By political reporter Johanna Nicholson Thursday 07 May 2015
Photo: Scott Morrison says he has been consulting with crossbench senators about alternative savings to the pension system. (AAP: Mick Tsikas)
Related Story: Morrison moves closer to tighter assets test for pension
The federal budget will overhaul the age pension, giving more money to pensioners with modest nest eggs and stripping benefits from wealthier retirees.
The Government said the changes will see 172,000 pensioners $30 better off a fortnight.
About 91,000 retirees who own their own homes and have other assets worth more than $823,000 will no longer get their part-pension.
Social Services Minister Scott Morrison said the changes are about helping those most in need.
"We want the welfare system to be focused on those on greatest need and in the pension system, that's with those with low or modest assets," Mr Morrison told the ABC's AM program.
Assistant Treasurer Josh Frydenberg said the changes make the pension system more sustainable.
Subscribe to get ABC News email updates, including reports and analysis on how the federal Budget will affect you, as well as alerts on major breaking news."In fact, 3.7 million pensioners or people with their payments linked to the pension will actually be better off or see no particular change," Mr Frydenberg said.
"That's what we want to keep the focus on, is to help the people most in need."
Mr Frydenberg confirmed the Government will scrap last year's unpopular pension policy, which would have linked pensions to inflation rather than average wages.
Seniors groups claimed it would have left pensioners worse off.
"We are getting rid of the change to the indexation for the pension, which would have affected a large number of pensioners," he said.
"We're changing the taper rates, we're changing the asset-free thresholds and our whole rationale for this is to create a sustainable and fair pension system."
Mr Morrison said the changes, along with some other measures, will save the budget around $3 billion.
The changes are due to come into effect in 2017.
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