Many over-60s are eagerly awaiting the outcome of that new asset test coming into effect on January 1, 2017 to see how it will affect their pension. However, word on the street is that if you’re going to be affected a letter is being popped in the mail for you… and you’ll have it sooner than you realise.
According to a report in The Daily Telegraph, you could be one of almost 700,000 pensioners to find out sometime near Christmas if you will face cuts to your pension because of your investments.
Alan Tudge, human services minister, has revealed that those likely to be affected and those just outside of the threshold will receive a first letter in the weeks ahead.
“It will outline the new assets thresholds,” Tudge says. “In December, another letter will be sent to those impacted with specific details on how their payment will change.”
The pension is set to be cut by $3 a fortnight for every $1,000 of assets beyond the new thresholds, under the new assets test.
According to The Daily Telegraph, the asset-free area for homeowner couples is to be $375,000; single non-homeowners will have an asset-free area of $450,000; and non-homeowner couples will have an asset-free area of $575,000.
It is expected that roughly 166,000 pensioners will receive a modest increase, while the majority of Australia’s 4 million pensions will not be affected by the change at all.