If you’re a pensioner and you’ve felt worse off since the beginning of last year, you’re not imagining things. A senate hearing held yesterday revealed that more than 277,700 pensioners are being paid less as a result of changes to the assets test used to determine pension eligibility.
The test assesses an array of asset factors including property and real estate, retirement village contributions, life interests, financial and superannuation investments, income streams, business assets and funeral investments.
The Federal Government initially estimated that 236,000 pensioners would be impacted by the new test, which was implemented at the start of 2017, however, 40,000 more people than predicted are now receiving less money. According to the SBS, department officials blamed the change in the economy and increase in the value of assets.
A further 92,300 people lost access to their pension altogether, well above the estimated 90,000 who were predicted to stop receiving payments as a result of the new assets test. The government also bungled estimated figures for a review of disability support recipients. The government planned to save $62.1 million with the review of 90,000 recipients, however, of the 30,056 people who had their disability assessed, just 135 status pensions were impacted.
According to The Australian, taxpayers will end up footing the bill for the mistake, which was originally set up to save money in the long run.
It wasn’t all bad news though, with many people on the pension also benefiting from the new test. An increase in the assets test free area now means that 165,200 people are getting paid more. The Department of Social Services uses asset limits to figure out if payments will be affected, however, 47,600 people who previously qualified for part-time pension are now receiving the full pension.
Under the Government’s original proposal, the assets test threshold was cut from $1.17 million for couples (not including the family home) down to $816,000. It was estimated that single pensioners would lose their payments if they had assets worth $542,500 or more — $4,500 less than first announced by the Government in 2015.