Government to axe contentious pension cuts

kevin andrews


Social Services Minister Kevin Andrews has, according to the Daily Telegraph today, privately signalled to cross bench Senators that he is prepared to cut a deal to ice the most challenging and contentious measures of the budget, the components that attack Families and Seniors benefits.  The most significant component of the deal to us could be icing of the Government’s plans to cut the Aged Pension from 2017.

Labour and the PUP have actively fought against the Government’s proposed social welfare reforms that were set to attack that aged pension and bring it down by what Labour says is up to $80 per week by 2017.  And it looks like they will win, with the Government prepared to push the short term wins through this week rather than fight a longer term battle built on the bigger picture of Australian demographic change.

The papers today suggest that the deal on the table could uphold the introduction of proposed means testing for Family Tax Benefits to $100,000 (down from $150,000) and tighter means testing for the Commonwealth Seniors Health Card to incorporate Superannuation income that is untaxed.  And there is some discussion that the axing of the Seniors Supplement of approx $876 per year could still get support too.

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But what would slip away is the proposed cuts to the Aged Pension and cuts to Family Tax Benefit Part B, including the freezing of payment levels for two years and the removal of benefits for families with children over 6 years of age.

The Abbott Government is still holding out hope the Greens may support axing the Seniors Supplement, worth up to $876 a year to around 300,000 Australian seniors.

The deal, which is likely to go before Parliament this week, will no doubt receive little attention given the haze of terrorism clouding the news feeds of major papers, potentially a good thing for the Government who was facing enormous pressure over their unsympathetic federal budget presented back in May.

It could be a big win for Seniors groups who have been fighting hard against the proposed changes to the Aged Pension which link the indexation of the Aged Pension to the consumer price index rather than to average male wages, a decision that would reportedly save the Government $449 million over four years if it was to be implemented.  They had also proposed that from 2017, asset and income test thresholds would be frozen for three years.

From September 2017, the deeming thresholds for the income test were meant to be reset to $30,000 for single pensioners and $50,000 for pensioner couples combined.

There is no detail in today’s media on whether the qualifying age for the pension will – as foreshadowed – increase to 70 by the year 2035. That measure will not affect any Australians born before July 1, 1958 and is largely ignored by a superannuation generation that doesn’t really seem to understand or care about the impact.

So we ask your thoughts on this today… Is this a big win for the Seniors and the everyday people of Australia, or a lose for the economy as we fail to scrape back enough to pay down our deficit?