Budget 2015: Pensioners
Asset test changes
Date of effect: From 1 January 2017
As previously announced, the Government will increase the asset test thresholds and the withdrawal rate at which pensions are reduced once the threshold is exceeded.
The taper rate will revert back to the pre 2007 level of $3 (from $1.50).
The maximum value of assets you can hold to qualify for a part pension will also be reduced. Approximately 91,000 current part pensioners will no longer qualify for the pension and a further 235,000 will have their part pension reduced.
Pensioners who lose pension entitlement on 1 January 2017 as a result of these changes will automatically be issued with a Commonwealth Seniors Health Card or a Health Care Card for those under Age Pension age.
For pensioners with modest assets, the change will increase their pensions.
The value of assets you can have in addition to your family home in order to qualify for a full pension will increase from $202,000 to $250,000 for single home owners and from $286,500 to $375,000 for couple home owners.
Pensioners who do not own their own home will also benefit by an increase in their threshold to $200,000 more than homeowner pensioners. This increases the gap between homeowners and non-homeowners thresholds by more than a third, recognising their higher living costs.
All couples who own their own home with additional assets of less than $451,500 will get a higher pension. Couples who don’t own their own home and have asset holdings up to $699,000 in January 2017 will be better off. For singles the maximum threshold point, below which pensioners will be better off, will be $289,500 for home owners and $537,000 for non-homeowners.
READ MORE
> Media release – Fairer access to a more sustainable pension
SOURCE: Knowledge Shop
To discuss how this may impact your circumstances please contact PPT on (03) 5331 3711.
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
