The pension changes from 1st January 2015 you need to know 259



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The only constant in life is change, especially in the case of the rule book for the Age Pension!

What is changing?

The rules that deal with the treatment of incomes being paid from your super pension (i.e. account-based income stream within superannuation) are changing from 1st January 2015.

From 1st January 2015, these income streams will be placed into the category of ‘financial investments’ and treated in the same way as a bank account (i.e. with deeming), rather than with the current favourable treatment. The current treatment has meant that only a small amount of income that you draw (if any) is assessed against your Centrelink Age Pension.

However, it’s not all bad news. If you are a current age pensioner with an existing super pension product, nothing should change as ‘grandfathering’ (i.e. passing-on of existing rules) will apply. But make sure you’re happy with your current provider, as a move to a new one, will trigger a reassessment under the new rules.

So, who will be affected by the change?

People granted a pension or allowance from Centrelink after 1st January 2015, will be assessed under the new rules.

Does the change apply to the Low Income Health Care Card?

I’m afraid it could be bad news if you hold one of these cards. You will be assessed under the new rules with no concession for existing super pension products. This is likely to mean that a few existing card holders over the age of 65 will be in for a nasty surprise once their card is reassessed in 2015.

What can you do if you lose your Low Income Health Care Card?

If you are of pension age (currently 65), you can actually apply for the Commonwealth Seniors Health Card. It has a more generous income threshold, making it generally easier to qualify for the card.

What do you think about these changes to the rules? Do you expect to be affected? Share your thoughts below.


Information provided in this article is general in nature and does not constitute financial advice. Before making any decision based on this information, you should assess your own circumstances or seek advice from a financial adviser. Wally David is an Authorised Representative (318432) of Wealth Managers Pty Ltd, AFSL No. 232701. 

Wally David

Wally David is a Certified Financial Planner® with over a decade of experience in the field of financial planning. He is the founder of and regularly appears in the media to comment for news stories, TV segments and other forums.

  1. Wally…I currently receive a super income stream pension and in receipt of Low Income Health Care Card assessed under the current deeming rules. I attain the age of 65 in Sept 2015 and will be applying for part aged pension. My interpretation of the new deeming rules as per Centrelink is …’pensioners and allowees with account based income streams granted prior to Jan 2015 will continue to be assessed under existing rules unless they change product providers after Jan 2015′. In this article you write …’ If you
    are a current age pensioner with an existing super pension grandfathering will apply’. The operative wording here that confuses me is current age pensioner…in my case I am not deemed by centrelink policy as being of age pension age until 65, therefore I am a 64 year old receiving a super based pension prior to Jan 2015. Does my age as at Jan 2015 exempt me from the grandfathering rules when I apply for part aged pension in Sept 2015? Grateful for your comments.

    1 REPLY
    • My husband is in the same situation as you. Ie he is not old enough to qualify as an Age pensioner. When I asked Centrelink, I was told he would come under the new rules. Grandfathering only applies to those who are current age pensioners! As usual we are again affected by changes to super?

  2. I could have sworn I heard Tony Abbott say, prior to the election, that there would be no changes to the Aged Pension. Us baby boomers are the ones that have worked since leaving school, paid taxes all our lives, not sitting at home relying on Govt. handouts. Why penalise these people for saving for their retirement?

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    • As one who turns 65 two weeks into he new year I am affected by these changes. It is very disappointing and has the potential to be very unfair.

      1 REPLY
      • I also turn 65 mid January. My husband is on a Disability Support Pension and I am on a Carers Pension plus the Carers Allowance. Am I able to stay as a Carer or do I have to be an Aged Pensioner. I also have investments with State Super?

    • My husband wants to retire next year. He will be 67 and has worked full time since he was 15. He has never had one cent in benefits from the Govt., the changes will affect him. The changes to the health care card will affect a whole lot of people.
      Karma will strike Tony Abbott hard. He is a liar and. Dishonest in his personal life as well. Not declaring that $60,000 dodgy scholarship his mate gave his daughter was dishonest. Using the AFP to check out his daughters apartment was dishonest. We don’t pay the police to do that. The taxpayer provides a house, a nice house right on Sydney harbour, and security for him and his family. If his daughters don’t find that good enough, or convenient enough, then daddy needs to pay for security checks not us.

      1 REPLY
      • Get your husband to retire before Jan 1 to take advantage of the old laws. He is Pension age. It may be more financially viable for you.

