Tens of thousands of wealthier Australian retirees will lose access to the age pension under changes targeting what Prime Minister Tony Abbott has described as "liquid assets millionaires".
Australian Prime Minister Tony Abbott. Photo: RNZ / Alexander Robertson
Social Services Minister Scott Morrison has formally dumped a controversial plan to link pension increases to inflation rather than average male weekly earnings, and will instead move to limit eligibility for the pension by changing the assets test.
The Government is targeting wealthier retirees by reducing the threshold at which the part pension cuts out.
At the moment, couples can own $A1.15 million in assets on top of their family home to qualify for the part pension.
That threshold will now be reduced to $A823,000 for couples, meaning about 91,000 people will no longer qualify for the benefit, while another 235,000 will have their pension reduced.
But the bulk of retirees will either see no changes to their pensions, or will receive a small boost.
The maximum value of assets a person can own in order to receive the full pension will be increased from $A202,000 to $A250,000 for single home owners and from $A286,500 to $A375,000 for couples who own their own home.
Mr Morrison said those changes would see more than 170,000 pensioners receive an extra $A30 a fortnight.
He emphasised that the family home would not be included in the assets test and "never will" under a Coalition government.
"The Government is seeking to ensure fairer access to a more sustainable pension. These are the only changes the Government is putting forward for the pension," he said.
"By reducing eligibility to the pension for those with more assets, they will become fully self-funded retirees.
"This means, though, we must retain the incentives through the tax system for superannuation.
"The Government does not support Labor's proposal to tax superannuants more on the income they have generated for their retirement."
He said the changes would come into effect from January 2017 and would save the budget $A2.4 billion over four years.
- ABC
