Leyonhjelm calls for pension changes

Liberal Democratic Senator David Leyonhjelm has weighed into the debate over potential changes to the aged pension, saying the family home should be included in determining eligibility for the payment.

The crossbench senator says all assets and income people accumulate over their life should be taken into account in the determining eligibility for the pension, the ABC reports.

Senator Leyonhjelm said some people were living in very expensive real estate and drawing a pension, while others were working, paying taxes, and didn't own a home.

His comments come as the federal government considers scaling back access to pensions for wealthy Australians.

Social Services Minister Scott Morrison is in talks with the crossbench senators and the welfare sector to pass laws that would ease spending on pensions over coming decades.

On Thursday, The Australian Council of Social Service asked the government to cut the asset test threshold from $1.1 million to $794,250, excluding the family home.

According to the intergenerational report, the government will spend 3.6 per cent of GDP annually on pensions by 2055.