Are aged pension recipients excluded from these changes?

Hi Bill,

Our understanding is that pensioners are not completely excluded from the CGT changes, but they do appear to be excluded from the proposed 30% minimum tax on capital gains.

The Budget proposes two main CGT changes from 1 July 2027: replacing the current 50% CGT discount with cost-base indexation, and introducing a 30% minimum tax rate on capital gains. Based on the Budget material, people receiving income support payments, which should include the Age Pension, are exempt from the 30% minimum tax.

However, that does not necessarily mean pensioners are exempt from the broader change to the CGT discount. For investments held personally, including shares or managed funds outside super, the post-1 July 2027 gains may still be calculated under the new indexation system rather than the current 50% discount.

Importantly, gains accrued before 1 July 2027 should continue to be treated under the current rules, with the new system only applying to gains accruing after that date. Assets inside superannuation, including SMSFs, are also excluded from these reforms, so the issue is more relevant to investments held outside super.

It is therefore likely that funds outside of super will still be impacted by the change from the 50% discount to indexation, depending on the structure of the fund and how capital gains are distributed. But Age Pension recipients should not be caught by the proposed 30% minimum tax, based on the Budget material.

• We are not tax experts, and the legislation still needs to be finalised, so we recommend you check with your accountant once the final rules are released.