2014 Budget
Seniors and Age Pension
Australians are living longer, and our
population is ageing rapidly. While we have
more retirees than ever before, we also have
many people who are working longer or are
able to support themselves financially after
they retire. We need a well-targeted means
tested income support system that delivers
support to those most in need, while
encouraging self-provision whenever
From July 2017, the rate of the Age Pension (and
other pension payments) will be indexed
according to the Consumer Price Index (CPI) only,
which will make indexation arrangements
consistent across social security payments and
equivalent Veterans’ Affairs payments, except for
the Defence Force Retirement Benefits Scheme
and the Defence Force Retirement and Death
Benefits Scheme, which have different
arrangements. The change will take effect at the
September 2017 indexation point.
possible.
What was announced in the
2014 Budget?
The Budget is part of the Australian Government’s
Economic Action Strategy to build a strong,
prosperous economy and a safe, secure Australia.
Changes were announced in the 2014 Budget to
ensure the Age Pension system is sustainable
and able to meet future demand.
From July 2025, the qualifying age to receive the
Age Pension will continue to increase from
67 years, by six months every two years, until it
reaches 70 years in July 2035. This change does
not affect people who currently receive the Age
Pension or those born before 1 July 1958.
There will be changes to the income test and
assets test to help ensure the Age Pension is
well-targeted into the future and to slow growth in
the cost of pensions. This also recognises that
some pensioners have the capacity for greater
self-provision. Changes include:

Income test and assets test free areas will be
fixed for a period of three years from
1 July 2017.

From 20 September 2017, the deeming
thresholds for financial investments will be
reset. The upper deeming rate will apply
above these reduced thresholds.
The Government will not include an individual’s
principal home in the assets test.
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Other changes include:

The Seniors Supplement for Commonwealth
Seniors Health Card holders will no longer be
paid beyond the June 2014 quarterly payment.

From January 2015, eligibility for
Commonwealth Seniors Health Card holders
will be more equitable and in line with the Age
Pension by including income from
superannuation account-based income
streams in the income test. This will not apply
to existing superannuation account-based
income streams held by current card holders.



and will take effect at the September 2014
indexation point. This will bring pension
indexation into line with indexation
arrangements for all other social security
payments.

Indexation changes to payment rates apply to
recipients of the Age Pension, Carer Payment,
Disability Support Pension, Parenting
Payment Single and other pension payments,
including equivalent Veterans’ Affairs
payments.

From September 2014, more people will be
eligible for the Commonwealth Seniors Health
Card because the income threshold will be
indexed annually in line with the CPI.
Fixing the value of the income test and assets
test free areas for three years from 1 July
2017 will help ensure the Age Pension is
sustainable and well-targeted into the future.

Age pensioners and Commonwealth Seniors
Health Card holders will continue to receive
the Energy Supplement (formerly the Clean
Energy Supplement), with the rate of payment
as of 30 June 2014 fixed for future payments.
While there will no longer be carbon pricing,
the Energy Supplement will continue to be
paid to pensioners, income support recipients,
family assistance recipients, Commonwealth
Seniors Health Card holders and veterans.
More information
The previously announced Housing Help for
Seniors pilot will not proceed.
Key facts

These changes will save the Budget more
than $2.1 billion over five years.

Increases to the age at which people qualify
for the Age Pension will be gradual.

From July 2025, the qualifying age to receive
the Age Pension will continue to increase from
67 years, by six months every two years, until
it reaches 70 years in 2035.

Changes to automatic indexation
arrangements for pensions coming into effect
in 2017–18 will see the pension rate pegged
to rises in the CPI only. The change will apply
to Parenting Payment Single from 1 July 2014
For more information about this measure and
other Department of Social Services’ Budget
measures, go to www.dss.gov.au
For information about the 2014 Budget, go to
www.budget.gov.au
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