Many still at risk of pension surprises

It’s not easy to be an Australian pensioner at the best of times, but with the changes set out by
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It’s not easy to be an Australian pensioner at the best of times, but with the changes set out by the government in the 2015 budget that will take effect from 1 January there are many that could still be surprised on what they lose out on.

Superannuation companies are urging those on full and part pensions to see some financial advice leading up to the changes. The massive changes mean that about 400,000 pensioners at risk with 300,000 losing part of their pension and 100,000 losing the pension all together.

Financial planners can give you strategies to reduce your risk if it’s done early. If you leave it too long it might be too late. According to The Australian Business Review:

  • “From January 1 a single homeowner will lose the pension once they have $542,500 in assets outside their family home (down from $793,750 now) while a home-owning couple will lose their pension once their assets reach $816,000 as opposed to $1.178 million now.
  • A single non-home owner will lose their pension once their assets reach $742,500 (down from $945,250 now) while a non-home owning couple will see their pension cut out once their assets reach $1.016m (down from $1.33m now.)
  • People with part pensions with assets below those levels could also be affected by the steeper tapering rates which come into place from January 1.”

What you can do to limit the risk is slightly different to each case which is why it’s advised to speak to an expert. One of the general things that could be done is renovating the home. This will bring down the risk, however that means that the money you did have is now sunk into the renovation. Per the experts there is no reason to do it just to keep the pension.

  1. Pat  

    Governments cannot continue paying pensions to retirees who have considerable assets over and above their own home. The cut off point could be considerably reduced, but allow all pensioners the concession cards for medicines etc. Pensions were only meant to help people in need not to produce extravagant living.

    • Sharyn Cowan  

      If pensions were only meant to help people in need and not to produce extravagant lifestyle, how does that relate to politician’s pensions which are ten times what most of us receive and we the taxpayers continue to support them with lots of perks in addition to the extravagant pension they receive until they die?????? Am I being really stupid or is this grossly unfair???????

      • Eddie Randle  

        Sharyn if you are really stupid then so are a lot of people including me, LOL

    • jan  

      Perhaps the governments should lead by example. There is absolutely
      no justifiable reason for ex parliamentarians to receive a pension. 🙁

    • Phillip Worrall  

      Never mentioned that no national super Scheme was available to current pensioners.instead an implicit Guarantee of a pension at age sixty five.was given by Gov.combined with much higher personal Tax rates than current rates .An act of dishonesty, and treacherous deceit with Gov demeaning those who demand what they paid for. Like an insurance Company reneging on a policy simply by denying it ever existed.It should also be realised that Assets include furniture personal possessions,Cars, Boats, Caravans, Shares, Insurance,As well as financial assets.

  2. Guy Flavell  

    As a single, non-home owning pensioner I would be far, far better off if I had other assets
    exceeding $742,500. Invested at say 5% this would return me over $37,000 pa which is
    a great deal more than my existing OAP of $22,750 pa. I think that the changes proposed for Jan 2017 are really quite fair. I totally agree with Pat though that pensioners shouldn’t be losing their concession cards for health, etc.

  3. Tony Bahr  

    Pensions are and always were a reward for 40 years of service to the nation . Check the original legislation . Because many sacrificed and saved a bit of super they will have that used against them and have their pension reduced or stopped all together .I detect that Pensioners who have no other assets despise those that do . This allows governments to stuff around with pension rules . Pensioners need to stand together but this is not happening . And don’t believe the BS that a financial planner can get you a better outcome . They can’t .I was a financial planner for most of my working life and I can tell you that the man has now got you by the proverbials . And that only happened because pensioners don’t stand together !

    • Guy Flavell  

      “I detect that Pensioners who have no other assets despise those that do”.

      Not so, Tony … and a pretty cruel comment to make about the majority of
      our struggling elderly who have been unable, for a host of reasons, to build up
      a portfolio of assets. “Despise” NO … a smidgen of understandable envy YES,
      that they were not lucky enough in life as some others were.

