Pensioners face a cut in their pensions based upon means testing of “”deemed income” which they might never receive, according to Democrat Senator Meg Lees.
Senator Lees said yesterday that under a Social Security Bill passed in the last sitting of last year, the increase in the value of any listed shares held by pensioners will be deemed to be income for means testing even though no shares are sold and the increase in value realised.
Until the Bill was passed, only actual dividends or the increased value of sold shares counted as income. Unrealised increases in value were counted only in the assets test.
Senator Lees said the changes discouraged small investment in Australian listed companies. Similar increases in values of foreign shares, unlisted shares or assets like antiques and paintings did not attract an income test. She criticised the Liberal and National Parties for voting with Labor for the Bill, even though some of their MPs had attacked the proposal before it had become law.
The Government had predicted that the Bill would save $85 million a year, however, it was likely that many pensioners would sell their shares and the Government would get nothing.
Losses could be offset against gains in other securities the following year, however, Senator Lees said the legislation applied a formula to calculate gains and losses that maximised gains and minimised losses. Under it this formula it was possible for a pensioner to be “”deemed” to have an income when one parcel of shares fell and another rose even though the value of the total portfolio stayed the same.
Senator Lees called for the legislation to be repealed.