Aged Pension payments under new system due
The reality of the changes to the Aged Pension will kick in next week with the first payments under the new assets test system due during the week.
The payment includes December 31, which was the last day under the old system, through to January 13, 2017.
The next payment in February will be even lower as the full impact of the changes come into place.
Industry Super public affairs manager, Sarah Saunders, counsels that anyone who is on the threshold and don't have the capacity to adjust to the change, they should talk to their local MP or community organisation.
"The most important message is don't go underground and just deal with it," Ms Saunders said.
"If they are struggling, it's important they let people know so that message can filter up to government."
The Aged Pension assets test drops to $542,500 from $793,750 for singles and $816,000, from about $1.1 million, for couples, and the taper rate has doubled to $3 per $1000 a fortnight.
Ms Saunders, said about 325,000 Australians, 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," Ms Saunders said.
"The policy assumes that retirees can earn 7.8% 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."
While a variety of groups including the ANU's tax unit, Industry Super, The Committee for Sustainable Retirement Incomes and National Seniors have voiced their reservations about the new levels and assets tests.
These organisations previously suggested to government a change in the taper rate down to $2 per $1000 per fortnight, but there appeared no appetite in the government for a compromise.