Pensioners should not be worried about becoming a casualty after Budget changes are announced on May 13, according to the Switzer Super Report’s Peter Switzer and Paul Rickard. While any change is set to plummet confidence in PM Tony Abbott, as he’ll break a pre-election promise made to pensioners, these won’t be put into action any time soon.
Last week on Super TV [1], Paul Rickard gave his opinion of proposed changes. Rickard explained how the income and assets tests are “arguably too high”. He stated that the assets test does not make a significant differentiation between home owners and non-home owners, which makes the system quite biased towards the former.
Peter Switzer also suggested that other areas could be looked at, such as what can be claimed as a tax deduction for property investments. He says there is “no way” pensions will get the chop.
Rickard believes the National Commission of Audit, an independent body which reviews and reports the functions of the government, will release recommendations around the pension, and suspects Joe Hockey is behaving in a way that will react to the commission’s findings.
So what is certain about changes to the pension? Not a lot. Under changes announced by the previous Government, there will be an increase to the pension age, bringing it up to 67 – but even this change won’t be implemented until July 1, 2023.
Rickard also explained that as of January 2015, Centrelink will change the income test assessment for new ‘account based pensions,’ (or pensions regularly drawn from to provide income,) but this will not affect many people.
While recent media reports have speculated the pension age could increase to as high as 70, Rickard says this won’t happen until at least July, 2029.