Government’s fairer and sustainable pension budget changes secure critical Senate support

Minister for Social Services, the Hon. Scott Morrison today announced the Government has reached agreement to secure the support of the Australian Greens for the Government’s proposed 2015/16 Budget measure for a fairer and sustainable pension through changes to the Pension Assets Test that will deliver budget savings of $2.434 billion over the forward estimates.

“Support for the single largest savings measure in this year’s Budget, following passage of the Government’s cornerstone small business measures, demonstrates the Abbott Government is successfully getting on with the job of implementing our ‘have a go’ Budget,” Minister Morrison said.

“The measure will rebalance the Pension Assets Test parameters by increasing the assets test free areas to support pensioners with low levels of assets and increase the taper rate by which a pension is reduced, once the free areas are exceeded.

“As a result of these changes it is estimated more than 170,000 pensioners with low and modest levels of assets will have their pension increased by around $30 a fortnight from January 2017, when these changes take effect.

“Those who lose access to the part pension as a result of the increase in the taper rate, to the settings that were in place prior to 2007, will be guaranteed access to the Commonwealth Seniors Health Card.

“This measure replaces the Government’s previous measure to limit indexation of all pension related payments to CPI that was contained in the 2014/15 Budget.

“At the same time, the Government will extend the submission period for the Tax White Paper process to 24th July 2015. This will facilitate interested parties putting their views to the Government on issues relating to retirement incomes,” Minister Morrison said.

“Incorporating this additional consultation in the Tax White Paper process falls within the original scope of the Tax White Paper,” Minister Morrison said.

“Details regarding the extension of the submission period for the Tax White Paper will be announced separately by the Treasurer.

“I commend the Australian Greens, and their new Leader Senator Di Natale, supported by Senator Siewert, for their constructive engagement with the Government on this measure.

“I also express the Government’s appreciation to Senators Xenophon and Leyonhjelm along with key stakeholders, in particular COTA and ACOSS, for their contribution during the consultative phase.

“The measure will be considered in the Senate after passing the House of Representatives at the earliest opportunity,” Minister Morrison said.