When there was no indexed increase to the Age Pension last month, the first time indexation had not been applied in 25 years, the government promised there would be some support in the Budget. The promise was kept with two $250 economic support payments announced on Tuesday night.
The first of the two $250 economic support payments will be made in December and the second in March 2021.
The payments will be made to all Age Pension recipients as well as those who receive the Disability Support Pension, Carer Payment and Carer Allowance (if they are not in receipt of a primary income support payment).
The economic support payments are also available to pensioner concession card holders who are not in receipt of a primary income support payment, Commonwealth Seniors Health Card holders and eligible Veterans Affairs payment recipients and concession card holders.
The payments are exempt from taxation and will not count as income support for the purpose of any income support payment.
The government provided two previous economic support payments of $750 earlier this year and these new measures are well short of that rate, despite little change in the economic situation from earlier in the year.
The Council on the Ageing (COTA) had called on the government to provide one additional $750 stimulus payment before the next indexation announcement in March, but these two payments still fall $250 short of that mark.
Despite this, COTA chief Ian Yates said the payments would be welcome but criticised the lack of action on rent assistance.
“Pensioners will be very pleased about additional pension supplements of $250 in December and $250 in March, a positive response by government to our strong lobbying for additional help to pensioners at a time that the indexation formula did not deliver an increase in the pension rate,” Mr Yates said.
“However, we are disappointed that there is no increase in the inadequate Commonwealth Rent Assistance maximum rate, and that older unemployed people will still have their savings plundered by the Liquid Assets Test at the very time they should have retirement savings protected.”
For older Australians still in the workforce, the biggest boost from the Federal Budget will come in the form of tax cuts.
The government plans to bring forward stage two of its personal income tax plan and backdate it to 1 July this year.
If the legislation is passed, it will mean the low income tax offset will increase from $445 to $700, the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000 and the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.
The government also announced that low and middle-income earners will receive a one-off additional benefit of up to $1080 from the low and middle income tax offset (LMITO), which was scheduled to be removed as part of the stage two tax relief package.
“Bringing forward stage two and providing the additional LMITO means more than 11 million Australian taxpayers will get a tax cut, with effect from 1 July this year, providing them with more money to spend on what matters to them,” Treasurer Josh Frydenberg said.
“More than seven million individuals are expected to receive tax relief of $2000 or more for the 2020-21 income year compared with 2017-18 tax settings.”
What do you think of the economic support payments? Are they enough? Were you expecting more?
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