Age Pension
On 1 July, the Age Pension eligibility age increased from 66 years and six months to 67. Perhaps not such good news, but on that date the income and assets test thresholds also changed. And that is, potentially, good news.
It means that more people may now qualify for the Age Pension – and its associated concessions – or receive a higher payment. The adjustments occur only once a year.
The asset-free area for a full Age Pension for single homeowners jumped to $301,750 and for couple combined homeowners it went to $451,500.
The asset-free area for a full pension for non-homeowning singles went to $543,750 and for couples to $693,500.
The upper limits for a part pension are: $656,500 for single homeowners and $986,500 for homeowner couples. For non-homeowners, the limits are $898,500 for singles and $1,228,500 for couples.
Check here for changes to the income test, which vary depending on whether you are single or a couple, whether you receive Rent Assistance or the Work Bonus and whether you live in Australia or overseas.
Revalue your assets
Given the increases to the Age Pension assets test, it may be timely to revalue your assets. Unless your furniture and vehicles are of exceptional quality, they will almost certainly have decreased in value over the past year.
The next Consumer Price Index adjustments to the Age Pension will be announced on 20 September.
Your earning power
On 1 December 2022, the Work Bonus was increased by an additional $4000 to $11,800. But time is running out to take advantage of that measure as it will end on 31 December 2023.
If you’re still working, the super guarantee increased by 0.5 per cent on 1 July to 11 per cent. Also, employees’ superannuation contributions must now be paid at the same time as salary and wages — instead of quarterly.
If you’re looking to supplement your retirement income – and you own your home – you may be able to take out a loan under the Home Equity Access Scheme.
To be eligible, you must have reached Age Pension age and are receiving – or be eligible to receive – the Age Pension, Carer Payment or Disability Support Pension. You must own real estate in Australia that can be used as security, have adequate insurance on that real estate and you must not be subject to any insolvency or bankruptcy agreement.
You could also consider a reverse mortgage.
Downsizing incentive
For downsizers aged 55 or older, the government extended the assets test exemption period on the sale proceeds when income-support recipients sell their principal residence, from 12 months to two years.
It also changed the income test so only the lower deeming rate of 0.25 per cent is applied to the sale proceeds of the principal home when calculating ‘deemed income’ for those two years.
Save on healthcare costs
The income test threshold for the Commonwealth Seniors Health Card has been increased to $90,000 for singles (up from $57,761) and $144,000 for couples (up from $92,416). There is no assets test applied.
The card gives older Australians of pension age, but who are not receiving a pension, access to government concessions on medical and pharmaceutical costs. They may also be eligible for state, territory and local government savings such as discounted rates, electricity and gas bills, ambulance, dental, eye care, recreation and public transport.
Also be sure to take advantage of the following:
Medicare Safety Net – reduces your out-of-pocket expenses for seeing doctors after you’ve spent a certain amount.
PBS Safety Net – helps you pay less for medicines after you’ve reached a certain amount.
Free vaccinations – free vaccinations for flu and pneumococcal disease.
Cancer screening – free early detection screenings for breast cancer and bowel cancer.
Free annual health assessment – if you’re 75 or over. You may have to pay the gap if your doctor doesn’t bulk bill.
Free home medication review – help with using medicines at home if you use more than five medications per day. Ask your GP or pharmacist.
Energy bill relief
The federal government is partnering with state and territory governments to provide up to $3 billion in electricity bill relief for eligible households from 1 July 2023 through the Energy Bill Relief Fund. The states and territories will administer the rebates. Review your eligibility and check to ensure you’re receiving these savings.
Also, Victorians can get a $250 rebate by comparing energy plans. The current round closes on 31 August.
Do you have other suggestions on how to save money or use government assistance to ease financial pressures? Why not share them in the comments section below?
Also read: Pros and cons of granny flat living
