Malcolm Turnbull is short changing pensioners in Ballarat by failing to reduce deeming rates in line with falling interest rates.
The Liberals have failed to adjust the deeming rates for more than 18 months despite interest rates falling from 2.25 percent in February 2015 to 1.50 percent today.
Currently a single pensioner’s savings are deemed at 1.75 percent on the first $49,200 and any amount over that is deemed at 3.25 percent.
Deeming rates are supposed to reflect returns across a range of investment choices available in the market, but the Turnbull Government is failing to act by lowering deeming rates.
Labor understands that in today’s low interest rate environment pensioners find it difficult to get a decent rate of return on their savings.
Deeming is where financial assets are ‘deemed’ for the purposes of pension means testing to earn a certain rate of return, regardless of the actual earnings of the investments. These rates are determined at the discretion of the Minister for Social Services.
Last week the Turnbull Government confirmed it would continue with its plan to abolish the energy supplement for Australian pensioners.
If Mr Turnbull gets his way single pensioners will be $14 per fortnight worse off as a result of his cuts to the energy supplement.
Cutting the energy supplement would completely wipe out any benefit pensioners receive from the 20 September indexation increase of $3.20 per fortnight for single pensioners and $2.50 for couple age pensioners.
September 20 is one of two regular indexation days in which the pension is indexed in line with the highest of three indices: Consumer Price Index (CPI), Male Total Average Weekly Earnings (MTAWE) or the Pensioners and Beneficiary Living Cost Index (PBLCI).
In every single Budget the Abbott-Turnbull Government has handed down they have tried to cut the pension.
In 2014 the Abbott Government tried to change pension indexation – a change that would have left pensioners around $80 a week worse off within ten years.
Then they tried to reset the deeming thresholds – a cut to 530,000 part pensioners.
The Liberals still want to increase the pension age to 70 – meaning that Australia would have the oldest pension age in the developed world.
The Liberals still want to change the amount of time migrant pensioners can spend overseas before their pension is cut.
Only Labor is standing up for Ballarat pensioners.
Mr Turnbull must lower deeming rates and provide relief to pensioners in Ballarat.