Age pension changes from 2015 Budget pass Parliament

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Federal Budget 2015/16, Age pension changes, parliamentChanges to the Age Pension, from the 2015 Federal Budget, including changes to the assets test and taper rate, have passed the Parliament.

The Social Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015 has been passed by both houses of Parliament, following a deal between the Government and the Greens.

The bill implements the 2015 Budget policy to change the age pension rules, from 1 January 2017, by:

  • increasing the assets test limit for the full pensioners
  • reducing the assets test limit for part pension
  • increasing the assets test taper rate from $1.50 to $3.00

The Explanatory Memorandum to the bill says that “pensioners who lose pension entitlement on 1 January 2017 as a result of the changes will be automatically issued with a Commonwealth Seniors Health Card, or a Health Care Card (for those under age pension age), without the need to meet the usual income requirements.”

Scott Morrision, the Minister for Social Services, told the ABC the deal meant a “fairer and more sustainable pension. “170,000 pensioners will get an increase of $30 per fortnight when this comes into effect, more than 90 per cent of pensioners will either be in exactly the same position or be better off as a result of these changes and it will remove the unfairness where you have people with large amounts of assets, over $1 million in some cases, plus the family home who will no longer be receiving a part pension.”

The Labor Party announced that they would be opposing the bill, saying it would “cut the pensions of almost 330,000 low income pensioners, including 90,000 who will lose their pensions entirely.”

This was soon followed by an announcement that the Greens would support the bill, after reaching a deal with the Government to extend the Tax White Paper process. The Greens have been wanting a review of retirement incomes, but so far the only outcome of the deal has been an extension by six weeks for submission in response to the Tax Discussion Paper. The Government has reiterated the promise of no changes to super in this term and that there are no plans to change superannuation in the future.

However Greens leader Richard Di Natale is optimistic, telling ABC radio that superannuation was off the table at the moment, but the PM might have a “road to Damascus conversion” when it comes to superannuation.

“His statement – public statements – are that this Government won’t address it. As I said, who knows if he’ll be, continue to be Prime Minister. We might see under a new Coalition leadership team someone a bit more responsible and prepared to take it on,” Di Natale said.

Opposition Leader Bill Shorten said “the Greens have been conned by Mr Abbott and a million Australian’s are worse off because of this dirty deal. ”

National Seniors supported the announcement by Labor that they wouldn’t support the age pension changes, with chief executive Michael O’Neill saying “the changes as announced in the budget were poorly thought through, and, subsequently, unfair.” National Seniors had been running a social media campaign to try and delay passage of the bill.

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