Fair and sustainable pensions
2015 Budget
Australians are living longer, and the number of Australians aged 65 and over is projected to double by 2055. The Australian Government is committed to ensuring that the social security system is fair and sustainable for all Australians, now and in the future. It is important that the system can support those who need it, while also encouraging those who can support themselves to do so.
What was announced in the 2015 Budget?
The 2015 Budget sets out changes which will help simplify the social security system and ensure it is fair for pensioners now and in the future, as well as being sustainable for future generations.
It is important that those people who are able to support themselves do so, and we are changing the social security system to encourage this.
Rebalancing the Assets Test
The Assets Test will be rebalanced to provide additional assistance to non-homeowners and people with moderate assets, and will provide less support to those who are better off.
More than 4 per cent, or 170,000,of pensioners with modest assets will have their part rate pensions increased by an average of more than $30 per fortnight due to the higher assets test free areas.
This will include around 50,000 part pensioners who will qualify for a full pension.
Around8 per cent of pensioners, those who have substantial assets (excluding the family home), will have their pension entitlementsreduced or cancelled. Those people who lose their pension will automatically be issued with a Commonwealth Seniors Health Card, or a Health Care Card for those under pension age.
The taper rate which isthe rate at which the pension reduces for savings and assets over a certain threshold is being reset from $1.50 to $3. This means the pension will reduce by $3 a fortnight for every $1000 of assessable assets over the threshold.
In response to feedback from pensioners and other stakeholders, the changes to the indexation will not go ahead.
Defined Benefits Scheme income test
There is currently an anomaly in how we measure income from defined benefits schemes. A new measure will give a fairer assessment of someone’s contribution to their retirement income. This will enable a better assessment of a person’s capacity to support themselves.
Veterans’ Affairs Pensions and defined benefit income streams paid by military superannuation funds are exempt from this measure.
These measures improve targeting of payments in the social security system to people who need them,and ensures the system is sustainable over
the long term.
Other measures
The 2015-16 Budget announced that the Government will no longer proceed with measures announced in the 2014-15 Budget to reset the deeming thresholds and to maintain pension income test thresholds and the deeming thresholds for three years from 2017.
Key facts
- These measures combined will savearound $3 billion over four years.
- The assets test for pensioners is being reworked to ensure those who receive the pension really need it, and those people who can support themselves do so.
- Single homeowners can have up to $250,000 and homeowner couples can have $375,000 before the assets test impacts their pension.
- Single non-homeowners can have up to $450,000 and non-homeowner couples can have $575,000 before the assets test impacts their pension.
- More than 170,000 pensioners will
qualify for an increase in their pension. - The family home will continue to be excluded from the assets test.
- The taper rate will be reset to
$3 – the pension will reduce by $3 per
$1,000 of assessable assets over the threshold. - This will save $2.4 billion over four years.
- The new deductible amount rules for defined benefit income streams will provide a fairer assessment of a person’s need for support through the pension.
- This will save $465.5 million over four years.
More information
For more information about this measure and other Department of Social Services’ Budget measures, visit the Department of Social Services website (
For information about the 2015 Budget, visit the Australian Government Budget website(
1