so called do gooders, our beautiful country is now becoming an out of control society where nothings ends with a thanks rather it now ends what else can we get from the government. Sad, but so true. thank you again. Honesty as we all say is the best policy but I guess that only falls into a select few category. Saleries are also out of control and there seems to be no immediate slow down, hence the unfortunate departure from our country of most manufacturing products. Ciao for now, would love to here from you again. 

Suzanne
Suzanne from NSW commented:

Your comments don't give me a clue as to whether I'm a winner or will experience no change. You referred to "various tables" being "complex". Where do I find those tables? I may well fall into the lowest 4% but I have no complaints as I believe I have a very good quality of life compared with most people on the planet. To me the idea that the people in the top 6% should receive any kind of pension is an abomination. They are simply greedy!!! 

frank
frank from QLD commented:

Every one seems to think that they are the only one that worked and saved,I worked and saved,kept a single income family ,education for two plus helping the grand kids, I am not complaining ,we are not rich but we get by,with the pension,and savings.The whole idea was to save and set your self up for retirement and live as best as one can on what you have,if you qualify for a pension so be it.Don't think you have done wonders it's called looking after your self. 

audrey
audrey from NSW commented:

Thank you for this information. I have a limited income from my husband's army superannuation & a small part pension but last year I was amazed to receive a bill from the taxation dept. I own my home & have a rainy day savings account. (not thousands of dollars) I am hoping for a better outcome this financial year. Kind regards Audrey Gunness. 

raymond
raymond from NSW commented:

Come on you people(fair dinkum pensioners) let's spare a thought for the ones that were a little bit smarter than us(self funded retirees)who really must be under the pump after the latest interest rate was announced , we don't lose anything compared to them. 

Someone
Someone from NSW commented:

.. If the intention for the future is superannuation, and eventually displace State Pensions .... The trouble I see with the current way its organised , is that A ) with the downturn of the Markets (e.g) GFC Global Financial Crisis ... a holder of Super can lose $60, $80, $120 thousand (as did people I know ) and be at an age where this will never be recovered (long term) ....therefor in that way it cannot take the place of a State Pension , which although small , will never (maybe not) change during its term ( from 65-67 to say average 85) The USA share market has gone right back where it was, the Australian market has still not reached its heights.. B) Too many changes to Super... find a solution .. and keep to it....when different ideas from different Governments change the system , Im sure many older people are afraid they are going to lose their money and/or wont last thru their retirement As above try to find ways of locking it away to be used as a pension , with some intervention to lower the risks... C) I made decisions about our money 10 years ago , and we were getting returns in Cash , Deposits , of between 5-8%....( its now 3.4% ) and both of us living off the Interest . This was after many meetings with Banks and private Super advisors ,when we decided to go with the smaller return (taking in to account of loss by inflation, but also how much was being charged to look after the fund...(somewhere between 1 1/2 and 2 % which is taken whether we have a yearly gain or loss !!) ) BUT the risk of losing up to a 1/4 of our money as per our friends amounts, mentioned above was the deciding factor. Taking that into account , I was not at an age where I would be able to "get back" some of the losses by working again. 

Beverley
Beverley from NSW commented:

We currently receive a part pension and will be affected by the new asset test. Why change the limit which John Howard introduced. We also have private health insurance which increased $20 per month. if hospitalised this saves the govt plenty. I recently visited a Medicare office and it was jam packed with people claiming who knows what. Most GPs bulk bill. There is so much overseas aid. What about when we have floods or bushfires how much aid is handed out to rebuild. Don't see any overseas aid coming our way. 

Comment Guidelines