On changes to the age pension asset test...
I have just read the article on the changes to the age pension. The increase to the asset test is an illusion. Deeming means that the full pension is only available at around $250,000 for a couple homeowner. Plus when you recognise that the deeming rates are low, any rise in interest rates will put further pressure on the threshold for pension eligibility. A cynic would suggest that the rise in the asset threshold is a con to get age pensioners to declare assets and then they would get caught by the income test.
From Scott Francis: I was fascinated to read your letter, and to go and do some calculations. At the current deeming rates (1.75% for the first $48,600 and 3.25% for the amount above this), a person with $250,000 of eligible assets would be 'deemed' to receive income of $284.46 per fortnight. The income level where the age pension starts to reduce is $288 a fortnight. (Basically, as you say, with assets of $250,000). Given that from January 1 2015 Account Based Income Streams fell within the deeming rules, there will be a lot of Age Pension recipients impacted by deeming rules and the income test before they are impacted by the assets test. I can only agree that there is a touch of 'illusion' at play here with the increased threshold for the assets test - while people are caught by the income test.
Deeming rule changes?
Can you please identify IF or IF NOT the loss of pension due to the changes on Jan 1, 2017 will affect the rules re deeming?
I'm aware that if one loses the part pension due to the new rules, one still retains the Health Care Card. What I'd like to know is if this change will also mean that when assets drop below the max threshold, are we (who are currently grandfathered for the deeming rules) loose our grandfather status?
From Scott Francis: Thanks for the letter. I am not aware of any changes to the deeming rules. However, for further clarification my suggestion would be to get in touch with Centrelink to double check using the specifics of your situation.