National

Uniting Church ministers face pension shock after being caught welfare crackdown

More than 1200 retired Uniting Church ministers have been kicked off the age pension or had their payments slashed after being caught up in a government crackdown on former public servants claiming welfare payment.

Ron Reeson, a retired Canberra-based Uniting Church minister, says the pension cuts will be felt keenly.
Ron Reeson, a retired Canberra-based Uniting Church minister, says the pension cuts will be felt keenly. Photo: Jay Cronan

The churchmen and their widows have had their access to the Centrelink age pension drastically reduced as the government moves to stop retirees accessing generous "defined benefits" super plans while also claiming the pension.

The vast majority of the 35,000 retirees who have been hit so far are retired state and federal public servants and the church believes the cuts to its former ministers' retirement incomes are an unintended consequence of the government's move .

The Uniting Church's clergy began paying into a defined benefits super scheme when the organisation was formed in the 1960s through the merger of Australia's Presbyterian and Congregation faiths.

But the former ministers and widows of Uniting Church clergy, many of whom are entitled to full or part age pensions have now found themselves caught up in the broader sweep of welfare reform.

The new "10 per cent cap", which came into force on January 1, means they can only exempt 10 per cent of their super payments from the Centrelink income test, down from the previous 50 per cent.

Only one group of retirees, former Australian Defence Force personnel who benefit from their own generous defined benefits super schemes, have secured an exemption to the change after a political backlash against the then Abbott government.

Ron Reeson, a retired Canberra-based Uniting Church minister, said that many of his colleagues were far removed from the former bureaucrats, cited by the federal government, with six figure incomes who were still claiming the age pension.  

"I know of one minister whose pension has reduced by $8,000 per annum," Mr Reeson said.

"Most of these retired ministers worked at a time when their spouses, mainly women, were not in paid employment. They were one-income families. Such cuts will be felt keenly.

"It is hard to imagine that church ministers were a target group for such legislative changes."

The Uniting Church itself also believes the government did not envisage the retired ministers being hit by the changes and has written to Social Service Minister Christian Porter asking for their position to be reconsidered.

A spokesman for the church confirmed there was a dialogue developing.

"The Uniting Church is now considering the minister's response and anticipates an ongoing dialogue," he said.

A spokesman for Mr Porter said the changes were about ensuring that retirees with defined benefits super savings were treated like everyone else.

"This change is about ensuring fairness in how income is treated when deciding how much taxpayer income support a person should receive," the minister's spokesman said.

"Defined benefits are a generous form of income for the income test.

"We are fixing an unintended consequence of a previous change to enable fairer assessment of a person's need for income support."

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