Nothing stays the same for retirees – especially during a pandemic –and cards such as the Pensioner Concession Card and the Commonwealth Seniors Health Card (CSHC) are once again being used to target government support. This is what you need to be aware of in 2022.
It’s a long list – and not everything will apply to you and your situation, but hopefully, it will give you a few ideas of what to look for, and remind you of something you may miss.
Can you be found?
Confusion around how to apply for the CSHC means many eligible self-funded retirees give up. In addition to the confusion around eligibility, there is confusion around what card-holders actually get. In recent years, it has become clear that the government uses the CSHC to identify self-funded retirees. The income support during the pandemic and, more recently, access to rapid antigen tests shows that having the card can mean more than just help for medical and pharmacy costs.
Rapid antigen tests
As highlighted above, the first thing on retiree checklists in 2022 will be to claim up to 10 rapid antigen tests. This offer will be for holders of a Pension Concession Card (i.e., recipients of the Age Pension), Commonwealth Seniors Health Card, as well as DVA cards.
Budget changes that will affect retirees
While the May 2021 Budget may seem like history, the key changes only come into effect on 1 July 2022. While they have not passed yet, you should take a closer look if you are:
- between 66 and 74, not working, and want to put more money into super
- looking at downsizing and you are 60 or over
- want to draw down a lump sum using the Government Home Equity Access Scheme (formerly Pension Loans Scheme).
Considering a move?
Rocketing property markets and government incentives may mean a move is on your radar. If this is the case, beware of all the moving parts, read more about the Downsizer’s Dilemma.
How ethical are your investments?
Environment, social, ethical, responsible are all words we’re seeing a lot. Aligning your investments with your beliefs is now easier and cheaper than ever before. 2022 could be a good year to take a closer look.
Read: Government says Age Pension is ‘here to stay’
Managing your risk
The scams keep on coming, and there is no reason to be less vigilant in reviewing those that manage your money.
If you deal with a financial adviser, check their credentials using the ASIC Financial Adviser Register.
If you manage your own superannuation, it may be a good time to review other ways of managing your savings, understand the difference, and familiarise yourself with the responsibilities of managing your own superannuation. There is a massive amount of responsibility and administration here that may be better organised by a large company that is probably offering better and cheaper service than was available when you first decided to manage your super.
Will you turn 66 in 2022?
You are eligible for the Age Pension at 66.5 – which is a little confusing if this is the year you turn 66. If you, or someone you know is reaching that milestone this year, make a note to look closely at the Age Pension application 13 weeks before the actual birthday. Then you can address any hiccups well in advance of your first payment would be due.
Read: Podcast: Pension mistakes that will hurt your retirement
As soon as you get your Pensioner Concession Card, start applying for your entitlements.
If you are turning 66.5 this year and are not eligible for the Age Pension, apply for the Commonwealth Seniors Health Card. The card is income tested and could save you more than $2500 on healthcare costs.
If you were previously not eligible for the CSHC, check again as low income returns on investments and changes in deeming rates may mean your eligibility has changed.
Update Centrelink
If you are already receiving a part Age Pension, make sure Centrelink is up to date with the right data. For part pensioners, a change in assets of $10,000 could mean an extra $780 per year in pension payments. Check that the right value for the car or caravan is in the system, and household contents are realistically valued. Those assets are means tested so it’s worth it. Your savings may have changed due to a holiday, renovation or medical emergency. Make contact, increase your pension.
Get MyGov organised
While on the topic of updating Centrelink, the government is working at a rapid pace to get you to access departments online. If you’re not yet set up online, do it now. Here are some of the things you can do via MyGov:
- easily update income and assets by accessing Centrelink
- check your Medicare claims and track your safety net threshold by accessing Medicare
- complete your tax at the press of a button (or two) using MyTax
- start collecting your health data for easier use via My Health Record.
Check what you are entitled to
If you receive an Age Pension, make sure you are receiving these five entitlements:
- gas rebate
- electricity rebate
- water rebate
- council rate discount
- drivers’ licence and registration concession.
If you are in NSW, hold a CSHC card and haven’t applied for the Seniors Energy Rebate, you should do so. You need to reapply for this each financial year. (This is not for age pensioners.)
If you are in NSW, hold a CSHC card or get an Age Pension and live in a regional area, apply for this year’s $250 Regional Seniors Travel Card.
Read: Inheritance rules and the pension
Travelling by public transport in NSW? If you want to make the most of government transport help, take a look at the following: pensioner OPAL card, pensioner travel vouchers, country pensioner excursion tickets and regional excursion daily (RED) tickets.
Medicare safety net
If you are part of a couple, make sure you are registered for the Medicare safety net as a family or couple. This is something most people set up when they first get married, but things can change and this is definitely worth having. With access to Concessional Medicare Safety Net thresholds as a holder of a Pensioner Concession Card or the CSHC card, this one is a no-brainer.
Making and adjusting your plans
If you are trying to work out whether your savings will last, try the ASIC Moneysmart Retirement Planner. It’s much better than some services provided by for-profit companies as it includes Age Pension eligibility and works this out over time.
Working and the Age Pension
If you are turning 66.5 or over and you’re still working, take a close look at your situation. Do not assume that just because you are working, the Age Pension is unavailable. For someone with a small amount of savings, and a low-income job, there is scope to benefit.
Fine tuning your investing
If your investments are hard to track, hard to organise or you cannot link your investment strategy to your retirement plans, it might be time to consolidate and simplify. There is a link between asset allocation strategies and expected returns. ASIC explains it here.
For Australians in later life more likely to invest at the conservative end of the spectrum, the reliability of returns in a diversified portfolio improves. Use these expectations, an understanding of spending and expectations of government support as the basis for long-term retirement spending plans.
Home Equity Access Scheme (formerly the Pension Loan Scheme)
This scheme now has a lower rate and more flexibility.
If you own property and need a top-up for your day-to-day living expenses, the Home Equity Access Scheme may be right for you. The interest rate has been reduced to 3.95 per cent.
You can apply for a loan even if you are a self-funded retiree and as announced in the May 2021 Budget, the scheme also now allows recipients to draw down a year’s worth of payments as a lump sum.
Aged care planning
If this is on your radar, get started. Home Care Packages have waiting times, and unique means testing outcomes that should be understood when looking at the wait.
Aged Care planning also requires thought and, potentially, the mobilisation of assets.
What else?
A look back on what has happened in 2020/21 lays out the themes for 2022, such as:
- The government wants you to go digital. As hard as this may seem to get set up, once you’re there, you won’t want to go back – no queues, call waiting and uncertainty, All your information available, easily updated, and peace of mind.
- Low interest rates, unpredictable markets, long lives, uncertain future expenses – this story is the same balancing act, yet different in this age of low interest rates. Putting all the elements together takes work, but is worth it for the peace of mind.
Brendan Ryan is a certified financial planner and director of Later Life Advice. This article first appeared on Later Life Advice and is reprinted with permission.
Do you have any other tips on benefits or concessions that are available to older Australians? Why not share your knowledge in the comments section below?
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