Change to Age Pension rates
The rate of a full Age Pension, including Pension and Energy Supplements, increased on 20 March 2022. It is now $987.60 per fortnight for singles and $744.40 per fortnight for each eligible member of a couple.
Do not assume that you don’t qualify for the Age Pension if you are of Age Pension age and/or working. Check the new eligibility rules here.
Super work test requirement
From 1 July 2022, superannuation rules will no longer require people aged 67 to 74 to meet a work test to be able to contribute to super. However, updated tax laws mean meeting the work test is a continued condition for eligibility to make a personal deductible contribution. Under the work test, individuals must work 40 hours in 30 consecutive days in the financial year in which the contribution is made.
Super Guarantee threshold removed
From 1 July, the $450 income threshold at which point employers must make super contributions for employees will be removed. Employers will be required to pay contributions for all employees regardless of income.
Reduced age for downsizer contributions
From 1 July, the minimum age at which an individual can make a downsizer contribution will be reduced from 65 to 60 and both major political parties have vowed to further reduce eligibility to 55 from 1 July 2023.
The parties also pledged to double the amount of time older Australians have to structure their assets after the sale of their home from one year to two.
All the other downsizer eligibility criteria remain unchanged, including the requirement for the contribution to be made within 90 days of receipt of the sale proceeds. You can find an expert guide to downsizing here.
Home Equity Access Scheme
This scheme, called the Pension Loans Scheme until 31 December 2021, now has a lower interest rate (3.95 per cent) and from 1 July, homeowners aged 66 and over can receive two lump-sum payments a year, capped at 50 per cent of the annual Age Pension rate. Also from 1 July, a No Negative Equity Guarantee will be introduced to ensure that no participant will need to repay more than the equity he or she holds in the property used to secure the loan.
Minimum drawdown requirement
The government has extended the temporary reduced minimum drawdown rates to 30 June 2023 for the financial year 2022/23.
The measure started in March 2020 in response to the impact of COVID-19 on investment markets. Reduced minimum rates give you the option to manage your income payments differently during difficult times.
From 1 July 2023, this temporary reduction ends, and the government minimum drawdown rates for the 2023/24 financial year onwards will revert to the default rate.
Health card eligibility extended
Changes to your income and assets may mean you now qualify for a Commonwealth Seniors Health Card (CSHC), which entitles you to much more than assistance with medical and pharmacy expenses. Even some self-funded retirees may be eligible. Also, the Coalition has promised to give an extra 50,000 older Australians access to the CSHC if it wins the election – a move supported by Labor.
Deeming rates
The Coalition says that if re-elected it will freeze deeming rates for two years in order to combat rising living costs – a measure Labor says it will support. Deeming rates are charged on an assumed level of income based on a person’s financial assets, including their investments, when determining pension payments.
The deeming rate for financial investments up to $53,600 for single pensioners, and $89,000 for pensioner couples, will be kept at 0.25 per cent. The upper rate, which applies to singles and couples over those income thresholds, will stay at 2.25 per cent.
Rapid antigen tests
Age pensioners and anyone with a Commonwealth Seniors Health Card(CSHC) or a Department of Veterans Affairs (DVA) card can receive 10 free rapid antigen tests.
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