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What do you think the chances are of Scott Morrison’s support for a tightening of pension entitlements getting up? My understanding is that both ACOSS and Morrison think a couple with $800,000 in assets outside the home is “wealthy,” whereas such a couple may well be earning less than the pension.
How does such an approach encourage people to sacrifice now, in order to build up their superannuation for the future?
A: I think there is a good chance that there will be changes. It seems to have broad political support – and can probably be done without antagonizing too many voters. It is also such a complex area – very hard for the public (and media) to follow the debate and implications.
3 areas are being considered:
a) the exempt amount before the asset test starts (for both homeowners and non- homeowners);
b) the taper rate – currently $1.50 for each $1,000 – however was $3.00 back in 2007;
c) as a corollary to (b), the threshold at which any entitlement to a part pension ceases.
My guess is that (b) is a starter – not sure whether they want to cut that hard into the exempt amount and jeopardise some pensioners losing their entitlement to a full pension.
Also, very unclear as to start date (post next election?) and/or grandfathering for existing pensioners.
