The Abbott government will overhaul Australia's pension system in next week's budget, with over 170,000 low-to-middle income pensioners to be $30 a fortnight better off.

But the tightening of the pensions assets test will hit wealthier retirees, with around 91,000 expected to lose access to the part-pension and 236,000 people to have their pensions decreased.

The changes replace the plan announced in last year's budget to change the indexation of the aged pension from average weekly earnings to the lower Consumer Price Index.