The stricter Age Pension assets test is now law, and the changes took effect from 1 January 2017. The federal government originally predicted that around 326,000 Australians would be worse off under the harsher assets test (which commenced on 1 January 2017), with nearly 100,000 Australians losing all of their Age Pension benefits. SuperGuide believes the number of retired Australians affected by these changes is considerably more than 326,000.
For those 100,000-plus Australians who have lost all of their Age Pension entitlements due to the stricter assets test, the government changed the laws to ensure these Aussies losing the Age Pension due to the January 2017 changes, automatically received a Commonwealth Seniors Health Card (CSHC), without having to satisfy the CSHC income test.
The CSHC is a special card that allows the holder of that card to pay a concessional price for prescriptions under the Pharmaceutical Benefits Scheme. I explain how this new retirement deal works later in the article, but briefly the trade-off is not much of a deal when some retirees lost more than $14,000 a year Age Pension income overnight.
A further 200,000-plus Australians have immediately lost some Age Pension entitlements since 1 January 2017, in addition to the 100,000 or so Australians who lose ALL their Age Pension entitlements.
The first half of this article provides scenarios illustrating under what circumstances Australians have taken a pay cut on the Age Pension. The second half of the article explains how those who lost all Age Pension entitlements due to January 2017 changes were automatically eligible for the Commonwealth Seniors Health Card.