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Retirees at risk of lower pensions with new checks

NEW CHARGES: Mackay retirees drawing from both a superannuation account and government income support payment could get hit with new rates if they change their superannuation providers.
NEW CHARGES: Mackay retirees drawing from both a superannuation account and government income support payment could get hit with new rates if they change their superannuation providers. Big Cheese Photo

ALMOST 9000 Mackay pensioners have been warned their pensions could be reduced if they change their superannuation fund provider, under changes to income tests in force from today.

Figures from the University of Adelaide show the Mackay region is home to 8985 full or part-time pensioners, many of whom may also have income from superannuation accounts.

The national changes to income tests for the aged pension will mean retirees' income from superannuation accounts will be subject to "deeming rates" from January 1, bringing super income into line with income from other investments like shares or term deposits.

It will apply to senior Australians who are drawing income from both a superannuation account and a government income support payment, mostly likely a full or part aged pension, who change their super fund from January 1.

CPA Australia's senior superannuation adviser Michael Davidson said the changes meant that "income retirees get from their superannuation accounts will face the same deeming rates as other financial investments".

"It will mean current retirees could get hit with the new rates if at some point in the future, they decide to change providers.

"But they can change the amount of income they get and make other changes to their existing accounts, but not change which fund they are with, to avoid getting hit."

The changes will mean a single homeowner with assets less than $139,000 will get a full pension, but those with more than $253,000 may have their pension reduced under assets tests.

Single pensioners with between $139,000 and $253,000 will face an income test which would likely see their pension reduced to varying degrees.

He said while the changes did not affect current pensioners if they had no plans to change their superannuation fund, it would hit those opening new accounts or changing providers from today.

Despite the government's apparent desire for retirees to be self-sufficient, Mr Davidson said it did not make sense to be closing the incentive by applying the deeming rates to superannuation income.

Topics:  changes income retirees super



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