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        • yes I agree because the day you lodge your application is the day they pay you from even though it takes several weeks to get it however you are back paid to the day of application. Good luck

    • Exactly Margaret. Personally, am sick and tired to everything being blamed on us baby boomers. Am yet to hear thanks for us who have worked for more than three quarters of our lives and paid our taxes but perish the thought that we may need a little assistance in our old age!!!
      Maybe we should all fly out to somewhere and come back on an illegal boat, would be given greater assistance then.

    • I’m just going to leave the country and live somewhere else much better on my super… I have friends and partners family in Ecuador which has the perfect climate for me in the Sierra…all modern amenities if I want but cheaper living, affordable housing cheaper rates for council water gas and electricity and internet… Sleazy creep Abbott and his cronies can shove his lies where the sun don’t shine – up his suppository of ignorance and greed….

      1 REPLY
      • hey that sounds good to me… I might look into that myself.

    • There are those in circumstances beyond their control that don’t have any savings. You can’t say we are all the same.

    • omg 530,000 pensioners affect and don’t let these Liberals con you..this is Abbott Government Policy

    • I told my friends years ago to vote for me… they asked me what I would do? I said that I would get rid of the lot of them and elect people who know about everyday life. All pollies are there for themselves and not the people. It doesn’t mater who you elect into Parliament, they are all the same. Have you listened to them in chambers??? Back biting and muck raking. Neither one of them know how to conduct themselves as to how to run a country. I saw on the news once of a woman in parliament doing a crossword puzzle while Parliament was in cession!! What are we paying them for ? Watch my lips.. there will be no GST… so what do we get?? GST. I think food should be exempt from GST. Let them live on our pension for a change and see how they like it.

      1 REPLY
    • it really has nothing to do with the lies he constantly tells but from the fact this person is a silver tail with no conscious about how the other part of Australia lives … he doesn’t care .. that most of us are living below the poverty line I am 63 single and trying to care for a 16yr old grade 11 grandchild whom I will have to support through Uni Why should this child be discriminated because I support her .. and why should she now be having second thoughts as to whether we can afford Uni education … this child has worked casual jobs since she was 14 so why should she be denied a further education

  3. There will be more bad news for Pensioners if Abbott gets his budget far it is being blocked, with the exception of our concession cards and none of us know if we will have them in 12 months time

    1 REPLY
  4. I’ll worry about it,in 4 years time! Presently self- funding myself without any Govt assistance.

    4 REPLY
    • It is a bit late to worry about it then, so I hope you have a very good financial adviser helping you.

    • Nope.. But why waste energy worrying about something I have no control over. I’ll live within my means, besides you can’t take your money with you to your grave!!

      1 REPLY
      • If you are saying you are self funded then I guess you won’t need the pension which is great for you however if you are not self funded then you only need to have some major health problems and even with private health your out of pocket costs soon put a strain on your savings, take it from someone who has had 4 surgeries this year alone with more to come.

    • So you want me to worry myself sick about my future? Tell me what can I do to improve situation for 2019? Also knew people who had heaps of Super stashed away but sadly died before 55 and left it to husband.

  5. And it is more likely to affect those poor sods that thought they were doing the right thing by putting a bit more aside for retirement. I just hope the people that voted for this mob are well represented in this group!

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    • People that have saved there money to try to look after themselves as they get older have always been penalised,the ones who drink gamble and smoke as usual are the ones who continue to complain

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      • Not eveyone who is a full age pensioner with no savings, smoked and gambled etc. Lots of unfortunate things can happen along the way.Don’t assume the worst in people. All sorts of things can mean you are left with no house to sell to get into a retirement village and have to pay commercial rent.Serves all you who voted for Tony right

      • Sorry I can’t agree with this 100% some have circumstances and they don’t drink and smoke.

    • Asked in estimates hearings by Labor senators how many Australian pensioners would be moved on to a lower part-pension as a result of the changes to the deeming rate thresholds, the ­department’s Ian Joyce said: “We estimate that 530,000 customers would have a reduction in payment.”“If Tony Abbott gets his way, the deeming thresholds used in the pension income test will be slashed from $46,600 to $30,000 for singles and from $77,400 to $50,000 for couples,” she said..

  6. We are told about these changes 18 months ago !

    2 REPLY
    • And how do you plan for that? I am a self funded retiree who pays full price and private health but the cost of everything makes my income get smaller and smaller. I have worked for 40+ years never taken any government benefits but I feel for those who did not have a chance to put super away..

    • This is Abbott Government policy Carolyn..look it could NOT have known 18 months ago because Abbott lied and said no changes to pensions and he has only been in power for 14 months

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