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Wednesday, 24 August 1983
Page: 159

Mr HUMPHREYS —My question is directed to the Prime Minister. Why has it been found necessary to reintroduce an assets test when pensioners have not had to disclose such assets for many years?

Mr HAWKE —The one incontrovertible fact about the present and future condition of Australia is that it will have an aging population. A smaller proportion of Australians will be employed in the work force and they will have the obligation of meeting a commitment to a growing proportion of the Australian population which is aged. Therefore, people across the political spectrum must accept that the Australian community, faced with the responsibility of meeting the requirements of a larger proportion of its population in the aged category, will need to go about the task sensibly and see that our resources are applied to those who are in need.

It has been necessary, in those circumstances, to return to an assets test to stop wealthy people exploiting, or even cheating, our pension system. As you know, Mr Speaker, in 1976 the previous Government stopped counting large asset holdings in assessing pensions. That policy resulted in an explosion of shady investment schemes which often involved contrived ways of converting income to capital gain. It is unacceptable that retired people with large estates and hundreds of thousands of dollars should be able to arrange their assets so that they can receive the full pension and fringe benefits.

Our proposal will take about a year to finalise because we have undertaken to consult pensioners' organisations and because it will take that amount of time to get the administrative arrangements in place. It is to be hoped that the Opposition does not undertake a campaign unnecessarily to frighten people in the community who have no need to be frightened. The facts are that single pensioners can have $17,100 in savings and still receive the maximum pension, and pensioner couples can have $28,500 in savings and receive the full pension. As is known and understood by honourable members opposite, we will not count as assets the pensioner's home, car or other possessions such as caravans, boats and jewellery. We will not count assets of $1,500 for a single person or $2,500 for a married couple. Considerably more can be held before the pension is affected because of the operation of the pension free areas.

Above that, an amount of 10 per cent imputed income will apply. We will count 10 per cent of savings as income. That applies only to funds in banks, building societies and properties such as blocks of flats additional to the family home. There is no change to the policy of paying the maximum pension to single persons with an income of $30 a week and married couples with an income of $50 a week.

I ask honourable members and members of the public to understand this fact: Single pensioners can have personal property and assets worth up to $106,000 without losing a pension, and married pensioners can have personal property and assets worth up to $177,000 before losing a pension entitlement. Those figures are at November 1983 rates and will be increased by the time the assets test is reintroduced.