The federal budget will overhaul the age pension, giving more money to pensioners with modest nest eggs and stripping benefits from wealthier retirees.

The Government said the changes will see 172,000 pensioners $30 better off a fortnight.

About 91,000 retirees who own their own homes and have other assets worth more than $823,000 will no longer get their part-pension.

Social Services Minister Scott Morrison said the changes are about helping those most in need.

“We want the welfare system to be focused on those in greatest need and in the pension system, that’s with those with low or modest assets,” Mr Morrison told the ABC’s AM program.

Prime Minister Tony Abbott said the Government’s plan to change the age pension demonstrated next week’s budget would be “fair” and would reverse changes made under the former Howard Government.

“This idea that you can be a liquid assets millionaire and still be a part-pensioner I think is problematic,” he told Macquarie Radio.

“So we will be tackling that but at the same time at the other end of the asset scale we want to make it more generous.”

Assistant Treasurer Josh Frydenberg said the changes make the pension system more sustainable.

“In fact, 3.7 million pensioners or people with their payments linked to the pension will actually be better off or see no particular change,” Mr Frydenberg said.

“That’s what we want to keep the focus on, is to help the people most in need.”

Mr Frydenberg confirmed the Government will scrap last year’s unpopular pension policy, which would have linked pensions to inflation rather than average wages.

Seniors groups claimed it would have left pensioners worse off.

“We are getting rid of the change to the indexation for the pension, which would have affected a large number of pensioners,” he said.

“We’re changing the taper rates, we’re changing the asset-free thresholds and our whole rationale for this is to create a sustainable and fair pension system.”

Mr Morrison said the changes, along with some other measures, will save the budget around $3 billion.

The changes are due to come into effect in 2017.

Mr Abbott also said Joe Hockey would be Treasurer heading into the next federal election.

Last year’s budget was not received well by voters, leading to speculation about Mr Hockey’s future

Mr Abbott said if there was a backlash to next Tuesday’s budget, the senior economic team would take responsibility as a group.

“So it is a team effort. In the end it’s the Government’s budget and if the budget doesn’t go well obviously the Government will suffer,” he said.

“But I am confident that this is the right budget for these times.”

Calls for independent review of pension changes

The Council on the Ageing has called for an independent review of the pension changes.

Council spokesman Ian Yates welcomed the Government’s decision to dump plans to lower the pension indexation.

But he said moves to strip about 300,000 wealthier retirees of their benefits by making changes to the assets test needs further scrutiny.

“The Government is saying that there’s a community expectation that people with a certain level of assets, couples with over $800,000, will be using that as part of their retirement income,” he said.

“That’s something we think should go through the scrutiny of an independent review so that we can try and get some bipartisanship.”

Greens ageing spokeswoman Rachel Siewart said the changes appeared to be a step in the right direction, but were quite complex and needed consideration.

“It is likely that we would refer these changes to a Senate inquiry so that we can get an idea of what those changes are to make sure there is no unintended consequences,” she said.

Source:abc.net.au

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