Source: The Australian [Samantha Maiden, Online political editor]

KEVIN Rudd has today pledged pensioners and carers will not be worse off under the May budget.

But the Prime Minister has not ruled out dumping the one-off payments that sparked controversy last week among pensioners and carers who fear the cash handouts could fall victim to the budget razor gang.

"When it comes to the bonuses system, carers and pensioners will not be any worse off under the budget," Mr Rudd said.

“When I said our carers and pensioners would not be left in the lurch that’s exactly what I meant."

The $1600 payments for carers and $500 bonus for pensioners were never guaranteed in the forward estimates even by the Howard government, but many hoped they might continue.

But Mr Rudd stressed the challenge of how to deal with the issue on a more long-term basis, hinting the payments may be axed and a new system introduced. He said Families Minister Jenny Macklin was working on this process in the lead-up to the budget.

His pledge not to hit carers in the budget comes with a hefty price tag. The program of cash handouts for carers cost around $1.5 billion over five years.

After The Australian revealed plans to axe the carers bonus last week, the Prime Minister was forced to intervene from the Solomons Islands, where he pledged the budget would not leave pensioners and carers in the lurch.

Today’s comments appear to go further, suggesting pensioners will not be financially worse off but leaving the door open to reform of the system.

Copyright News Limited – used with permission