They've worked their whole lives and saved for retirement. And now the government is going to punish them for it.

Low income families need to be concerned about the Coalition’s new pension policy, Shadow Ministers Tanya Plibersek and Jenny Macklin write.

A lot of women today are part of the “sandwich generation”. They’re looking after kids or grandkids, but they’re also helping out their parents.

So it wasn’t just pensioners who were worried about last year’s federal budget that cut aged and disability pensions and the carers payment by up to $80 a week within ten years.

Younger people see the stress that their parents face and think it’s unfair.

child savings
Image: iStock.

Thanks to the relentless campaigning of pensioners around Australia, the Government has shelved its plans to cut indexation. It’s not that they don’t want to do this anymore, it’s just they have finally realised they can’t. You can bet they’ll bring it back again if ever they are given the chance.

So they’ve changed their target.

This week they’re going after part-pensioners. That’s despite Tony Abbott promising before the election there would be no changes to the pension.

Part-pensioners are people who have worked hard all their lives and managed to save money for their retirement so they don’t get the full pension. They get less than the full pension depending on how much they have in the bank, and how many other assets they have. Other assets include things like furniture and the family car.

These are people who have done exactly what they’ve been asked to do: save for retirement. Now the government says they should spend their savings before they can get a decent pension.

The changes the government is suggesting mean some single pensioners will lose more than $8,000 a year – a quarter of their yearly income of $36,000.

Some couples will lose approximately $14,000 a year.

Admittedly part pensioners are better off than full aged pensioners, because they have saved a few hundred thousand dollars. But think of the part-pensioners you know. Many of them have saved hard and denied themselves luxuries all their lives. Many came to Australia decades ago with nothing, or left school early and worked 6 or 7 days a week. By definition, these people are income poor. They’re not living on easy street.

Labor pension policy
Image: iStock.

The Government also wants to cut support for people on the Disability Support Pension who are trying to study or retrain to get into the workforce.

The pension cuts wouldn’t be quite so insulting if the Government was also prepared to look at high income superannuants.

Labor has proposed reducing the generous tax concessions for people with very high superannuation balances – over $1.5 million

The Government’s own Budget papers show the cost of total superannuation tax concessions will outstrip the cost of the Age Pension in just four years.

In contrast, what we spend on pensions is low by international standards.

Labor’s plan is to slightly reduce generous tax concessions for around 70,000 richer Australians, while the Government’s plan cuts the pensions of 330,000 middle income retirees.

The one thing you can bet on is that the Government won’t leave the pension alone.

What do you think about the government’s proposed changes to pensions?

Read more:

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All your retirement dreams and how much it will cost to make them come true.

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