Pensioners get first reduced payments amid anger over politicians' entitlements

Amid simmering anger over politicians' entitlements and the government's Centrelink debt clawback, about 327,000 pensioners have had their pension reduced or cut altogether, this week and last.

One of those is 69-year-old Helena James, who estimates her part-time pension income will be halved.

"I would be happy to forsake some of my pension to better the economy,"   Ms James exclaims. "But then to hear that parliamentarians are rorting the system is absolutely disgraceful."

Ms James worked for 46 years before retiring in Werribee last year. (She still volunteers once a week at the Royal Children's Hospital.)

The federal government insists its pension reforms, which it passed last year with the support of the Greens, are necessary to secure the long-term viability of the pension.

Treasurer Scott Morrison told 2GB radio in Sydney last month the cuts would bring in "around a billion a year" in savings, and the changes were necessary to keep the pension sustainable.

"When you are faced with an ageing population, let's not forget the pensions that are paid out today are paid for by today's taxpayers – the people who are paying taxes today," he said.

But Victorian pensioners losing payments face a double-whammy; once they lose their pension card they will also be stripped of a range of state-based pensioner discounts, including reduced council rates.

There seems little chance of the Victorian government picking up the slack, with Families Minister Jenny Mikakos​ saying the responsibility rests with the Turnbull government alone.

"Pensioners are some of the most vulnerable members of our community and any cuts to concessions will have a big impact on their day-to-day lives."

In a statement, Social Services Minister Christian Porter said the changes "only affect those with significant levels of assets other than the family home and who receive a part-pension".

"The family home remains exempted from the assets test and the changes have been designed so that they only impact pensioners with significant assets outside the family home."

Under changes introduced in the last budget, which came into effect on January 1, pensioners who own assets above increased thresholds - not including the family home - will receive a reduced fortnightly pension rate.

Single homeowners can have $250,000 in assets, not including their home, before their pension rate is reduced, while homeowner couples can own up to $375,000 in assets before their pension rate is cut.

After that threshold is reached, pensioners will lose $3 for every $1000 they own over the limit, up from $1.50.

The changes will leave about 171,000 pensioners better off; on average $30 a fortnight.

But Labor and the unions have come out swinging against the changes, which will see about 236,000 pensioners lose part of their payments, and another 91,000 lose their pension entirely.

They come into effect amid protracted complaints about the government's handling of the "clawback" of $4.5 billion in supposed debts, with about 232,000 people served with notices that they owe Centrelink money. It has been estimated that at least one in five of those contacted did not owe a debt.

And therein lies the rub for Ms James.

"I'm happy if my money goes to somebody who really needs it, but I get really cross and these politicians who are just rorting the system," she says. "We pay them through our taxes...they should be setting an example."

ACTU assistant secretary Scott Connelly said the government could look elsewhere for cuts, pointing to its proposed corporate tax cuts, which Treasury has estimated will cost the budget at least $48.2 billion over 10 years.

"The politicians that have made this choice are so far disconnected, as we've seen in recent days," Mr Connelly said. "We don't accept that this is the right decision for the times."

Council On The Ageing chief executive Ian Yates said there were mixed views on the reduction among members.

"We've never advocated a reduction in the pension, but at the time we said this is the least worst of the options around," Mr Yates said.

Opposition families spokeswoman Jenny Macklin said pensioners were now aware of the "real" impact of the pension cuts. "Mr Turnbull just doesn't get fairness. He's taking money off pensioners and at the same time he's trying to give big businesses and the banks a $50 billion handout."

The story Pensioners get first reduced payments amid anger over politicians' entitlements first appeared on The Sydney Morning Herald.

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