      Tony, these changes ARE fair and retirees with huge assets over and above their
      own homes just cannot be maintained on the Government’s purse without sensible
      and fair regulation.

      • Grietje Young  

        If you could stop the regular periods of recession or depression which plays havoc with the stock market, and increase the bank interests rates to a reasonable level, then perhaps eaning a reasonable income, eg about $23k to $30k for a single homeowner, then perhaps an elderly person no longer able to work can be self supporting. With costs of living, such as electricity, gas, rates, insurance, food, clothing, etc going up by masdive amounts every year it gets increasingly hard, and by selling the income producing assets, the income decreases year by year. Therefore planning to be self sufficient, for 30 years, is impossible. Noone is asking a worker to sacrifice his health, or sell parts of his income producing asset ( his body) to exist. Also, noone wants to reach 85 or 90 to live in abject poverty after planning a reasonable retirement.

  4. what l find unfair is, that if pensioners are means tested like they are then why should those in government RE: Prime Minister and other parliamentarians , be ”entitled” to a life time pension and a huge wage when only serving a small amount of time in parliament. they should be means tested as well.

  5. Carole  

    I so agree with margaret, why should priministers and pollies get their full pensions and perks then? Its hypicritical! Lets face it we did more for australia than they do! We worked a dam site harder you can bet…its discrimination! ….

  6. i have a house and i owe 50 thousand to the bank and if i had 200 thousand and a house i would not need a pension

  7. [email protected]  

    My first job out of High School was at St Paul and over the next 5 years Iearned so very much. Seeing the hospital torn down tears a small piece of my heart out. The Daughters of Charity and the doctors and staff of St Paul Hospital will always be with me.M$1.

    ►►► ►►► NetJob90.Tk

  8. [email protected]  

    My first job out of High School was at St Paul and over the next 5 years Iearned so very much. Seeing the hospital torn down tears a small piece of my heart out. The Daughters of Charity and the doctors and staff of St Paul Hospital will always be with me.M$2.

    ►►► ►►► NetJob90.Tk

  9. patricia dick  

    Ok I have read all this and now want to know if you will continue to vote Liberal at next election???

  10. David Dean  

    You are so right Tony Bahr. Pensioners don’t stand together at all. This government is using superannuation against the very people that voted them into power . Now they also will be the ones crying the loudest. Pat does not understand those people paid there dues in taxes and deserve to have a good life just as she can.

  11. Jean Walker  

    I agree with Tony and David. Pensions are not a privilege. In any civilised country they are an acknowledgement of what you have contributed to the country through your lifetime. Perhaps we should have done as some other countries have and ensured that everyone who worked paid into a national insurance scheme which was set aside for the age pension and then everyone receives a guaranteed state pension which is not affected by what assets you have on top of that. So the better off pay for the not so well off during their working lifetime, but what they manage to save is not affected.

    People can’t necessarily be blamed for not having been able to accumulate a super fund BUT neither can people be blamed for being born into a situation where they could. I taught in high schools for 45 years and paid into a super fund for 30 of those. It was what you did if you were a teacher – is that my fault?

    It would be just as easy for me to say that all those who have spent their whole lifetime unemployed, should not get any pension. Would that be fair? Of course not. So don’t put the blame on those who were able to save (we can’t help the way we are born) because we paid the taxes that make it possible for pensions to be paid to those who couldn’t or wouldn’t work.

    However, the bigger issue isa government which doesn’t care about the elderly, the poor or the disadvantaged because they have no voting power. There is NO good reason they have to cut pensions other than they are too gutless to tackle proper tax reform and big business.They daren’t do that because it would lose them election contributions and votes and all any politician is interested in is being re-elected.

  12. Trevor  

    I would like to know how the Government checks the assets of the thousands of people getting the pension but now living overseas,who came here as migrants ,then returned to there original country to retire,and a lot of those countries
    the cost of living is less than Australia

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