Working on … Harry Pepper, 60, is a Sydney cabinet maker who does not believe the pension age should be raised to 70. What do you think? Comment below this story. Picture: Bradley Hunter Source: News Corp Australia

But the federal budget, handed down last night, has seen the government dismiss one of the key recommendations of the Commission of Audit — to include the family home in the asset test for the aged pension.

The Abbott government has confirmed the pension age will rise to 70 by 2035. In what may be an opportunity for the increasing army of older job-seekers, the government will pay subsidies of up to $10,000 over two years to employers who hire mature workers — those over 50.

Federal Treasurer Joe Hockey seized on the fact that the aged pension changes would not come into effect until 2017, to stress they were not in breach of the Coalition’s election promise to make no changes to the pension in their first term of government.

From September 2017 onwards, the aged pension will no longer grow in line with average male weekly earnings — instead it will be indexed twice a year against inflation.

Mr Hockey said the move would ensure the government could “make pensions sustainable and affordable for decades to come”.

Taking stock … retired stockbroker John Macauley and wife Margaret Macaulay, of Brisbane, ponder the government’s spending plans. Source: News Limited

The changes to indexation for the aged pension, along with parenting payments, carers payments, Veteran Affairs pensions and the Disability Support Pensions, will save the government close to $400 million in 2017-18 alone.

Further savings of half a billion in 2017-18 will be made by freezing the eligibility thresholds for pension payments from 1 July 2017.

That means the amount pensioners can earn before their payments start being reduced, which is currently up to $156 a fortnight, will not increase year on year.

The Coalition will also move to tighten the eligibility criteria for full- or part-pension payments, by determining that older Australians are earning a higher rate on investments over $30,000.

The Seniors Supplement, which provided annual payments of $876.20 for single adults who were eligible for the Commonwealth Seniors Health Card, and $1320.80 for couples, has been scrapped. And the eligibility criteria around the health card has been tightened, now taking into account untaxed superannuation.

But the income thresholds for the Commonwealth Seniors Health Card will be indexed annually against the Consumer Price Index, which will mean about 27,000 more self-funded retirees will not lose out on the entitlement because of modest changes in their incomes.

The Seniors Health Care and Pension Concession Cards have also been hit, with the government axing a range of concessions which will save the budget $1.3 billion over four years.

The Coalition has also scrapped the Mature Age Workers Tax Offset which provided tax concessions of up to $500 for people over 55 who had a net income from working.

Aged care has also been hit in the budget, with the government saving $1.7 billion over six years from 1 July 2018 by slowing the growth in the Commonwealth Home Support Program.

Another $652 million has been saved over the next four years by scrapping Payroll Tax Supplement payments to eligible aged care providers from 1 January 2015.

Source:news.com.au

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