Labor won’t be offering compensation to pensioners affected by its plan to scrap the $59 billion in refundable tax credits on share dividends.
The policy will impact more than 200,000 pensioners.
On Wednesday Opposition Leader Bill Shorten said he would make sure they are OK “full stop”.
A day later he said reports about a compensation scheme for those affected were wrong.
But Mr Shorten was promising pensioners would be better off under Labor.
“It was the Liberals who voted to kick 100,000 pensioners off the aged-pension altogether,” he told reporters in Melbourne on Thursday.
“It was the Liberals who voted to reduce the part-pension for 270,000 pensioners.”
The government was also denying other pensioners the energy supplement of $360 a year and had its eyes set on lifting the retirement age, Mr Shorten said.
The party’s finance spokesman Jim Chalmers said if some pensioners lost money as a consequence of the planned changes, that would be factored into the various tests that people are subjected to when they apply for the pension.
“Everybody will be in a different situation but Bill is saying for some people there will be an increase to their part-pension … but it’s not true to say we’re working on another package,” he told Sky News.
Accountants are warning Labor’s plan to end the cash handouts for share investors will push more people on to the aged-pension, but social groups say the change will help fund key services.
Labor wants to reform the system that allows share investors, who technically don’t earn a taxable income, to get government cash refunds for share dividends.
It says about 14,000 full pensioners and 200,000 part pensioners will be affected by the change.
The Institute of Public Accountants says the system has helped keep retirees off the aged pension.
However, the Australian Council of Social Services said only 16 per cent of people older than 64 pay income tax, and many who don’t are quite well off.
“We have a choice. We close gaps like these in the tax system, or we charge people more for services like aged care and home care,” chief executive Cassandra Goldie said.
Prime Minister Malcolm Turnbull said Labor’s plan would hit retirees who rely on the cash payouts because they technically don’t earn a taxable income on their share portfolios.
The original scheme was introduced under Paul Keating to make sure company profits weren’t taxed twice – once with corporate tax and again via personal income tax.
But changes under John Howard in 2000 allowed investors to get a cash refund from the government if their tax imputation was more than the tax they owed.
If elected Labor will abolish the refunds, which cost $8 billion a year and $59 billion over a decade.