Tax cuts, cheaper medicines and extra money for aged care places are just some of the highlights of the 2023-24 Federal Budget for older Australians. What’s in it for you?
Treasurer Jim Chalmers has announced a second consecutive surplus in just his third year in charge of the nation’s finances, and easing cost-of-living pressures was the priority.
All Aussies will receive at least some cost-of-living relief in the form of tax cuts, direct energy bill relief or reduced healthcare costs but the Treasurer was keen to point out the economic measures have been carefully calibrated to ensure that inflation isn’t made worse.
The nation’s coffers are in surplus to the tune of $9.3 billion, the second year in a row it’s been in the black, after high commodity prices drove a $21.9 billion surplus last year.
But he was clear in his speech to parliament that these surpluses were unlikely to continue, at least in the short-term, with deficits predicted for the next four years, due to what he calls “unavoidable spending” on items such as defence and the National Disability Insurance Scheme.
This year’s budget is heavy on items that will benefit older Australians in particular, beginning with the rejigged tax cuts inherited from the previous government.
Tax cuts for every taxpayer
The centrepiece of this year’s budget are undoubtedly the changes to individual income tax rates and thresholds. Originally designed to only deliver tax cuts to middle- and high-income Australians, the redesigned changes will now deliver a cut to all 13.6 million taxpayers.
From 1 July, the lowest 19 per cent tax rate will be reduced to 16 per cent, and the 32.5 per cent rate reduced to 30 per cent.
On top of that, the threshold for the 37 per cent rate will rise from $120,000 to $135,000, while the threshold for the top 45 per cent rate rises from $180,000 to $190,000.
So, if you earn between $45,000 and $135,000 per year (about 8.2 million people), you’ll pay between $804 and $3729 less tax annually after June.
For the 8.2 million taxpayers who earn between $45,000 and $135,000 a year, this means tax relief of between $804 and $3,729 come July. These changes will not impact your 2023-24 tax return.
Energy bill relief for everyone
All Australians will get relief from their energy bills in the form of a $300 rebate. Rising energy bills have been one of the largest cost-of-living pressures faced by Aussies this year and are a key driver of inflation.
The $300 will be delivered via a $75 reduction on your quarterly electricity bills for the next financial year. The government says this measure will cost the budget $3.5 billion.
While the relief is welcome, it is less than the $500 rebate eligible families got last year – but this year’s relief is extended to everyone where last year was only open to concession card holders, pensioners and veterans.
PBS medicine freeze
The price of medicines listed on the Pharmaceutical Benefits Scheme (PBS) will be frozen for everyone for at least two years – and longer for older Australians.
The maximum price for any PBS-listed drug will be $31.60, or just $7.70 per for pensioners and concession card holders.
The price will be frozen for everyone for two years, and pensioners and concession card holders for five years. The government estimates the price reduction will cost $310m cost over the next five years.
Increased funding for aged care packages
The government will spend almost $500 million this financial year on supporting another 24,100 home care packages.
State governments will also be given $610 million to assist long-stay older residential patients in leaving hospital and returning to the community.
On top of that, another $190 million will be spent on extending and redesigning the Transition Care Programme, which provides short-term care for up to 12 weeks for older people after a hospital stay.
Rent Assistance increase
Renters will also receive some help, with the Treasurer announcing the maximum rate of Commonwealth Rent Assistance will increase by 10 per cent from September.
This will lift the maximum rate for a single person living alone from $188.20 per fortnight to around $200 per fortnight, and for a single person in a share house from $125.47 to around $138 per fortnight.
Deeming rate freeze extension
Deeming rates for those on government support payment such as the Age Pension have been frozen at their current rates for a further 12 months until the end of June 2025.
Deeming rates are used by the government to calculate an estimated annual return on a person’s assets for the purposes of means testing – whether the asset made that return or not.
The lower deeming rate will remain at 0.25 per cent and the upper rate will remain at 2.25 per cent until 30 June 2025.
Medicare boost
Older Australians will benefit from more than $8.5 billion in extra funding going to Medicare services.
In particular, the government will fund an additional 29 Medicare Urgent Care Clinics (MUCCs), which provide free walk-in medical care to all Australians. The new clinics will be in addition to the 58 clinics already in operation across the country.
MUCCs are designed to provide care for urgent, but not life-threatening, medical episodes that would normally require them to go to a hospital emergency department.
The facilities are designed to help people receive aid for simple ailments, including many that would otherwise have required them to go to an emergency department.
The government has also increased the Medicare levy low-income thresholds for seniors and pensioners to account for inflation and will now be $41,089 for single seniors and $57,198 for couples.
Are you satisfied with what’s in the budget? Is there anything else you would have liked to see covered? Let us know in the comments section below.
Also read: Don’t expect the budget to tackle record fuel prices, economist warns