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.
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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.