Senate passes new pension rules
Just wait until people with no super but have a term deposit earning 3% find that asset can and will in many cases wipe out the entire pension for a single homeowner. Mass withdrawals of cash will occur.
The Government’s largest budget measure, the tightening of pension eligibility, has passed both houses of Parliament. The $2.4 billion savings measure passed late Monday night after a deal between the Coalition and the Greens last week.
These figures supplied by a reader and may be subject to error, one might hope!
Present: assets $500,000 term deposit @3% interest = $15,000 = $192 per week.
Present asset threshold: $202,000 – $298,000 X $1.50 per thousand = $447.00
Pension maximum single person: $783 per fortnight. $783 – less $447 = $336 per fortnight pension.
New rules: Threshold: 250,000. $250,000 X $3.00 per thousand = $750.
That means $750 deducted from a full pension of $783, leaves a pension of $33 per fortnight.
If you have the maximum allowable assets for part pension of $547,000, the above would add a further $141 to be deducted leaving a pension of minus $108.
There is no reason to keep a term deposit @ 3% when the government takes 3% away from the part pension.
Senate passes legislation to tighten pension eligibility
Under the proposal, more than 170,000 pensioners with low and modest levels of assets will have their pension increased by around $30 a fortnight.
Labor said they opposed the changes because they would reduce part pensions for 235,000 people and cut them entirely for 90,000 other pensioners with large amounts of assets.
Social Services Minister Scott Morrison said it was both a win for pension fairness and for the budget bottom line.
“This is a fairly emphatic endorsement of the Government’s policy, but also of the Government’s budget,” he said.
“The have-a-go budget is gaining real traction in the Senate.
“Some $3.5 billion worth of savings passed the Senate, not just the pension assets test change but also the seniors supplement passed.”
Greens leader Richard Di Natale said in striking the deal with the Coalition, he had managed to convince the Government to put superannuation back on the agenda.
However, Labor’s Jenny Macklin said the Greens had been “completely dubbed” as the Government had made it clear they would not change tax concessions on superannuation.