Defined benefit pensions to change
Next year's changes to defined pensions will affect the level of age pension received for the majority of state-based public sector and private pensions, a non-aligned financial planning and accountancy group warns.
Changes to Centrelink's income assessment of funded defined benefit pensions will affect age pensioners who have a non-assessed portion of their defined benefit pension greater than 10 per cent, a senior financial adviser at Findex Group, Andrew Rafty, said.
Rafty noted the changes would definitely affect those who are already income test critical (as compared to the other Centrelink criteria - the asset test) as it increases the level of income assessed.
"The defined benefit pensions not affected by these changes are the unfunded pension schemes. Unfunded pensions are paid from our taxes via consolidated revenue and are currently 100 per cent assessed by Centrelink," he said.
The change is to commence on 1 January 2016.
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