Wealthier retirees and those living overseas are in the firing line for the government’s proposed changes to the pension.
Adjustments to the thresholds for assets tests on the pension means that around 81,000 people on a part-pension won’t be able to receive benefits anymore, while 172,000 pensioners at the lower end of the pension will be better off.
Currently couples who own $1.15 million in assets on top of their family home qualify for the part pension. That will now be reduced to $823,000, meaning that 235,000 retirees will have their pension reduced.
“By reducing eligibility to the pension for those with more assets, they will become fully self-funded retirees,” Social Services Minister Scott Morrison says.
The maximum value of assets a person can own in order to receive the full pension will be increased from $202,000 to $250,000 for single home owners and from $286,500 to $375,000 for couples.
Those under that category will receive about $30 extra a fortnight.
It’s a move away from the previous talk of adjusting the indexation to the pension that would have seen many pensioners worse off.
Australian Greek Welfare Society CEO Voula Messimeri says she’s glad indexation hasn’t been touched.
“On the whole, Australian Greek elderly people are fully reliant on the pension, and the fact that the government has walked away from the indexation scenario that they were trying to introduce in last year’s budget is a positive thing,” she tells Neos Kosmos.
The Fair Go for Pensioners Coalition says while it’s happy to see more savings going to the neediest pensioners, the budget has unfairly penalised some pensioners who have made the decision to retire under specific circumstances.
“Remember that many people made the life-changing decision to retire based on the current eligibility and taper rates,” national chair of the Coalition Col Davies says.
Holidays overseas might be cut short thanks to pension cuts
Those living overseas and receiving benefits from either the age pension, wife pension, widow pension and disability support pension will have their benefits cut or reduced a lot sooner.
All pensioners are entitled to the full pension for the first 26 weeks of moving overseas, but now that time will be reduced to just six weeks.
The measure is predicted to affect 190,000 people over four years and reap $168.6 million for the government.
Ms Messimeri says this measure is “mean spirited” and will hit the Greek Australian community hard.
“I think that as a community we should be very concerned about that, because it was already restricted to three months (it used to be much longer) which makes it really difficult for people to go back to Greece,” she says.
“I think they should be entitled to because they’ve worked for so long and they should be able to enjoy two or three months without having to have their pension reduced in their own country of birth.”