Pension changes start to make dollars and sense
OLDER Australians are this week understanding what the government's pension changes actually mean for them.
This week's pension payments will cover the period from December 31 to January 13.
On January 1, the Age Pension assets test limit dropped to $542,500 (from $793,750) for singles, and $816,000 (from approximately $1.1 million) for couples; and the taper rate doubled to $3 per $1000 a fortnight.
Around 325,000, mostly low to middle-income people, are immediately worse off. Industry Super Australia modelling predicts that in ten years 50% of new retirees will be adversely affected.
Industry Super public affairs manager, Sarah Saunders, said: "The policy assumes that retirees can earn 7.8 per cent on the top portion of their savings.
"This is unrealistic in a low interest environment".
"If someone with modest savings on the assets test threshold ends up living off less than the full Age Pension, there is no incentive to save," she said. "Faced with sudden changes to retirement income policy, Australians working to long-established plans can be forgiven for feeling under attack".
"Older Australians who, later in the year, find themselves struggling as a result of the changes must let their families, local MPs or community organisations know," she said.
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