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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 .

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

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Robert
Robert from QLD commented:

ALL superannuants who own their own home and have more than $1,000,000 invested in the super scheme MUST pay at least 15% in income tax on their profits. Note that they would only pay income tax on their profits...85% of their profits would be added to their capital and their capital would remain untouched. Who has a problem with that? Perhaps Politicians and their supportive business and Union friends? and they are the ones with their snouts in our pensions. 

Nixon
Nixon from QLD commented:

I wonder if the politicians pensions are indexed on the Consumer Price index. All retired Commonwealth pensioners pensions are based on this methodology with the result that payments are reduced in real terms over time. I retired in 2005 after 29 years of service and in that short time my pension is little more that the standard pension offered to the public. If it is good enough to increase politicians pensions and that of the general pension based on increases in the average male wage then it is time the pensions increases for retired public servants be based on the latter format. After dedicated work over this extended period paying our due taxes then some equity in the system needs to be established. A totally disillusioned and angry pensioner, NC Baker 

Henry
Henry from NSW commented:

To Joseph from NSW, never a truer word. It is about time there was a self funded retiree party in Federal politics to stand up for these who have worked hard made many sacrifices and in due respect to the pensioners paid a lot more in taxes than most only to be discriminated against with every budget at least a health card, we use more medication than young people but get nothing, not having a go at pensioners but why save and not go on pension when there appears less and less value each year 

John
John from VIC commented:

People in general are greedy and some pensioners are no exception. If my goes up or down well that is the luck of the draw. It is for the benefit of the country and to ensure that there is a sustainable pension entitlement in the future. People tend to ignore this fact and only consider wifm (what's in it for me). 

Robert
Robert from NSW replied to John:

Well doe John, somebody has finally spoken. What is it with us here in Australia? everthing that the government of the day wants to do, people and or the media have a go. Just do not believe the attitude. Are we doing something for the country or are we all for ourselves? I agree with you John, well done. I wish people look at NZ and see what they have had to go through with measures if applied to Australia, every Tom, Dick and Harry has something derogatory to say about the government and the measures our government has had to take and yet, NZ'ers have copped it and in totality have accepted the measure. Hip hip hurrah for NZ and sadly for us - "keep complaining". Thanks again John. 

John
John from VIC replied to Robert:

Thanks for your words of support Robert. I could have gone on and on. I am of the "old" school where you actually worked for what you got. No fancy handouts from the Government. Avarice is abound. Start with the salaries of CEO's and higher. It is no wonder that people think the way they do. "Such is Life." 

terry
terry from NSW replied to John:

well said John- we're greedy ! Terry (Vic) 

John
John from VIC replied to terry:

Thanks Terry. There is no doubt in my mind that we have become greedy. In my reply to Robert you will see what I mean and "when do we want it" ... "now." If I had assets/income of over a million$ I don't think I would be overly concerned with maybe losing a bit of pension or even all of it. All the best. 

Rosita
Rosita from NSW commented:

Rosita Cook from Sydney: If this changes will go ahead where is the incentive's! to save for our retirement?. Most people work hard till their sixties & seventies, why they have to continue working hard to pay for the mistakes and irresponsibility of the Politicians (Labour Party). retirement and now the Goverment want take away!. 

Joseph
Joseph from NSW commented:

I believe that we paid our taxes to be looked after when we retire, yet if you're a bludger, never paid tax, know how to put your hand out for money from the government, then you are rewarded for being lazy. Taxes are to be used for only a few thing like education, protection and the old. Now for the concession card, don't the old get sick? So why are self funded retireses not eligible while all others can enjoy what our taxes pay for? Medication are more expensive for self funded than others on pension. Why is all this discrimination against self funded when they had to put up without a lot of things to save. I feel the government wants this country of ours to compare with third world countries and not enjoy the last years of your life. If the government is thinking that there will be fewer people paying tax then it should start thinking of bringing back industries so that the young can start their working life. Australia should take a leaf out of other countries where the pensioner is rewarded for doing their bit for the country by giving them the pension and cut the unemployment benefits if a person refuses a job offer just because of distance, I took a job with a company that was just 4km from my home but after a while the company moved and as I wanted a job I moved a travelling distance 45km, I did not refuse and claim and just go to the beach. This is the life pensioners had to put up with. Thank you. 

Gavin
Gavin from VIC commented:

I am very unhappy with the changers to the pension. I have programmed my life 5 years ago and have used my super to get me to where I am now. I am about to go onto part pension, but if this change goes through I will be ineligible. This will leave me in a very bad situation. It is very difficult to set up your finances with the constant changes made by this Government. They have spent all the money they have stolen from the works and the only ones, which were the smart ones, who have some money put away to sustain their lives are the pensions. Now they want there money as they are an easy take. The bludgers in this world continually dip into the public purse and return nothing to the community. I am sick of it and will not be voting for this Government in the future. 

Christine
Christine from QLD commented:

With all the push to get older people to stay in the work force longer has no one given thought to helping people already on a pension return to one or two days a week of work while still retaining their pension benefits. At present you are penalised by the government for working above a very small wage. This would help stimulate the economy and give those seniors who would like to work a fair go. It is a similar story for those on a Disability Support pension. When politicians "retire" from politics they can still work and receive a very generous pension and entitlements. Not a very fair playground is it? 

frank
frank from QLD replied to Christine:

Yes ,the push for us to work longer is on ,but their is no work. I was fortunate to work 3 days a week till I was 74, but not every one can do that. I was an electrical project manager on major construction helped no end. 

frank
frank from QLD commented:

A varied lot of comments, how ever Robert you are well astray,in 1942/3 a fund was set up were a portion if tax was invested to fund the pension.It amassed a Hugh amount of money,only to put back to public revenue by Menzies with no opposition from Cauldwell.The government spent Millions of pounds of tax payer money.This info is available for all to read on Google search.act of 1942 re:pensions.This move by Morrison is on the track to help the budget over all. so live with it people 

moya
moya from NSW commented:

A sum of $1.000.000 in assets is not rich. At 3% interest (if you are lucky) that's an annual income of $30,000. Drawing down on assets for living expenses it won't be long before many people will be forced onto the Pension Queue. More pensioners in the future. 

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