This budget's a winner for most retirees

It's only those with $3M+ super balances that are feeling particularly bruised by the federal budget! There was 9 solid initiatives to benefit older Australians, and only two negative ones.

May 10, 2023

It has been a very long time since I have written a budget overview that was relatively celebratory for older Australians. And today, I’m impressed. For quite a few years the cost of living pressures for retirees and the businesses serving them in health, care and finance have been building up. But I think today there’s a few incremental and impactful things to celebrate. Sure, they only affect those who need it - but that’s never a bad thing. So let’s stay right out of the politics, and just look selfishly at the initiatives you can benefit from.

On first look, there is quite a bit to talk about. Some are benefits offered more widely that will benefit over-50s well, others are dedicated and celebrated changes. Anyway you look at it, the changes were targeted to those suffering from cost of living pressures, although it is good to see that the Commonwealth Seniors Health Card holders appear to be included in many of the health offerings. And the limits for that card were reviewed last year to allow people of pension age earning up to $144,000 in deemed income for couples or $90,000 for singles to get it (that is, a good portion of retirees).

🎖️ $500 energy relief packages ($350 in WA, NT and ACT)

Eligible Aussies can receive a $500 subsidy on their electricity bill, depending on where they live. Pensioners, Veterans, Commonwealth Senior Health Card and other concession card holders, as well as recipients of the Carer Allowance, Family Tax Benefit, and anyone eligible for existing state and territory electricity concession schemes will be eligible for a $500 energy rebate which will be automatically applied to eligible households power bills from 1 July 2023.

🎖️ An increase to Jobseeker for over 55s

Older Australians on Jobseeker will receive an increase in their fortnightly payments. Those who are 55 or over will be moved up to the base rate for people who are over 60, giving them an increase of $92.10 per fortnight. Chalmers says this reflects the difficulty older Australians face finding jobs.

It’s interesting to note that our Federal Treasurer openly acknowledged that ageism and age related unemployment begins earlier.

“Until now, people aged 60 and over and on payments for a long time have received a higher rate, in recognition of the additional barriers they face finding work. But the truth is, it gets more difficult earlier than that,” he said.“The majority of people aged 55 and over on JobSeeker are women, many with little to no savings or superannuation, and who are at risk of homelessness. So tonight, we’re extending the extra support for those aged 60 and over to include Australians aged 55 and over – more help for some of the most vulnerable in our community.”

Continued below…

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🎖️ A tripling of bulk billing incentives

GPs received a sweetener which will undoubtedly flow through to the cost of healthcare for older Australians in the Federal Budget. The Federal Budget triples the fee they receive for bulk billing which is to be offered to children, pensioners and other commonwealth concession card holders. The line item will cost the budget an enormous $3.5BN over five years.

This undoubtedly will flow through to older consumers, giving those under financial pressures a better ability to access affordable primary healthcare through local GPS rather than presenting at local hospitals and putting hospitals under more pressure.

🎖️ A 15% increase to rent assistance

More than one million people receiving Commonwealth rent assistance will enjoy a 15 percent increase in their fortnightly payments which amounts to about $31 per week. Will it be enough to attract more housing to the rental market - that’s anyone’s guess. But this subsidy will help people battling rising rents. The 15 per cent increase will increase the maximum payment for a single person to $180 per fortnight from $157.20 on September 20 if the legislation is passed.

🙅‍♀️ Tax concessions cut for people over with super balances over $3M

The budget confirmed their announcement first made in February that tax concessions available to individuals with a total superannuation balance of $3 million or over will be reduced from 1 July 2025. It’s called the ‘Better Targeted Superannuation Concessions’ measure and it will bring the top tax rate for those affected to 30%, up from 15%, for earnings corresponding to the proportion of an individual’s total super balance that is greater than $3 million. The budget papers expect the changes to affect about 80,000 people. But the material benefits to the budget are expected to be about $2BN if the legislation is ever enacted which many economists are sceptical of.

🤷‍♀️ End of reduced minimum pension drawdown rate

It was always expected, and now it’s reality. The government is allowing the halving of the minimum account-based pension drawdown rates to lapse on 30 June, reverting to pre-COVID levels from 1 July 2023. Minimum drawdown percentages were reduced by 50% during Covid-19 to allow retirees to mitigate the effects of drawing out funds in irrational financial markets. But with the stabilisation of the markets this has come back to norms.

🎖️ Preventive health screening budget increase

Cancer prevention really does affect our quality of life as we age, as it is the one of the leading causes of death that cuts longevity. The Federal Government has allocated $502.2m for the delivery of improvements to preventive health, including a new national lung cancer screening program that targets those most at risk. It is predicted to prevent more than 4,000 deaths in Australia.

🎖️ A 15% payrise to aged care workers

This 15% payrise was previously announced by the Fair Work Commission, in recognition of just how undervalued and underpaid our country’s aged care workers have been.

🎖️ 9500 new home care packages

Home care packages have long waitlists for consumers, and can be frustrating to apply for so these 9500 new packages will be welcomed and soaked up quickly.

🎖️ Foundations in place for a new in home care program

The implementation of a new aged care taskforce and the review of the whole sector will continue, with the ultimate result to be a new in home care program which is to begin in July 2025. We are all watching this space with interest.

🎖️ Change to 60 day dosing in pharmacies

The Australian Government has announced a new 60-day dispensing policy, allowing the purchase of two months’ worth of medicine for the price of a single prescription. The new 60-day dispensing policy will commence from 1 September will result in a cost saving of up to $180 annually per medicine for general patients – concession card holders will be able to save up to $43.80 a year per medicine. It gives doctors the option to prescribe a two-month supply of more than 320 medicines on the PBS, including medicines for conditions such as heart disease, cholesterol, Chron’s disease and hypertension.

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🙅‍♀️ Cut to residential aged care provisions

On the downside in this budget is a decrease to residential aged care funding, on the assumption that less people will seek out residential aged care beds. They’ve actually cut the number of placements provisioned from 78.0 places per 1000 people to 60.1 places per 1000 people aged over 70 years. Whether the Aged care enquiry or the media caused people to seek out care in the home more, the result is a significant change to consumer preference - so the Government is grasping firmly onto those savings.

And there you have it folks. Did I miss anything? If I did - let me know on bec@epically.com.au.

I’ve done this as a special release. Please pass it on to someone who might benefit if you can.

Until next time, make it epic!

Bec Wilson Xx

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