This year’s budget included a range of changes across the board, leaving some better off, and some a little worse for wear. Perhaps one of the more pressing changes for retirees is the proposed changes to the pension asset test.
While not having an immediate impact (with much of the proposed change to take effect in 2017), many of those approaching retirement may be better off by structuring their investments in advance of the change.
The policy proposes to lift the asset test threshold, which will result in access to the full pension for more people, but an increase in the taper rate reduces the pension from $1.50 per $1,000 of assets above the threshold, to $3.00.
Image source: Minister for Social Services.
These changes may result in a reduced entitlement for retirees who previously had access to a part-pension. This impact may be particularly challenging to overcome for those with assets which are not liquid (for example, property), and thus, those with questions should obtain specific advice relative to their situation on possible options.
The information contained in this article is general by nature, and is not all-encompassing, nor does not take your personal circumstances into consideration. If you’d like to chat about the budget changes and how these impact your specific circumstances, please contact us, or give the team a call.
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