Friday, 27 February 2015
In Abbott's Australia it's all about protecting those who 'have' and knocking the 'have nots' into the gutter
The Daily Telegraph 22 February 2015:
A SECRET plan to kick millionaires off the aged pension was shelved by the Abbott Government’s budget razor gang in favour of slashing the indexation of payments for every pensioner in Australia.
The Sunday Telegraph can reveal that cabinet’s budget razor gang was asked to consider reforms to slash pension payments to wealthy seniors last year by changing the taper rate.
In another stunning leak from the nation’s most powerful cabinet committee, senior ministers have confirmed they agonised that the Prime Minister would be accused of kicking seniors off the pension and breaking a clear election promise not to cut pensions.
Instead, Treasury proposed a change to the indexation arrangements for all pensioners _ meaning the rate of increase would effectively be slowed _ from 2017….
The indexation change was announced in the May budget. Welfare groups and Labor argue it will cut pensions by $80 a week within 10 years. According to the Parliamentary Budget Office, this amounts to a $23 billion cut to the cost of the age pension by 2023.
For the first time, Liberal sources have revealed the indexation cut was not the preferred option of former Social Services Minister Kevin Andrews.
Mr Andrews had instead proposed a targeted cut that would only hurt wealthy seniors.
His preferred solution was to change the taper rate to withdraw pension payments faster from wealthy seniors with investment properties and investment income. The family home would have remained exempt from the pensions asset test.
Over time, this would have helped slow the growth of the large numbers of asset-rich Australians who claim the age pension.
This proposal would have reversed the 2006 decision by the Howard Government which brought more higher income seniors into Australia’s aged pension system by easing the taper rates….
The Audit Commission report also suggested a similar reform to the taper rate, suggesting it be increased to withdraw benefits at the rate for 75 per cent the dollar after pensioners reached an income threshold. Currently, the rate is 50 cents in the dollar.
SuperGuide 22 September 2014:
The UPPER asset thresholds for the Age Pension assets test increased again on 20 September 2014, which means more Australians may now be eligible for a PART Age Pension
By way of example, this means Abbott & Co decided that a single person over 65 years of age with no dependents, owning a $1 million+ home on up to 2 hectares of land, who has $770,000 in other assets producing an income of $900 per fortnight, will still receive pension and energy supplements with a combined worth of over $2,000 per annum – while a single person over 65 years of age with no dependents, owning no property, having no other assets, will see the value of the aged pension he/she receives reduced by an est. $416 per annum in 2017 (increasing to est. $4,160 per annum by 2025) due to the Abbott Government changes to pension indexation.
Yes, in Abbott’s Australia it’s all about protecting those who have and knocking the have nots into the gutter.