Age Pension Means Testing

Age Pension Means Testing

Are you?	- A taxpayer nearing retirement age?
At a glance:	- The Henry Tax Review has recommended changes to the current age pension means testing system in order to promote fairness for all pensioners.
You should:	- Consider the recommendations made by the Henry Tax Review and how they may affect you. - Contact us if you require any clarification or advice.

1.	Adjustments to the current means testing for the age pension have been recommended by the recently concluded Henry Tax Review.
2.	Currently, a person's eligibility for the age pension is determined by applying an income test and assets test, with any age pensions calculated using the method which results in the lowest pension.
3.	The review has highlighted a number of flaws in the current means testing system which result in unequal treatment of pensioners with similar levels of private means.
4.	For example, by applying the current income test, pensioners with income generating assets get a lower pension than pensioners with the same level of assets which do not generate income.
5.	The review has recommended introducing a single means test which should: • Ensure effective and fair assessment of an individual's retirement savings; • Be more neutral in the treatment of different forms of retirement savings; • Provide appropriate incentives for people to effectively use their retirement savings; and • Ensure availability of incentives for older Australian who wish to continue to undertake paid employment.
6.	For more information, visit the Treasury website at http://www.treasury.gov.au.