Cuts to hurt Bendigo part-pensioners

Federal Member for Bendigo, Lisa Chesters said today that hundreds of Bendigo and central Victorian part-pensioners will lose out as a result of the Liberal Government’s unfair pension cuts. 

“Tony Abbott and Scott Morrison want to cut the pensions of almost 330,000 low income pensioners - 90,000 of whom will lose their pensions entirely. 

“There are 10,560 full pensioners and 7,900 part-pensioners in the Bendigo electorate. 

“At this stage it’s unclear exactly how many in the Bendigo electorate will be affected by the changes. 

“The Government is saying 90% of current pensioners will see no change in their pension income as a result of the change. But, as we know from experience, you just can’t trust the Government’s word. 

“What is clear is that some single pensioners will lose more than $8,000 a year – a quarter of their yearly income of $36,000 – and some couples will be $14,000 a year worse off. 

“Since this debate started in Parliament, I have received many distressed letters, emails and phone calls from part-pensioners who are deeply concerned about the impact these cuts will have on their household income. 

“These are not rich people. They are not on high retirement incomes. They are retired teachers, social workers, ambos and tradies. These people have worked and saved hard their whole life. They deserve dignity and respect in their retirement. 

“What many may not know is what is included when it comes to the pension asset test. It includes many assets that you don’t earn an income from like your car, household furniture and even licences such as a fishing licence.” 

Ms Chesters said affected part-pensioners may have to sell assets or give up recreational pastimes in order to stay below the proposed much lower asset test. 

“It’s just not fair. It’s no secret to anyone that people on the full pension are struggling, with many of them living in poverty. Now the Liberal Government is going to force part-pensioners into poverty. 

“Labor has carefully considered the proposal and it is clear the Government has not been upfront about the potential impact of these cuts,” said Ms Chesters. 

Independent analysis shows the cuts will affect half of all new retirees within ten years. More than one million retirees will be affected, including the 700,000 Australians who will retire in the next decade. 

“Labor is in favour of fair, sensible and responsible changes - that’s why we’ve announced today our support for $1.5 billion of changes. 

“Labor has also indicated a potential $14 billion in savings over ten years if we remove excessive superannuation tax concessions. The Government’s own Budget papers show the cost of these concessions will outstrip the cost of the Age Pension in just four years, yet Tony Abbott is refusing to even consider making fair and responsible changes. 

“This Government would rather attack two generations of pensioners than tackle super tax breaks for the very wealthy,” said Ms Chesters. 

 

KEY FACTS ABOUT THE BILL 

  • New round of pension cuts will hurt almost 330,000 existing low income pensioners.
  • Independent analysis found that half of all new retirees will be hurt by these cuts within ten years (Industry Super)
  • In total, 1 million retirees will have their pension cut including around 700,000 people who are about to retire (50-65 year olds).
  • Including more than 90,000 part-pensioners who will be thrown off the pension entirely.
  • Any pensioner couple with more than $451,500 in assets will have their part pension cut.
  • Any single pensioner with more than $289,500 in assets will have their part pension cut.
  • The cost of superannuation tax concessions will outstrip the cost of the pension in four years’ time (2014/15 Budget).
  • 38 per cent of all super tax concessions go to the wealthiest 10 per cent of account holders (Industry Super)
  • However, 171 500 current pensioners will benefit by on average $30 a fortnight due to increases in the assets free area

 Examples: 

  • A single Age Pensioner who owns their home and has a super income of less than $25,000 per year would lose $8,200 of their $11,800 part pension, per year – nearly a quarter of their total income. 
  • An Age Pensioner couple who own their home and receive a combined $45,000 income ($450,000 each in superannuation) would lose their entire combined part pension of $11,400 per year. 
  • The Government wants to take more than $13,500 away from a pensioner couple who have a superannuation income of less than $40,000 per year.
  • A pensioner home-owner couple with $550k in super each, has an annual super income of around $55,000.  These are the wealthiest households to be affected by this measure.