New age pension entitlement assets test rules apply from 1 January 2017.
From 1 January 2017 the pension reduction taper amount reduces by $3 per fortnight for every $1,000 of assets over the asset free area.
As a transitionary measure, health care card holders who are adversely affected by the change can keep their card without having to meet the income test.
According to the article “Change in assets test affects account based pensions” the new measures are protective of account-based pensions.
This means unless someone has significant income in addition to the account based pension they should not be disadvantaged by the new income rules that will apply to account based pensions. read more at smsfsurvivalcentre.com.au
For a more strategic information, see the following video (1 hr 22 mins) courtesy of Gavin Martin/Cornerstone Wealth. Note that limits and thresholds are correct at the time of publication up to 1 January 2017. Subsequently indexation adjustments may apply.
For information on the Commonwealth Seniors Health Card entitlements see:
- Commonwealth Seniors Health Card (atotaxrates.info)
- Commonwealth Seniors Health Card (Human Services)
Author Daryl Dixon argues that the new pension asset test cut-off points will result in a large number or retirees losing the pension.
Unfortunately, the work opportunities for most retirees are limited reducing scope for many to take advantage of the substantially more generous income test arrangements.
For about 300,000 retirees disadvantaged by the new asset test rules, the 7.8 per cent assets tax rate provides a strong incentive to dissipate existing savings.
Read the full article here: The harsher pension test gives retirees little reason to save