Australian Social Services Minister Christian Porter.
Australian Social Services Minister Christian Porter. LUKAS COCH

Retirees hit back at Minister's 'asset rich' comments

INDEPENDENT retirees in Central Queensland are up in arms over comments they are "asset rich".

The claim was made by a spokesperson for the Minister for Social Services Christian Porter regarding the impending changes to the Aged Pension asset income test.

The Association of Independent Retirees Capricorn Branch's Arch Finalyson contacted The Morning Bulletin to express the "insult" felt by "those who have made the effort to save during their working life for their retirement".

"The Government fails to recognise the savings to Government revenue these retirees have been making. With some of the advice being given to retirees in this position, the Government may be defeating its purpose with these changes," he said.

"People need to be encouraged to save to look after themselves partly or fully in retirement and not penalised for doing so.

"The Association has actively lobbied the Federal Government on the "negative and unforeseen impact of these changes".

A Independent Retirees' spokesperson said the "asset rich" claims inferred a married couple who own their own home and have a lifetime retirement savings of more than $816,000 were rich and could live on the interest or dividends from that investment.

"In reality, however, retired people are conservative investors who make sure their hard-earned savings are not lost or reduced by stock exchange fluctuations, so a 4% return would be above average for most of them," they stated.

"At that rate their income is actually less than the Age Pension for similar retirees who would also receive the Pensioner Health Card and discounts for rates, car registration etc. The argument is the same for couples without their own home or for singles."

They rejected the Government's response that retirees would have to drawdown less than 2% of their capital each year to maintain their lifestyle.

Rather, the Association believes the percentage will be increased each year.

"This will lead to many retirees reducing their capital by far more to maintain an acceptable lifestyle and be eligible for a part pension and Pensioner Health Card, and so defeat the Government's intention.

"The Government argues that the retiree's assets are not to be used for intergenerational transfer, but the family home is the actual wealth transfer asset as it is not subject to any taxes when passing it on to children. Retirees are not dumb and they may become revengeful and put money into their home to increase their eligibility for the pension and at the same time provide a better nest egg for their children."

Changes to the Aged Pension assets test thresholds 2016-17

Full pension asset limits:

Non-homeowner, single: $360,500 (current), $450,000 (2017)

Non-homeowner, couple: $448,000 (current), $575,000 (2017)

Homeowner, single: $209,000 (current), $250,000 (2017)

Homeowner, couple: $296,500 (current), $375,000 (2017)

Part pension asset limits:

Non-homeowner, single: $945,250 (current), $742,500 (2017, initial projection $747,000)

Non-homeowner, couple: $1,330,000 (current), $1,016,000 (2017, initial projection $1,023,000)

Homeowner, single: $793,750 (current), $542,500 (2017, initial projection $547,000)

Homeowner, couple: $1,178,500 (current), $816,000 (2017, initial projection $823,000)

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