How the government's overhaul of the pension system will affect you

Wealthier Australian retirees will be worst off, while those with fewer assets will benefit, under sweeping changes to the pension planned for next week's Budget.

More than 170,000 pensioners will get about $30 a fortnight extra in their bank accounts under a new plan outlined by the federal government today.

The changes will help retirees with a modest amount of assets while taking the pension away from those who are much wealthier, Social Services Minister Scott Morrison announced today.

He said nine in 10 pensioners and Australians getting pension-linked payments would either be better off or see no change.

"We're helping those with more modest assets," Mr Morrison told 9NEWS.

The Department of Human Services calculates the rate of pension by adding up the value of assets a pensioner or their partner own or have an interest in, including assets held outside Australia.

The primary residence, the house in which a pensioner lives in, is not counted under the asset test, but any investment properties are.

All couples who own their home and have additional assets worth less than $451,500 will be better off under the planned changes.

Couples who don't own their own property and hold assets worth up to $699,000 will also win from the changes.

For every $1000 over the threshold, the rate of pension is reduced by $1.50. Under the new scheme, the rate of pension would reduce by $3 for every $1000 over the threshold.

The new system would come into effect from January 2017, meeting the government's promise not to change pensions before the next federal election, due in late 2016.

Comparison of current Assets Test parameters with the new scheme:

Retired couples will lose the part-pension if they have assets, excluding the family home, worth more than $823,000, down from the existing limit of $1.15 million.

More than 91,000 of the wealthiest people on the part-pension would lose that benefit under the changes.

But Mr Morrison said they would still get the Commonwealth Seniors Health Card, which gives them concessions on medicines and bulk-billing from GPs.

Plans to change the pension indexation rate, announced in last year's budget, have been dumped.

Mr Morrison expects the Greens to support the changes, ensuring their passage through parliament, saving the Budget $2.4 billion.

Older Australians say the new plan is much more sensible.

"This is a better place to start looking at any pension changes, but the proposal still needs to be scrutinised as part of a broader retirement incomes review," Council on the Aging chief executive Ian Yates said in a statement on Thursday.

Homeowner couples:

Non-homeowner couples:

Single Non-home owners:

Single Homeowners: