“Retirees should first spend their own assets and be eligible for a full Age Pension when they fall below a threshold,” Rice Warner said.

While the firm argued it would be appropriate for a couple to keep a family home up to the value of $1.5 million and all other assets, including superannuation of no more than $500,000, and to continue to receive the age pension, individuals with assets above this should not be able receive it.

“This still favours home owners over renters so you might allow higher levels of assets for renters to compensate,” said the submission.

“This level of exempt asset would move some people currently on a part pension to a full pension and others to no pension, [although] we favour grandfathering of the current retirees for at least a decade.”

The submission said that under the proposal, if people have a valuable home they have the choice of downsizing or requesting a government pension that is paid as a loan with the home as security.

“At present, people won’t downsize as the cash generated impacts on their age pension,” the submission said.

Rice Warner also made two other suggestions which the firm said would remove incentives for running down funds as quickly and falling back on the age pension.

Pensioners should be able to receive a health card, irrespective of their financial assets, from a specified age such as 75, it suggested.

“This would remedy the current situation where linkage of eligibility for the Health Card with being on the Age Pension acts as a powerful incentive for retirees to manage their affairs in a way that makes them eligible for at least a Part Pension,” said the submission.

The submission also proposed that retirees beyond an advanced age such as 90 should be able to receive the age pension without means testing.