A government official has warned pensioners that selling off their assets to qualify for the age pension could lower their standard of living.

In the recent budget, the Abbott government proposed to disqualify couples with more than $823,000 in assets (excluding the family home) from the pension. The current threshold is $1.15 million.

Social Services Minister Scott Morrison has said those affected by the changes would be able to maintain their current payment levels by drawing down “less than 1.84 per cent on their additional assets”.

• Budget could cost retirees
• Turn your house into a retirement goldmine
• Housing fantasy ‘can’t last forever’

But during a Senate estimates hearing in Canberra on Thursday evening, social services department policy advisor Andrew Whitecross said that could leave pensioners worse off.

“The commentary has tended to suggest that would be an obvious thing to do,” he said.

“But that’s not really the case, because they would actually be denying themselves resources which they could be using to support themselves in their retirement, and as a result they’d have a lower standard of living.”

Mr Whitehead said evidence suggested pensioners were “careful and prudent” with their money and most either maintained or grew their assets in retirement.

The department’s Serena Wilson told senators if a pensioner decided to sell an asset worth $30,000 to get below the new threshold, they would be both denying themselves any return on that asset and forfeiting a large sum or money for a very small pension payment.

“So it’s not a particularly rational thing to do,” she said.

The pension changes are due to come into effect from January 2017 and are expected to save the budget $2.4 billion over four years.

-with ABC.