Pension halved by asset changes

HEAVY BLOW: Kevin Kenna looks through the government papers which show his pension will be halved in 2017.
HEAVY BLOW: Kevin Kenna looks through the government papers which show his pension will be halved in 2017.

A Mount Isa pensioner is seriously out of pocket as a result of the new pension asset test conditions introduced by the Turnbull federal government on January 1.

The threshold for the age pension asset test (which assesses all your assets except your home) has increased for a single homeowner from $200,000 to $250,000, which in theory means more people are entitled to a pension.

However the news is not so good for those with over $250,000 worth of assets as the age pension assets test taper rate has increased.

This means pension payments will reduce by $3 per fortnight for every $1000 of assets above the new assets test threshold.

For people like Mount Isa’s Kevin Kenna that represents a substantial shortfall in his pension this year.

Mr Kenna was shocked to find his pension has been halved in 2017 as a result of the government.

Mr Kenna is a part-pensioner who until the end of 2016 was entitled to $519 a fortnight.

But according to a letter he received from the Department on December 3, that payment will be slashed to $266 a fortnight in 2017.

Mr Kenna, 69, said this was unfair on people like him who have worked hard all their lives.

“My gripe is that like other pensioners I had planned out a comfortable retirement based on my pension,” Mr Kenna said.

“I abided by the rules, but now they’ve changed the rules.”

Mr Kenna said the government should have introduced the change with the change to the retirement age so current pensioners weren’t affected.

He also took issue with the fact cars were included in the asset test.

“Living in places like Mount Isa, cars are a necessity not a luxury,” he said.

Member for Kennedy Bob Katter was unavailable for comment while LNP Senator for northern Queensland Ian Macdonald acknowledged difficult circumstances but said Australia’s current pension payments were unsustainable.

“By 2025 we’ll only have 2.7 people working for every retiree, we’ve got to bring it back to a sustainable level,” Senator Macdonald said.

“Our other underlying principle is that retirement savings in super or assets are not intended to be left to family members but to support people in retirement.”

Senator Macdonald said he would speak to the relevant minister about the issue of cars in the asset test for people in rural areas.


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