2017: Pension age to 70 and what else?

Back in September last year, the Minister for Social Services, Christian Porter, confirmed that the Turnbull Government still wants to increase the Age Pension eligibility age to 70.

He was asked at the National Press Club in Canberra when legislation to increase the pension age to 70 will be introduced into the Parliament.

“You will see that legislation”, was the Minister’s answer.

This measure was first announced in the 2014 Budget and neither Mr Abbott nor Mr Turnbull has been able to pass the changes through the Parliament, so it remains to be seen whether Minister Porter will have better luck. At the moment, there is not even a Bill.

However, there are a number of Bills with measures that will affect pensioners and older Australians.

The Budget Savings (Omnibus) Bill 2016, passed late last year, contains two measures worthy of mention here.

First measure, the pension income and assets test exemptions for pensioners in residential aged care who rent out their former home and pay their aged care accommodation costs by periodic payments, will be abolished. The exemption previously meant that the former home - if rented out - is not counted as an asset and the rent received not counted as income. There will be no grandfathering here.

The second measure stops new recipients of particular welfare payments or concession cards from being paid the energy supplement from 20 March 2017. This measure has been watered down following a strong campaign from welfare advocates including CPSA. New Commonwealth Seniors Health Card holders and recipients of family tax benefits are set to lose out.

The Social Services Legislation Amendment (Budget Repair) Bill 2016, not yest passed, would reduce from 26 to six weeks the period during which the Age Pension can be paid outside Australia. This means that after six weeks a pensioner’s payment would be adjusted according to the length of the  pensioner’s Australian working life residence.

After six weeks, the pension supplement and any other supplements would no longer be paid. What would be paid is the basic pension with the normal reductions due to income or asset testing. However, to retain that basic means-tested rate while overseas, a  pensioner needs 35 years of working life residence in Australia.

Working life residence is calculated based upon the period beginning when the person turns 16 and ending when the person reaches pension age. If a person’s  period of Australian working life residence is less than 35 years, their individual rate of pension after six weeks will be adjusted according to their years of working life residence.

The Social Services Legislation Amendment (Transition Mobility Allowance to the National Disability Insurance Scheme) Bill 2016, which is currentl before the Senate, tightens the eligibility criteria for the Mobility Allowance for new claims and reduces the period for which the allowance is continued when a person ceases to be qualified. The allowance will no longer be payable to individuals who transition to the National Disability Insurance Scheme (NDIS). The Mobility Allowance stops from 1 July 2020.

Finally, in about three months' time, the Treasurer will present his 2017 Budget, with a new slew of measures. CPSA will keep you posted.