The changes to the asset test to apply from 1st January, 2017 have now become law. These changes mean that more pensioners will now get the full pension, but those with a higher level of assets will now receive a reduced amount of age pension (or none).
This is because the taper rate (i.e. the amount by which the pension reduces as the value of assets increase) is now $3.00 per every $1,000 worth of assets instead of $1.50 per every $1,000 worth of assets.
For example, a couple who are home owners, currently lose some of the pension as soon as their assets are above $286,500. From 1st January 2017, they will not lose any pension until their assets are above $375,000, so they are up to $132.75 better off. However, from 1st January, 2017 instead of losing a further $1.50 off their pension for every $1,000 of assets they have above $375,000, they will lose $3.00 for every $1,000 of assets they have above this amount. (By the time their assets are $455,000 above the minimum, they will have lost all the pension).
This means many pensioners (with less assets) will get more pension, but many (with greater assets) will less or no pension.
One saving grace is that – anyone who loses their pension as a result of the “new” asset levels test on 1st January 2017, will not lose their Health Care Card.
More information is available from our office.