Wealthy Australians on the age pension will lose their payments to the benefit of poorer retirees in a pension overhaul announced by the federal government on Thursday.
The Abbott Government said the changes will see 172,000 pensioners receive an extra 23.40 U.S. dollars a fortnight.
About 91,000 retirees who own their own homes and have other assets worth more than 640,000 U.S. dollars will no longer qualify for their part-pension.
Social Services Minister Scott Morrison told News Corp on Thursday that most would be unaffected by the changes, which also adjust the rate at which extra assets cause drops in payment.
"More than 90 percent or 3.7 million pensioners and other Australians who receive pension-linked payments will either be better off or have no change to their arrangements under these new proposals," Morrison said.
All couples who either own their own home and have additional assets worth up to 350,000 U.S. dollars, or don't own property and have assets worth less than 550,000 U.S. dollars will benefit from the changes.
The new system will come into effect from January 2017, after the next federal election due late 2016.
Assistant Treasurer Josh Frydenburg told the Australian Broadcasting Corporation (ABC) the system will become more sustainable under the changes while continuing "to help the people most in need."
An unpopular policy, which tied pensions to the inflation rate rather than average wages, has been scrapped.
The new policy has the support of older Australians with the chief executive of the Council on the Ageing thanking the government for listening to concerns and working with stakeholders.
"This is a better place to start looking at any pension changes - but the proposal still needs to be scrutinized as part of a broader retirement incomes review," Ian Yates said in a statement on Thursday.