CHANGES to who is eligible for a pension have laid the foundation for a battle between the federal government and opposition in the lead-up to the next election.
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The Coalition gained the support of the Greens to pass changes to the pension, meaning more than 170,000 retirees with "low to modest" assets will get a $30 increase each fortnight.
But some 320,000 pensioners with sizeable assets (excluding the family home) will have their pensions reduced or scrapped entirely.
The changes will save $2.4 billion over four years.
In return for the Greens' support, the Coalition agreed to conduct a broader review of retirement incomes but has ruled out changes to superannuation that would adversely impact retirees.
The horse trading between the parties was a big win for Social Services Minister Scott Morrison, not least of all because it knocked the opposition out of the bargaining process.
Labor voted against tightening the pension assets test and Opposition Leader Bill Shorten has signalled the policy will be a key point of difference between Labor and the Coalition heading into the next election.
But Labor's decision leaves the workers' party in the rather bizarre position of advocating pensions be paid to millionaires.
Labor wants the current eligibility test - where couples can have up to $1.1 million in assets not including the family home - to remain.
It is an odd position for Labor to adopt, given the increases came during the largesse years of (former prime minister John) Howard's battlers.
Retirees in the millionaire bracket would argue that with interest rates being so low, they are better off on the pension.
But most people would think retirees with that amount of assets should be capable of looking after themselves, not relying on the taxpayer for a handout.